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Problem

Outline how you would evaluate the effectiveness and efficiency of a business firm’s advertising function. Focus on budgeting practices and performance results.

Step-by-step solution

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Step 1/3

Evaluation of advertising is important function of marketing team. Company has spend so much fund on the advertising expense so after certain period of time company should evaluate the performance of advertising to find the benefit of advertising versus advertising costs.

First of all company should analyze all segments, products wise and get information about those products and what company actually produces like product and services.

Step 2/3

Based on the information gathered about the products and services of the company advertisement performance can be measured by using following technique.

• The impact of advertisement cannot be measured at short instance. Advertisement is generally used to make the consumers about a product. Thus, the impact of advertisement can be analyzed by measuring the sales figures at the beginning and end of each year.

• The effectiveness of advertisement can also be analyzed by measuring the amount of dollars spent for creating awareness.

Step 3/3

• The response from the sales people can also be used to measure the effectiveness of advertisement. It generally happens that people show interest in getting information about a product just after being exposed to an advertisement. Thus, in case an advertisement does not raises interest in public, then that advertisement can be considered as ineffective.

Thus, above are given some of the ways in which the effectiveness of advertisement can be measured.