Advertising effectiveness can pertain to the number of people ads reach.
Advertising effectiveness pertains to how well a company's advertising accomplishes the intended. Small companies use many different statistics or metrics to measure their advertising effectiveness. These measurements can be used for all types of advertising, including television, radio, direct mail, Internet and even billboard advertising. A company's advertising effectiveness usually increases over time with many messages or exposures. But certain advertising objectives can be realized almost immediately.
One metric for advertising effectiveness is reach. This measurement pertains to the number of people who actually saw a company's advertising. Small business owners usually know how many people can potentially see their ads. Local television stations report the number of viewers for certain shows. Similarly, magazines report circulation figures. But not all of these viewers or readers notice the ads. That is why small business owners often use market research surveys to measure reach. For example, 10 percent of a local restaurant's viewing audience may recall seeing their latest television ad. Advertising should be designed to attract attention, build interest and prompt action, according to the experts at "Mind Tools" online.
Sales and Profits
One of the most important objectives of advertising is to increase sales and profits. A profitable ad is an effective one. The best way to build sales and profits is by reaching the right target audience. In other words, small business owners must make sure their advertising reaches the people who are most likely to purchase their products. Companies often develop customer profiles from warranty cards or marketing research to gather this information. Target audience variables or demographics can include age, gender, income and education. For example, a high-end women's clothing retailer may effectively drive sales and profits by targeting women with higher incomes.
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Brand awareness is another metric of advertising effectiveness. Brand awareness is the percentage of people who recognize a company's brand of products. It usually takes many years and lots of ad exposures to build high brand awareness. Television and radio are two of the best mediums for building brand awareness. Small companies can also build their brand awareness on the Internet by advertising in online Yellow Pages, or promoting their wares through major search engines like Google and Yahoo.
Testing Advertising Effectiveness
Small companies can test their advertising effectiveness in several different ways. One way is to insert certain "word flags" into the advertising messages, according to "Entrepreneur." This may be a simple phrase or word that customers recognize and can, therefore, mention when inquiring from an advertisement. The word flag can also be in the form of a question. For example, a small restaurant company may prompt customers to ask, "What's the super special of the day?" The restaurant owner can then track the number of people who ask about the super special throughout the day. Those who use direct mail can insert codes on order forms. For example, a mail order operator would know that order forms with the "215" code came from a mailing on February 15.