In a tough economy, advertising dollars are typically the first to go. On the flip side, in a flourishing economy, advertising dollars seem to be readily available without needing much justification or proof that the advertising will pay off. Why is this?

Many advertisers have no methodology for measuring the effectiveness of their ad campaigns. In a flourishing economy, taking risks with a low probability for success is often encouraged in hopes of the big pay-off. In a tough economy, investing in anything (advertising, R&D, etc.) will require a great deal of scrutiny.

At SES NY in ‘06 I attended an invite-only dinner with WebTrends with a group of about a dozen online marketers — some existing clients of WebTrends and some were potential clients they were wining and dining. One of the dinner guests I sat next to was Rex Briggs, co-author of What Sticks.

For anyone who thinks “advertising cannot be measured,” I would recommend reading this book. It covers concepts that online marketers should hold close to their hearts: Test, Learn, Deploy, Repeat. Many traditional marketers are used to deploying large budgets on print and TV advertising with no plan or budget to measure the effectiveness of the ad spend. They excel at developing the creative, but fail miserably when it comes to answering the simple question of “Did it work?” 

In the online world, measuring ad spend becomes somewhat easier with the various tracking technologies (particularly if you sell online). If you can definitively prove how advertising positively impacts sales (directly or indirectly), then you’ll most likely see your ad budgets remain flat in a tough economy, but not entirely eliminated like some marketers are experiencing this year.