What Are The Various Ways To Measure The Effectiveness Of An Advertising Campaign?

Digital Marketing
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The main purpose in measuring the effectiveness of any advertising campaigns is to evaluate its effect on the sales and also brand recall factor. The mathematical equation for measuring the effectiveness of an advertising campaign is:
Advertising campaign effectiveness = Revenue + Return on investment (ROI)
There are various ways to measure the effectiveness of advertising campaigns:

  • Conducting a survey after the campaign ends
  • Proportionate increase in the sales of that particular product/service
  • More customers calling to a toll-free and prescribed lines
  • Redemption of coupons and vouchers
  • Increased footfalls in the store to purchase product/service
  • Increased click on the company’s website.

Impressions (ad views) - the number of times your ad is shown to the viewer. Click-through-rate (CTR) - the percentage of times your ad gets clicked, when on display. Cost per click (CPC) - a dollar value you are paying for each click or another type of action (conversion, sale, etc).

Techniques to Measure Advertising Effectiveness

There are different tests and several techniques in each of the test to evaluate advertising effectiveness. Test depends on the aspects to be evaluated. Based on Philip Kotler’s views, let us first discuss classification of tests (various ways or approaches) to evaluate advertising effectiveness.

1. Pre-test and Post Test:

Pre-test implies testing advertising message before it is sent to specific media. Post test implies testing impact of advertising message after it is published in any of the media.

2. Communication and Sales Effect Test:

Communication test measures communicability (ability to communicate) of the message. Whereas sales-effect test measures advertising impact on sales volume.

3. Laboratory and Field Test:

Clearly, a laboratory test is conducted in a controlled environment in a limited scale. Respondents are invited in a laboratory to state their response. Quite opposite, a field test is conducted in original setting, artificial climate is not created. It is similar as conducting survey to measure what customers think about company’s advertisement

4. Experimental and Survey Test:

Experimental test involves testing advertising effect by conducting test by manipulating independent variable (i.e., advertising efforts) and measuring the effect of the manipulation on other dependent variables like sales, profits, consumer satisfaction, etc. Experimental test may be laboratory or field test. Survey test involved knowing consumers’ view’s through a survey method.

5. Message and Media Effect Test:

While message test involves measuring clarity, contents, believability, action ability, etc., of the message, the media test measures effectiveness/ suitability of one or more media.

Mostly, a company is interested to measure advertisement’s communication effect and sales effect. Therefore, it is worthwhile to discuss communication and sales effect test.

Communication and Sales Effect Test :

Among several tests, the communication test and the sales effect test are more relevant because success of advertising campaign depends on how far advertising has influenced knowledge, attitudes and preference of the target customers. In the same way, a sales volume is the ultimate aim of all marketing efforts (including advertising). Advertising must increase sales. Therefore, evaluation of advertising effectiveness, in most cases, consists of evaluating communication test and sales effect test.

Methods for Communication Effect Test :

Communication effect test seeks to determine whether advertisement is capable to communicate effectively.

Following methods are used:

1. Direct Rating Test:

In this method, consumers are asked to rate/rank alternative advertisements. They are exposed to different ads and are requested to rate them. Consumers can consider various criteria to rate the advertisement, like message contents, message clarity, coordination, and overall impression.

2. Recall Test:

It measures the retention value of ad message. The consumers are asked to listen and/or view the particular advertisement. They are then asked to recall the same. The amount of contents and message they recall determines effectiveness of advertisement.

3. Portfolio Test:

Here, the consumers are asked to view and/or listen to a portfolio of advertisements. They are given as much time as they need. They are then asked to recall all the ads and their contents. Their recall level indicates an advertisement’s ability to affect consumers’ knowledge and arouse interest.

4. Laboratory Test:

The test is conducted in laboratory. Necessary equipment’s are used to measure consumers’ physical reactions in terms of heartbeat, blood pressure, perspiration, etc., to an ad.
While the communication effect test measures communicating ability of the ad, the sales affect test measures ad’s ability to influence sales. Ad must affect sales positively. In fact, advertising’s sales effect is difficult to test because sales are influenced by many factors besides advertising, including product’s features, price, availability, and competition.

Following two methods are used:

1. Historical Test:

The test involves correlating the past sales to the past advertising expenditures using advance statistical techniques. The results can reveal how far advertisement was effective in generating or increasing sales. The test can be used for different products, territories and ad media, or in general.

2. Experimental Test:

Experiment is conducted to assess impact of advertisement on sales. Instead of spending the same per cent of sales for advertisement in all territories or products, a company spends different percentage of sales for advertisement. Company can easily judge whether high-spending territories have resulted in increasing sales and vice-versa.