Need and importance of Measuring advertising Effectiveness

Advertisement is a costly affair, but very seldom serious attempts are made to judge how far it is effective, how many benefits the costs of advertisement yield, how the benefits, if any, are related to advertisement and so as. Till recently, the effectiveness of advertisement has been measured in relation to sales. This is what is known as quantitative way of measurement.

This measurement emphasises whether an advertisement was acceptable to consumers and whether they digested it and remembered it. This is known as “stimulus response function”. There is no dispute about the fact that the most objective way of measuring an advertisement is through sales. Sales in turn are influenced by complex­ity of forces which fall into qualitative type of advertisements.

Therefore, the measurement of quality is an indicator of the index of the quantitative type of measurements. The advertisement should first appeal, that is, it should stimulate the demand for a particular type of the product. Only then can some results be expected from it. The success of an advertisement can be analysed only with the help of some survey data relating to consumer response and sales.


Increasing Sales as an Objective

The next objective is to increase sales. As a bottom line, marketing campaigns are meant to increase sales to increase the company’s profits. Any advertisement made needs to keep this in mind. Its effectiveness should be measured by the profits it brings in.

That said, it can be hard to explicitly measure what portion of sales is due to a specific market campaign rather than to an offer currently on the table, a change a competitor made, or changes in the market environment. Sometimes this can be estimated using customer information, customer service calls or warranty cards; however, the information isn’t always directly applicable to the effectiveness of the advertising.

Increasing Brand Awareness

Like reach, increasing brand awareness has to do with the number of people who are aware of the company and the company’s brand. A brand embodies a set of values and expertise that the company sets forward as its own, along with its complete portfolio of products. Where reach looks at the number of people who see an advertisement, brand awareness looks at the number of people who know of the business itself.

Advertising to increase brand awareness typically focuses on the company’s objectives and goals and on boosting sales. Most measures of brand awareness come from customer surveys or market surveys done by external companies.

Customer Retention as a Goal

It’s important for a business to bring in new customers, but it’s nearly as important for them to hang on to customers they already have. Marketing can be keyed to retention, focusing on benefits the company continues to give over time or emphasizing new sales or pricing that an existing customer might find advantageous.

Customer retention is another metric that can be difficult to directly correlate with a marketing budget because customer retention is due to a number of things, not just the advertisements a customer sees.

Measuring Advertising Effectiveness

With these objectives in mind, companies need to measure their marketing effectiveness. Several sources provide information companies can used to calculate metrics for such an evaluation, explains AdStage. This kind of data can be retrieved using a variety of methods.

Brand awareness measurements ask particular market segments what they know about the company, the company’s portfolio of products, and the company’s reputation. These assessments can be done by the company itself or by an external company that specializes in this kind of research. Often, companies purchase market studies from businesses that have their own ways of collecting information.

Companies can conduct customer surveys while making actual sales or during customer service calls. Online interactions have the advantage of being easy to add on to; many customers may not want to take a cold call but are willing to click through a few questions after a purchase. This information can help a company understand what directly brought the customer to make a purchase, where they heard of the company, and why they chose this company over others.


Provides feedback for remedial measures: Measuring advertising effectiveness provides useful information to the advertisers to take remedial steps against ineffective advertisements.

It acts as a Safety measure: Measuring advertising effectiveness helps in finding out ineffective advertisement and advertising campaigns. It facilitates timely adjustments in advertising to make advertising consumer oriented and result oriented. Thus waste of money in faulty advertising can be avoided.

Avoids possible failure: Advertisers are not sure of results of advertising from a particular advertising campaign. Evaluating advertising effectiveness helps in estimating the results in order to avoid complete loss.

To justify the Investment in Advertising: The expenditure on advertisement is considered to be an investment. The investment in advertising is a marketing investment and its objectives should be spelt out clearly indicating the results expected from the campaign. The rate and size of return should be determined in advance. If the expected rate of return is achieved in terms of additional profits, the advertisement can be considered as effective one.

To know the communication Effect: The effectiveness of the advertisement can be measured in terms of their communication effects on the target consumers or audience. The main purpose of advertising is communicated the general public, and existing and prospective consumers, various information about the product and the company. It is therefore desirable to seek post measurements of advertising in order to determine whether advertisement have been seen or heard or in other words whether they have communicated the theme, message or appeal of the advertising.

Compare two markets: Under this procedure, advertising is published in test markets and results are contrasted with other. Markets so called control markets which have had the regular advertising program. The measurements made to determine results may be measurements of change in sales, change in consumer attitudes, changes in dealer display and so on depending upon the objectives sought by the advertiser.

Online Tools:

Integrated direct marketing: This is an internet based tool where they have a response corner designed on the websites. Whenever the customers visit the sites, they fill up their contact details and give feedbacks. Thus the company supplies more information and sends newsletters and also gets the idea for further action. But then it’s not that only online advertiser have this facility but then advertisers who don’t work online can use coupons, discount vouchers, etc. to do this.

Analysis tool: there is an analysis tool available on internet by using which the advertiser will know how many customers are visiting the site, who are shopping online, how many pages are viewed, etc. which in turn will help advertiser to measure the effectiveness.

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