Most companies have only indirect measures of how well their campaigns are converting or worse yet, they have no idea what proportion of their ad-spend is wasted.

Measuring your ROI (Return on Investment) on advertising has many challenges.

You can measure your ROI (Return on Investment) by using the following simple yet effective methods:

1. Carefully design your advertising with measurable objectives in mind. If you can collect some data you can use a number of techniques to correlate the results to success or failure. Some analytical examples include statistical analysis, split-cell testing (experimental design) or direct response.

2. Track your investments. Make sure you can accurately determine how much you are investing in advertising whether it's for production, insertion or internal support.

3. Create reporting systems that can measure the right things not just the easy things. If you can't get data on actual consumer purchases, determine what can be used as a reasonable proxy for success based on the objectives you have set.

4. Continually look for ways to improve your measurements, realizing that successfully measuring your response, can lead to larger budgets, greater revenues and profits and of course larger bonuses.

Measuring your advertising ROI (Return on Investment) can be challenging, but if you are successful it can mean the difference between success or failure of the business.