The great promise of online advertising has always been that advertisers
will now be able to effectively track the successes and failures of
their online advertising efforts. This promise has been met.
Yet, for those of us who still employ offline promotions and advertising
methods, we must consider the various ways in which we can effectively
track our results in the old-world media.
TRACKING RESULTS BEFORE THE INTERNET AGE
How long has it been? Ten Years? Believe it or not, it has been less
than ten years since the Internet went mainstream.
Companies still utilize the same methods to track results as they did
before we laid our hopes on the Digital Superhighway.
TV advertisers ask you to call extension X. Radio advertisers offer you
additional savings if you tell them you heard it on XYZ radio station.
In newspapers and magazines, advertisers suggest you clip the attached
coupons.
Why do you think advertisers employ these tactics?
Simple. They need to know what advertising is bringing customers in the
front door and to their cash register.
By understanding what advertisers are bringing them customers and
dollars, they have a better understanding of where to spend their next
wave of advertising dollars. Additionally, they can do a side-by-side
comparison of their Advertising Return on Investment (ROI) to determine
which method brings them the most percentage of return per dollar spent.
UNDERSTANDING HOW WE SHOULD MEASURE
The truth is that we really do need to know how people are deciding to
visit and buy from our business establishment.
Some consider this idea silly or even a waste of their valuable time.
Far too many people, who think of tracking in this fashion, end up
searching for a job at some point in their future. Unless pure dumb luck
is on the side of the business owner, a business simply cannot survive
if it does not track the effectiveness of its advertising.
Somehow, some way, a business owner or his marketing staff must look at
their advertising and promotion budgets, and look at their advertising
mediums and find a way to know which is doing the job for them and which
is not.
DISCOVERING WHAT MOTIVATES OUR CUSTOMERS
Somehow, we must get our customers to tell us how they found us and what
ad motivated them to come in and purchase our product or service.
Everyday, businesses motivate their customers to tell them how they
learned of them by having the customer call a certain extension, offer
them an additional discount to tell them which advertisement they had
heard, or to offer them a coupon to use.
Others motivate their customers to tell them how they had learned of
their business by offering a very specific product in their advertising.
They know that if someone shows up at their business to buy a certain
product, then they will know how the person had heard of their business.
This is why you should make your radio advertising focus on a different
promotion than your newspaper advertising. Different mediums should
focus on different leader pieces so that you can see which medium
provides the best results.
UNDERSTANDING WHY WE SHOULD MEASURE RESULTS
We measure advertising results so that we can learn how to not waste our
money and to learn how to get the most bang for our advertising dollar.
Return On Investment or ROI is the key measurement utilized to determine
the value of our advertising.
It is best to show in an example how ROI is measured.
Cost of Newspaper Advertising: $150 Number of Items Sold As a Result: 60
Retail Price of Individual Item: $ 10 Profit on Individual Item: $ 3
Gross Income on Items Sold: $600 Gross Profit on Items Sold: $180
In this example, you have spent $150 to make $180. Your ROI is 120%.
Cost of Radio Advertising: $ 300
Number of Items Sold As a Result: 50
Retail Price of Individual Item: $ 20
Profit on Individual Item: $ 6
Gross Income on Items Sold: $1000 Gross Profit on Items Sold: $ 300
In this example, you have spent $300 to make $300. Your ROI is 100%.
Utilizing these two examples, you can quickly discern why and how we are
calculating ROI.
Now, some people would consider both to be good investments of their
advertising dollars. In fact, many believe that so long as their
advertising generates enough sales to break even as the radio example
did, then they consider the investment to have been in their future
rather than their present. So long as you do not lose money on the
transaction, then you should at least be willing to continue with the
advertising medium that was used.
However, over time, you might find that the newspaper advertising will
continue to provide the 120% ROI. If that is the case, then your
newspaper advertising should take more of a center stage in your
advertising efforts so that you can develop more profits which can be
used to increase your dollar investment into your advertising.
WELCOME TO THE WORLD OF TRACKING YOUR OFFLINE PROMOTIONS
With this introduction, you should now have available to you the
knowledge necessary to introduce tracking into your marketing efforts.
Those who take the time and effort to advertise and track their results
will benefit more than you can imagine.
Truth be known, a single person with a dream today started every big
corporation in the world many years ago. Each of these corporations grew
from a fledgling operation to a economic powerhouse by tracking and
tweaking their Advertising ROI.
Every corporation and small business who will remain in business through
the long term will be tracking their advertising and promotional efforts
today. It is an investment into their future success. If you make the
same kind of investment of time and cash resources, you too will be
making an investment in your future success.
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