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.

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.