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Measuring Advertising Effectiveness

Are your ads getting results? Here's how to find out.

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Just as important as creating a strong marketing plan is following through on the results. How will you know which ads are working if you don't analyze the results? Check the effectiveness of your advertising programs regularly by using one or more of the following tests:

1. Run the same ad in two different publications with a different identifying mark on each. Ask customers to clip the ad and bring it in for a discount or free sample. Or, if you're running an ad that asks customers to order by mail, put a code in your company address such as "Dept. SI." By looking at the marks on the clipped ads or the addresses on the mail-in orders, you'll be able to tell which ad pulled better.

2. Offer a product at slightly different prices in different magazines. This has the added benefit of showing whether consumers will buy your product at a higher price.

3. Advertise an item in one ad only. Don't have any signs or otherwise promote the item in your store or business. Then count the calls, sales or special requests for that item. If you get calls, you'll know the ad is working.

4. Stop running an ad that you regularly run. See if dropping the ad affects sales.

5. Check sales results whenever you place an ad for the first time.

Checks like these will give you some idea how your advertising and marketing program is working. Be aware, however, that you can't expect immediate results from an ad. Especially with small ads-the type most entrepreneurs are likely to be running-you need to give the reader a "getting to know you" period during which he gets to feel comfortable with your business.

One study showed that an ad from a new company has to be noticed by a prospect a total of nine times before that prospect becomes a customer. The bad news: Two out of every three times you expose a prospect to your marketing message, it's ignored. That means you have to expose a customer to your message an average of 27 times before he or she will buy.

Evaluate an ad's cost-effectiveness, too. Consider the CPM. A cheaper ad is no bargain if it doesn't reach many of your prospects.

Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need, by Rieva Lesonsky and the Staff of Entrepreneur Magazine, © 1998 Entrepreneur Press