Every business wants to be sure it is getting its money's worth, especially when it comes to running an online ad campaign. As with any investment, you want to make sure it produces a favorable return on investment. Calculating ROI for any online advertising campaign requires knowing how many prospects it generates and how much new customers are worth to your business.
There are plenty of ways you can find out if you're getting your money's worth out of online advertising. Before starting any campaign, you must define what success looks like from your perspective. It could be more clicks to your website, more store traffic or more phone inquiries. Set a base level for comparison and then create a timetable for gathering the results.
Small businesses aren't able to utilize the same resources that national brands have at their disposal, but there are ways you can find out if your ads are driving new customers to your doorstep. One simple way of doing just that involves finding out how many customers have seen your ad. One business has its receptionist trained to ask callers how they heard about their business. This way, the company can gather data on how many of their prospects come in from their website or through referrals.
ROI, or return on investment, is the key indicator of whether an advertising campaign was worth the cost of running it. The calculation itself is simple: take the value created by running the ads and divide by the cost of the campaign. What’s hard is determining that value created in numerical terms, but it can be done. For instance, a clothing store owner that relied on Vantage Local for its online advertising campaign determined his online display ads were creating a positive ROI when he experienced his first $10,000 day in sales approximately two months into the ad campaign and a second $10,000 day during the same week. When looking at average revenues versus the new amount experienced, it's safe to say that the online advertising campaign had a positive impact on his bottom line.