How to Track Ad Results 3 strategies for determining if you're spending your advertising dollars wisely

By Roy Williams

Opinions expressed by Entrepreneur contributors are their own.

You can't always track the effectiveness of your advertising dollars. No matter how powerful and persuasive your ad, most of the people you're paying to reach won't currently need what you're selling. But if your ad makes a deep enough impression on them, they'll remember you when they need you later.

With that said, keep in mind that I didn't say ad results can never be tracked. When you want to hold your ad dollars accountable, there are basically three ad-tracking strategies to choose from:

Strategy #1: Under-price a well-known product
This is the classic "loss leader" strategy. The general idea is that enough customers will buy additional items to offset the losses created by the under-pricing of the lead item. Would you make a trip to the grocery store if they were advertising milk at 75 cents a gallon and eggs at 25 cents a dozen? You can easily track the effectiveness of the advertising through the number of units sold, or by the increase in customers. The losses created through the under-pricing of the item will be relative to the amount of traffic generated. Think of it as pro-rated advertising: The better it works, the more it costs. The downside to this strategy is that customers who switch to you for reasons of price alone will switch from you just as quickly, and for the same reason.

Don't confuse the loss-leader strategy with couponing. Generally, coupons appeal only to the lowest quality of customer. If you're going to offer a bargain, do it openly. Your best customers--the relational ones--will be offended by the idea that some customers pay a higher price than others.

Strategy #2: Feature an item with a powerful story
The quantity of customers generated through this strategy will be less than when using the loss-leader strategy, but they'll be a better quality of customer. The keys to this strategy are:

  • You must find an item with a powerful story, then
  • You must find a writer capable of telling that story well.

Again, the effectiveness of the ad can easily be tracked through sales of the item and/or a general increase in customer count.

Both strategies 1 and 2 must be limited-time offers--"While supplies last" is always a bad idea. You must name a specific calendar date when the offer will expire and then be sure you have enough of the promotional item in stock to satisfy every inquiry. "Limit 1 per customer" is usually okay as long as it's plainly disclosed in the ad.

Strategy #3: Plant a word-flag in the ad
A word-flag is an unexpected, memorable name, word or phrase that customers will voluntarily mention in their efforts to be friendly or to "connect" with you. For example: I once ended a radio ad by having an unintelligent-sounding caller call the store and ask, "How much should a hamster weigh?" The flustered clerk responded by saying he wasn't sure. To which the caller replied, "I got one that's up to 72 pounds! You think maybe it's a wolverine?" Customers were smiling and asking, "Where do you keep those 72-pound hamsters?" for several months after that radio schedule had expired.

Another ad campaign explained the unusual childhood of "Little Freddie," the owner-operator of an obscure Mexican restaurant. Fred had never actually been called "Little Freddie" in his life, but a few hours after the ad campaign was launched, new customers were asking, "Are you Little Freddie?"

"Fat-bottom diamonds" was the word-flag planted for a jewelry store. Within a few weeks, dozens of customers were asking every jeweler in town, "This isn't one of those fat-bottom diamonds is it? I wouldn't want one of those." The downside of the word-flag strategy is that is produces less immediate traffic than strategies 1 or 2, but usually of a higher quality. The customers responding to word-flag ads will be coming to you because they've decided they like you. Note: It's not a word-flag to say, "Mention this ad and receive a 20-percent discount." Those ads will only make you seem unfocused and desperate.

Is it possible to combine one, two, or even all three strategies in a single ad? Yes. But you've got to have a brilliant ad writer.

Do you?

Wavy Line

Roy William's is the founder and president of international ad agency Wizard of Ads. Roy is also the author of numerous books on improving your advertising efforts, including The Wizard of Ads and Secret Formulas of the Wizard of Ads.

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