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Posted: 2005-01-16 / Author: Stone Evans

Tracking Offline Advertising Success By Measuring Roi

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.


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.

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.

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.

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.

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.

Stone Evans

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