Measuring the Value of Advertising

Question

I have a six person service company and would like to know your estimation of the value of advertising, especially yellow page and radio.

Answer

It is difficult to measure the value of advertising your business or services without doing a detailed analysis.

Here are a few questions to get you started on analyzing the effectiveness and value of your current marketing efforts:

  • What is your annual revenue run-rate?
  • What is your annual marketing budget?
  • How much did you spend last year in acquisition marketing costs?
  • How much did you spend last year in cross-sell marketing costs?
  • How much did you spend last year in retention marketing costs?
  • How much did you spend last year in loyalty programs?
  • How many customers did you have at the beginning of the year?
  • How many customers did you lose during the year?
  • How many customers did you gain during the year?
  • What is the total customer life in years?
  • What is the total value of a customer?
  • How do you target prospects?
  • How do you segment customers?
  • How many products do you offer?
  • What are your annual expenditures on advertising and marketing by type of advertising (TV, Radio, Newspaper, Billboard, Search engine, web banner, magazine, newspaper, Yellow Pages, tradeshows, reunions, events, direct mail, e-mail, telesales, and promotions)?
  • How many campaigns by type do you run annually?
  • What are your annual expenditures by type?

If you would like additional assistance with an analysis, please contact us about our VentureConsulting services.


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