Yahoo’s ROBO Study: Search Has Big Impact On Offline Purchases

Earlier this week, Yahoo released the results of a major study of online advertising and consumer retail purchase behavior. Conducted in conjunction with comScore between April, 2006 and January, 2007, the study sought to quantify “the impact of search marketing and display advertising on consumer shopping behavior and the in-store sales of major retailers.”

It measured the influence of paid search and display advertising in isolation, as well as the impact of integrated search and display campaigns. Subsequent consumer purchase behavior was tracked at five major US retailers.

At a high level the findings affirm the value and importance of search marketing generally and of integrated search and display campaigns in particular — on in-store sales. Yahoo calls this ROBO — Research Online Buy Offline. It’s the latest in an increasing body of empirical data, much of it from Yahoo studies, that show how significant the Internet has become as a driver of local/offline consumer purchase behavior.

According to the survey findings:

Search marketing has a greater impact on in-store sales lift, three times that of display advertising. When consumers in the study were exposed to search only, on average they spent $16 in the store for every $1 they spent online. However, the number of consumers reached via search is much smaller than display, creating a relatively small pool of pre-shoppers with a relatively high propensity to purchase in-store.

Display advertising has a greater impact on total in-store sales volume, with three times the reach as search marketing. Consumers exposed to display advertising spent an average of $6 in the store for every $1 they spent online. In other words, display advertising drives three times the in-store sales volume while search drives three times the in-store sales lift.

Consumers exposed to online retail marketing campaigns were more engaged and spent more dollars in physical stores than otherwise. There was an overall revenue lift of 43 percent from these engaged consumers; 88 percent of that revenue came in local store purchases.

E-commerce hovers around 4 percent of total US retail revenue. Its growth is starting to flatten according to various sources and projections. Jupiter Research, for example, one of the most historically most bullish analyst firms regarding e-commerce growth now argues that e-commerce is “maturing” but that the Internet will influence “a trillion” dollars in in-store sales by 2010.

Indeed, the overwhelming majority of Internet-influenced sales activity is not happening online; it happens in local stores.

Given that this consumer pattern is now well documented, tracking that purchase behavior is one of the critical issues and challenges. At SMX Local-Mobile, we have a couple of sessions that will address the question of tracking local, in-store purchases back to online ad campaigns.