Improvement of methods for determining the efficiency of advertising

Abstract

Theoretical background: The paper shows that increase in sales and profit margins is only partially dependent on the implementation of advertising activities. Methodical approaches for estimation of an exhibition and advertising activity and promotion of its employees are specified.

Purpose of the article: It is the purpose of this article to analyze and further develop the methodological principles for assessing the efficiency of advertising and exhibition activities.

Main findings: The results of the work involve evaluation of the effect of advertising and the share of the impact of advertising in increased revenue from the sale of products. A corresponding proportion of this impact was determined based on consumer inquiries. We propose an index of exhibition and trade fair performance, calculated based on two components: how many times a specific company participated in such events, and how the company was presented at relevant exhibition and fairs. Indices of the cost of advertising and promotion of certain products were provided as well. The present research is a novel approach that consists first in proving that the sales increase effect should not be assigned to advertising only, and second, determining the factors that influence consumer preferences and their share in the total value effect. Moreover, the proposed index of influence of exhibition and trade fair performance results depending on the selected factors is innovative as well. The practical importance of the research results involves a more accurate calculation of the effect caused by activities performed and, consequently, an increase in the efficiency of the business entities.