How do I know if my marketing is actually working?

Work out your break-even: one divided by your margin. At a 40% margin that's 2.5 - every $1 of ad spend has to return $2.50 in revenue just to break even. Anything above that is profit, anything below is a loss.

With performance advertising you see it within weeks, measured as return on ad spend or cost per acquired customer. Brand doesn't work like that: there you watch whether more people search for you by name, whether direct visits grow, and whether your cost per customer in performance slowly falls. If you measure none of these, your marketing may be working or failing and you'll never know which.