How do you measure the effectiveness of your advertising? Do you look only at whether or not you have had an increase in sales or enquires subsequent to the publication of an advertisement, or do you include product or brand awareness in your evaluations?
The most suitable criteria for evaluating the effectiveness of advertising, depends on a number variables, such as the advertising goals, the type of media used, the cost of evaluation, the value that the business or advertising agency places on evaluation measures, the level of precision and reliability required, who the evaluation is for and the budget. It is difficult to accurately measure the effectiveness of a particular advertisement, because it is affected by such things as the amount and type of prior advertising, consumer brand awareness, the availability of cost effective evaluation measures, the placement of the advertising and a range of things about the product itself, such as price and even the ability of the target audience to remember.
There are a number of different models for measuring advertising effectiveness.
E. Pomerance suggests that advertising agencies might attempt to measure effectiveness under the five headings of Profits, Sales, Persuasion, Communication and Attention (Wheatley, 1969, p.91). He uses a cube diagram to illustrate how to evaluate advertising that recognises the effect of repeated exposures (Wheatley, 1969, p.93).
Lavidge and Steiner suggest a model for ‘predictive measurement of advertising effectiveness’ (Wheatley, 1969, p.7), which recognises various stages of purchasing behaviour, and suitable measures for each stage. Kotler and Armstrong call these stages, ‘Buyer readiness stages’ (1996, p.463-464). They may be viewed like this: Awareness, Knowledge, Liking, Preference, Conviction and Purchase (Wheatley, 1969, p.7).
Kotler and Armstrong suggest that two areas need to be evaluated in an advertising programme. They call them the ‘communication effect’ and ‘the sales effect (1996, p.507-508). To evaluate the sales effect, company information about sales and sales expenditure would be needed. To evaluate the communication effect, Kotler and Armstrong (1996, p.507-508), suggest using a number of research tests. They suggest that these evaluation measures are not perfect.
Surveys and brand/product recognition tests after an advertising campaign are sometimes used in a two pronged way to advertise and gather evaluation information.
Effectiveness of online advertising is sometimes measured in terms of the number of page views collected through various forms of counters and search engine page rankings.
One cost effective way of evaluating the effectiveness of the advertisement in terms of sales and movement towards purchasing is what Kotler and Armstrong (1996, p.480) call Integrated Direct Marketing. It is marketing that has a response section which can lead to more appropriate communication between the company and the prospect. This can also give the company the opportunity to trigger further movement towards purchasing, so it has the potential to have a greater impact on sales than a similar advertisement without the response section. It is not only online advertisers who are using this method of requiring an email contact address and giving the customer a choice of receiving more information or newsletters about their product/s. Vouchers and coupons have been used in a similar way.
All advertisements have the potential to trigger some form of purchasing behaviour.
Effectiveness may have more to do with the readiness of the viewer to consider the benefits the advertisement promotes, than the advertisement itself. It may be more cost effective to invest in finding creative ways to measure the effectiveness of an advertising campaign that is part of an advertising campaign in itself, but at the end of the day your goals are the key. It may come down to estimating how happy you are with what you are doing.
Kotler, P. & Armstrong, G. (1996). Principles of Marketing. Upper Saddle River: Prentice Hall, Inc.
Wheatley, J. (Editor). (1969). Measuring Advertising Effectiveness. Selected Readings. Ontario: AMA Reprint Series. Richard D. Irwin Inc