Q: How much revenue should your advertising generate as a reasonable ROI?
Nov 22 2007
Answered by: Jackie Jarvis Ask a question
I would say that you should get enough of the right kind of leads and enough business to make it worth spending the money on the advertising. Obviously the more you get the better.
If you don’t get any results at all then you should first analyse why and then stop it if your reasons are not things that will make a big difference. Powerful headlines and incentives to take action do influence rates of response significantly.
You should get an ROI that is ultimately profitable, otherwise it is not worth doing. You will need to find ways of measuring the responses you get so that you know exactly what kind of results each advertisement campaign generated. Perhaps you could ask each customer how they heard about you, or which campaign they found the most helpful.
Special offers, special telephone numbers, reference numbers, asking people where they heard about you are all ways of measuring the return you get. You will also need to follow though on the leads and monitor what they ultimately resulted in. If your adverts generate one lead but that lead ends up as a profitable piece of work then it was worth doing.
It is worth bearing in mind that advertising doesn’t always work immediately and may take a continued and consistent effort over time to generate the kind of results that you want. However don’t just advertise out of habit, if it does not ultimately generate you enquiries that make you a profit stop it. There may be better ways to spend your budget.
Updated Oct 2011:
You should also look at the variety of online advertising opportunities on offer. You can negotiate various advertising packages outside of traditional payment methods. You can pay for the number of clicks your campaign receives or pay based on response, sign-up or purchase. This allows you to control your marketing budget and measure your ROI.
You will find this article very useful: Pay per Click Advertising for Small Businesses in 2011
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