Running an online ad campaign is like other investments you make in your business– you want to know that it is getting a good return.  A big part of this is getting an idea of how many prospects a campaign generates, as well as how much a new customer is worth to your business.  The web analytics company Kissmetrics has a great infographic about calculating lifetime customer value (LTV).  Here are some ways that you can tell if the online advertising is having a positive impact on your results.

Before you begin the campaign there are three important things you must do to prepare:

  1. First, define what success looks like: more traffic in your store, clicks to your website, more phone inquiries.
  2. Set a base level for comparison
  3. Set a defined period for gathering results – remember that branding efforts can take months.

As a small business owner, you probably don’t have the resources to do the same level of data gathering that national brands do when measuring campaigns that touch millions of consumers.  However, there are ways that you verify whether your ads are helping to get new customers in your door.  It can be as simple as checking to see whether customers have seen your ad.  For example, I spoke with a chiropractor whose receptionist is trained to ask every caller how they heard about them so that they know what proportion of their prospects come from referrals or from seeing their website. Devra Gartenstein, at Demand Media has some additional suggestions for tracking success on her blog.

Capture results and run the numbers.  The calculation is pretty simple:

(Value Created – Amount Invested)


Amount Invested

The challenge here is putting a number on the value created.  For example, a clothing store owner that has worked with Vantage Local mentioned that he knew his online display ads were working when he had his first $10,000 day about 2 months into his ad campaign, and then had another in the same week.  The difference between the new revenue amount and average revenues would be attributed to the effects of advertising. (In retail it is typical to compare to same day the previous year to correct for seasonality). It has consistently been shown that online advertising has a positive impact on both brand perception and sales.

Another way to look at this is how many new customers would you need to get in order to justify the upfront investment in the advertising.  Olivier Blanchard, who runs the Brandbuilder Blog, discusses this in his post here.  A key thing to take away from his post is that analyzing ROI for advertising is a layered process.  You can keep the picture simple, and just focus on number of customers in the door.  Or you can go deeper into the complexities, such as what helps reach the higher-spending customers best.  Your approach may differ depending on your needs and resources.  But it is definitely important to keep an eye on the outcome.

At Vantage Local we take particular care to share the details in your campaign reporting, so that you can keep an eye on your outcome. Call us at 1-855-77-LOCAL (1-855-775-6225) to hear more about how targeted online display advertising can transform your local business marketing efforts.