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| *Ostroff, Fair and Company>>>Other - Advertising & Marketing |
Relationship between advertising spend and sales? |
Is there an empirical, rule-of-thumb relationship between how much I can sell due to advertising and how much I spend on advertising? For instance, if I have been advertising for a while and have data on spending and sales. Now if I increase the advertising by 20% or 50% or 80% or whatever, is there a way to guesstimate the increase in sales? Has anyone ever done any empirical study on this? Your advertising vendor likely has data on the market results of their service. For example if you do radio ads the the radio station should have data that shows the number of listeners, demographics etc. Putting a hard number to the results of a particular campaign may be quite hard. Maybe you can look at increased traffic following a campaign and start collecting your own data. Try google adwords or yaoo PPC.. It will bring you targeted visitors thereby you can incrase your sales http://www.freewebs.com/advertisement-gu... hi there, the best way to keep your advertising spendings under control would be to use an affiliate network. This way you will pay an amount for advertising (you chose how much to be this) only when sales have been generated. This way you will always spend the same amount of money for each sold product, but you have the warranty you get to sell it, not only get a visitor to your website that might be interested, but not sure if buying See here a list of affiliate networks that you could use http://www.webeki.com/index.php?option=c... There is a point of diminishing returns. That means that if your ad budget is $15,000 and you are doing $300,000 in gross sales, you can not expect that a $30,000 budget will generate $600,000 in sales. The question becomes if you spend that extra $15,000 will your increase in PROFIT (not sales) offset the increase in costs. Your ad reps can provide some information, but since every business and all advertising has so many variables, the only way to really know is through closely tracking what you do, what's effective and what's not for your store over time. If your ad rep says they can increase your sales, tell them to put their money where their mouth is... link the amount you spend on the ad campaign to the increase in sales. If you are doing $300,000 and the TV station says they can increase your sales to $400,000 with a $20,000/month campaign, agree to pay $10,000 if your sales stay at $300,000, and increase their payment proportionately to your increase in sales. If you hit $400,000, pay them the full $20,000. |
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