The impact of digital advertising on in-store sales
The path to purchase is often a long, messy journey. Not all journeys are the same. It’s hard enough to track and attribute a sale fairly in an omnichannel world. But when the journey begins online and ends offline (in-store) – that’s an entirely different ballgame.
In September 2019, we took it upon ourselves to rise to this challenge with a retail business, whose main goal was to find a way to measure the impact of their digital paid media activity on their in-store sales. Until recently, they had yet to find a way of measuring this – 90% of their sales happen in-store so this was key in planning and optimising online paid media activity. Search has the lion share of their investment and thanks to Google’s investment in new ‘O2O’ (online to offline) measurements over the past couple of years, we’ve managed to introduce store visits data into the strategy.
When visits to your physical locations are important to your business, you can use conversion tracking to help you see how your ad clicks and viewable impressions influence footfall. Shop visit data is based on anonymous, aggregated statistics. Google Ads creates modelled numbers by using current and past data on the number of people who click or view your ads and later visit your shop. Shop visit conversions are available to a limited number of Google advertisers. To be able to measure shop visit conversions, you’ll need to meet the following requirements:
- Have multiple physical shop locations in eligible countries. Please reach out to your account representative if shop visit conversions are available
- Receive thousands of ad clicks and viewable impressions
- Have a Google My Business account linked to your Google Ads account
- Create each of your shop locations in your Google My Business account
- Have at least 90% of your linked locations verified in Google My Business
- Ensure that location extensions are active in your account
- Have enough shop visit data on the backend to attribute to ad click or viewable impressions traffic and pass our user privacy thresholds
We now rely on adding new metrics such as ‘store visits rate’ or ‘cost per store visit’ to give ourselves more data points to understand if we are having an impact. We’ve monitored the fluctuation of our investment day by day against store visits intake and have found a clear correlation on PPC and shopping. We can track store visits down to the keyword level.
The general trend is that low average order value (AOV) products tend to do well online whereas high AOV products see fewer online sales but strong store visit performance. This new data has enabled us to restructure our campaigns to accommodate this type of behaviour. As a result, we can allocate our budget more efficiently and grow offline revenue via online activity. In September 2019, the client was down 7.5% in offline sales year-on-year (YoY). In 3 months, we’ve managed to reduce this to 4.5%. Thanks to smart re-allocation of spend we have also secured a 7% increase in online sales.
Google is not the only one working on an O2O project, Facebook is following the trend but has fewer restrictions than Google. In September 2019, the client had very low investment on social media and we were not seeing a strong impact on online conversions. However, we knew that Facebook DOES have an impact, and took the initiative to prove this. We began plugging the offline sales into the platform and the match back rate has given us strong ammunition to support this channel. We now have a full picture of the O2O journey for this channel and have managed to raise return on ad spend (ROAS) from 19 to 40.3 YoY, a 103% increase.
Both media suppliers are launching campaign formats with store visits and store sales features, as well as new bidding strategies that can optimise towards store visits. Google’s latest local campaigns for local actions and local campaigns for store visits are on our client’s radar, but the minimum spends per day are quite high and therefore it is a harder sell. On Facebook, we’ve recently launched a campaign with store visits objectives and will be testing the store sales campaign objective soon.
In 2020, we are looking to grow the digital investment for the business by leveraging these new metrics and products in order to bridge the journey between online to offline further. By doing so, we are not only increasing our efficiency but are also expanding on activity that we would not previously have invested in. Looking at the full picture for our clients is vital in ensuring that we’re maximising our activity, as well as helping them achieve their overall business objectives as opposed to just digital objectives. By leveraging the new features that are becoming available, we’re adding more value to our clients than ever before. Watch this space.
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