A study by eBridge Advertising showed that most small business owners aren't sure of their advertising's effectiveness.
The study surveyed over 13,000 small business owners, which were not clients of eBridge. The results showed that obstacles business owners face when advertising include profitability and documenting results. In fact, 63 percent of respondents claimed they don't know how many customers $100 of advertising brings in.
Sixty-four percent said that receiving customer phone calls is their most important measure of advertising effectiveness, followed by walk-in customers (20 percent) and web visitors (16 percent). And 68 percent of the business owners surveyed said they face "very" or "extremely" competitive business competition in their particular space.
One conclusion drawn from the study is that performance-based advertising, which allows business owners to pay based on the effectiveness of their ads, poses the best option for businesses watching their advertising dollars.
"Performance Advertising is advertising that is measured by dollars per response; and closing the loop by tracking how many calls, walk ins, or website visits are required to actually produce a profitable customer," says Dan Caulfield, managing partner of eBridge Advertising.
Most performance-based advertising is done online because it is easy to track results, but the Web provides many other options for affordable advertising such as link exchanges, social media and e-mail.
Link exchanges allow similar businesses to exchange text links and ads to increase traffic, while social media can allow a business to connect and build relationships with a large audience for free. Lastly, e-mailing promotions to customers can bring in sales and be easy to track.