Varos Glossary

Ad Effectiveness

It's hardly a secret that advertising is more challenging than ever. Use of ad blockers is at an all-time high, particularly as companies like Apple bake ad blocking directly into browsers. Now more than ever, it's important that you have a robust system in place for assessing the effectiveness of your ad campaigns — ad testing alone may not be enough. 

What is Advertising Effectiveness?

Advertising effectiveness is the measurement of how well an ad campaign meets an organization's marketing objectives and achieves its desired outcomes. It goes well beyond assessing the impact of individual advertisements, instead taking a high-level approach and evaluating a campaign's strengths, weaknesses, and overall returns. The major components of advertising effectiveness include:

  • Reach and exposure. 
  • Brand awareness.
  • Brand recognition.
  • How well customers comprehend and remember advertising messages.
  • How customers perceive a brand and its products before and after a campaign.
  • How effectively the campaign drives the desired consumer behavior.
  • Overall return on investment, including return on ad spend

Why Is Advertising Effectiveness Important?

Measuring advertising effectiveness achieves two things. First, it allows a brand to identify shortcomings in an existing marketing or advertising campaign, then apply those insights to improve the outcome of future campaigns. Second, and perhaps more importantly, it provides the brand with a deeper understanding of its audience — what resonates, what falls flat, and why.

How to Measure Ad Campaign Effectiveness

Return on ad spend is one of several crucial metrics to consider when assessing advertising effectiveness.

Given that there are a few different facets to advertising effectiveness, it follows that there are several steps an organization should take when measuring it.

Evaluating Advertising Effectiveness With Customer Surveys

Customer surveys are an incredibly powerful tool, providing direct insight into how and why a customer engaged with your brand. Where ad effectiveness is concerned, this primarily means assessing the reach of your advertising efforts. There are a few things you'll want to know in that regard:

  • How many of your paying customers saw your advertising? 
  • Of those customers, who remembers your advertising? 
  • What sort of experience did your customers have with your advertising? Was it positive or negative? 
  • How do they feel about your brand since viewing your advertising? Has their opinion changed?

Generally, you'll want to offer some incentive for participating in these surveys — a small discount off of a future purchase, for example. 

Metrics to Measure Advertising Effectiveness

Core metrics and KPIs for measuring advertising effectiveness include:

  • Return on Ad Spend (ROAS). How much money your brand made for each dollar it spent on ads. 
  • Click-Through Rate (CTR). What percentage of customers actually clicked on your ads after seeing them?
  • Cost Per Mille(CPM). Although technically an ad pricing method, CPM can also be used to measure the effectiveness of your efforts. It's a direct measure of how much you pay per thousand impressions, and an alternative to Cost Per Click (CPC).
  • Objective-Based KPIs. What does your brand want to achieve with this ad campaign? Are you looking to increase brand awareness? Generate sales? Improve people's opinion of your brand? Each goal will have a different set of KPIs associated with it — confer with your team to determine what you need to measure and how.

Other Best Practices for Measuring Ad Effectiveness

  • Monitor your ad traffic with UTM tags. Urchin Tracking Module tags are among the most common and most effective ways of measuring both organic and paid campaigns. If you're advertising on Google, you can use the company's URL Builder to generate UTM parameters.
  • Set realistic expectations. If you're a small startup, you aren't going to see the same traffic numbers as a titan like Amazon. Don't overshoot with your objectives. 
  • Find your sweet spot. Every advertising campaign has its own perfect ratio of ad spend to exposure. The trick is finding yours — something you can only really do through experimentation. 
  • Consider your targeting. Are you advertising to the right audience? Using the right keywords? Running them on the right channel? 
  • Patience is a virtue. Successful advertising takes time. You aren't going to meet with roaring success overnight. Wait, watch, and measure.