Trying out new advertising opportunities is always a good idea – you never know what works until you give it a shot. The question is, how long does it take to determine if advertising works or if it’s a waste of money?
To answer this question, you’ll need to do two things.
First, you need to ask yourself what you expect the ad to accomplish. Second, you need a system to measure the performance of your ad relative to your goals. With your measurements and some simple math, you can determine if your ad needs refinement, or if the medium doesn’t work.
What Do You Want Your Ads to Accomplish?
Typical goals for advertising include:
- Increased brand awareness and recall
- Increased product awareness and recall
- Website visitors
- Information requests (coupon offer requests, dealer locator requests, rebate form downloads)
- Phone calls
- Online sales
- Store visits and offline sales
Obviously, every advertisement could do all of the above. But most ads are designed to do one or two things.
For example, this ad from Apple piqued the curiosity of TV viewers and increased brand awareness and recall for a product and company that was new to many in 1997.
Generally speaking, brand type advertisements like this one require serious ad budgets.
The goal of a branding type ad like the one above is to get the consumer thinking about the brand. The effectiveness of this type of ad is typically determined by measuring recall – asking people if they can remember seeing the ad or not.
Ads that are focused on a result, on the other hand, can be evaluated by how well they accomplish the stated goal.
If your ad prominently features a special price on a popular product, and shows a phone number to call, it will be effective if the phone rings with people asking about the popular product.
Obviously, there’s a lot more to advertising than this quick explanation. But the big takeaway should be that you can’t evaluate an ad without defining goals and expectations.
Measuring Activity Associated With An Advertisement
As challenging as it can be to design and produce a great ad, it’s often more challenging to measure the ad’s results. In fact, attributing advertising with scientific certainty is very difficult.
Still, there are some things that can be done to try and approximate an ad’s effectiveness:
- Put a unique tracking phone number in the ad. CallRail offers affordable tracking numbers that can be used in advertisements.
- Use a custom web address. A custom domain like “CampaignName.com” or a custom URL like “YourSite.com/campaign” is another way to track ad response and activity.
- Add a coupon code to your ad. If the ad is focused on increasing transactions, a special discount code that’s specific to the ad is a great tracking tool.
- Put a unique offer in your ad. One of the oldest – and simplest – tricks is to put a unique offer in the ad that isn’t advertised anywhere else. The offer should be substantially different from your normal day-to-day specials…that way, you know the ad is responsible.
For more info about tracking URLs, check out this article about tracking part sales to back to online videos. There’s a section about tracking URLs that should be pretty helpful.
Measuring advertising results requires both planning and diligence, but the payoff is huge. Many of our clients have used these processes to eliminate ads that didn’t work, saving thousands of dollars in advertising costs every month.
How Long Does It Take To Test An Ad or Ad Medium?
Once you know what your ads are supposed to accomplish – and you have a system for measuring their effectiveness – you can use some relatively simple math to determine if your ads are working and/or if the ad medium is worthwhile.
1. If you’re trying out a new ad medium, start by testing an offer that you know to be effective. If you know that a “10% Off Everything!” offer always works well, that’s probably your test offer.
2. If you’re trying out a new medium, any activity at all is a good sign. Every ad medium has its’ own quirks. Ad creative that works great on Facebook can bomb in a Google display campaign, and vice versa. If you’re testing a new medium, all you’re looking for is some proof of activity (at least to start).
3.Test a few different ad ideas. A good ad test will have 2 or 3 different concepts, and 3 to 5 different layouts. It’s best to prepare all of these ads before your campaign begins, so you can test them all in succession, refining as you go.
4. Each ad needs between 10,000 and 50,000 impressions to have a chance. In a perfect world, you’d be able to give each ad 50,000 looks before you assessed it. However, that might be cost prohibitive. If so, you can trim that back to 10,000 impressions per ad.
Now, it’s time for some simple math. If you’ve followed the process outlined above, you’ll have between 30,000 and 250,000 total impressions on the ad medium. At this point, you’re ready to do simple math.
Take the total number of positive results you’ve gotten from the best performing ad, sorted by type. For example:
- 30 website visits
- 7 phone calls
- 3 sales
Assign a value to each metric, and compare that value to the cost of your advertising. Is it cost effective? If so, that’s fantastic news. It’s only going to get better.
Now, double the performance of the advertising…is that cost effective? If so, than you need to find a way to double the effectiveness of the ads to continue. While this sounds hard, it’s usually an attainable goal.
However, if you’re still not in the realm of cost effectiveness after doubling the results, it’s probably time to move on. If doubling the performance of the ads still doesn’t get you where you need to go, it’s not for you.
NOTE: Assigning value to things like calls and website visitors is complex, and even measuring sales can be complex. As a result, you’re often working on assumptions when you evaluate ads. For this reason, it’s often valuable to bring in an experienced marketer to help you decide.
What About Advertisers That Don’t Facilitate Ad Testing?
The ad testing process we’ve outlined requires quite a bit of effort, both on your part and the part of your advertiser. While most advertisers are willing to work with you on this sort of process, some will push back and say that you can’t change creative more than once a month, that you need to give your ads more time, etc.
While there is some room for argument about how long an ad should be ‘given a chance,’ there is no room for disagreement on the following statement: It’s your ad budget, and you can spend it wherever you want to. If an advertiser doesn’t want to work with you to run a test, it’s a simple matter to find another advertiser.
Ad Testing and Opportunity Cost
Another thing to keep in mind before you test any ad medium – what’s the opportunity cost of testing this advertising option versus another?
Let’s say you want to test a full page ad in a monthly magazine. Each ad will cost somewhere between $2,500 and $5,000, and the test will last 3 to 6 months. That’s a total test budget of $7,500 to $15,000. What else could you test for $7,500?
- Half a dozen online pay-per-click options could be tested for a total of $7,500 – Google Ads, Bing Ads, Pinterest Ads, Reddit, Outbrain, etc.
- A YouTube video ad campaign can be easily tested for the $15,000 budget, and that includes $5000 for ad production. If you reduce the price of production, the test could be done for $7,500.
- A cable TV ad campaign with 30 second ads running for several weeks
- A campaign on a streaming radio service like Spotify
The not so subtle point here: There are lots of ways you can spend your ad dollars, and testing one medium means you can’t test others. Choose carefully.
Testing ads is the nuts and bolts of marketing, and we wouldn’t be doing our job if we didn’t mention that ad management is one of our services. We frequently run ad tests, which includes coming up with different ad concepts and layouts, setting up tracking, and measuring.
However you test your ads, diligence is key. Good luck!