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Offline Conversions: How To Measure The Real ROI Of Paid Search In A Multi-Channel World
Search engine marketing no longer exists in an online vacuum. In today’s multi-channel world, people search online, visit stores to test out products, return to the internet to compare prices and then complete purchases in-store, online or via a call center.
Over $155 billion worth of consumer goods was purchased online in the U.S. in 2009, yet a far larger portion of offline sales were influenced by online research, according to a March report from Forrester Research. Forrester estimates that $917 billion worth of retail sales last year were “web-influenced,” with online and web-influenced offline sales combined accounting for 42% of total retail sales. That percentage will grow to 53% by 2014, when the web will influence $1.4 billion worth of in-store sales.
The above findings—as well as general observation—prove that consumers today are constantly shifting between shopping channels, and often using search as the starting point in their purchase process. Multi-channel marketers looking for an edge in the paid search game should look to measure the impact their programs, not only on online conversion, but on offline conversion as well.
When search marketers simply measure online clicks and conversion, they aren’t getting an accurate picture of the value of their keywords or campaigns. A keyword may seem to have a low conversion rate, but what if a large number of people who click on that keyword end up purchasing in store or over the phone? Or what if a campaign has a high click-through rate and a very low conversion rate; does that mean it’s a dud, or does that mean most of those clicks later converted offline?
The truth is, if you’re not attempting to measure the influence of search on offline sales, you are probably underestimating the value of your paid search marketing efforts. To fully understand the ROI of search programs, marketers need to leverage clever ways to integrate offline data into their measurements. By analyzing the impact that online searches have on offline sales, search marketers can dramatically improve bidding, decision making and analysis across their entire SEM program.
Make no mistake, measuring offline conversion is not easy, and it’s rarely an exact science. But there are several concrete ways to measure the impact of paid search marketing on offline conversion. Here are a few strategies to get you started:
Use unique landing pages
One of the easiest ways to begin assessing the impact of paid search on offline conversions is to measure and assign value to key landing pages on your site. For example, for an online retailer, when a site visitor lands on a store locator page, that’s a good hint you are dealing with an offline purchaser. Contact us pages, completion of a contact form, or even views of products that can only be bought in a store also provide good signals that visitors are interested in making an offline purchase.
The key is attempting to quantify this value. With a store locator page view, for example, you need to understand how many offline sales you are driving which are enabled through these types of visits. To get to a number here you might consider providing visitors to your store locator page with a coupon or offer which could only be redeemed in the store. This would allow you to calculate an “offline conversion rate” from your website and then apply that estimated value back to store locator page views.
Because you are dealing with an online event, using this approach, you can easily measure the estimated conversion value down to the keyword level, and use this measurement to make better bidding decisions. Since this calculation is dynamic, consider using a bidding technology that will allow you to overwrite conversion values as the offline sales rates change.
Use dynamic toll-free numbers
For many companies, the ability to accept inbound calls to a contact center is a critical enabler of sales. However, when website visitors interact with salespeople over the phone, marketers typically lose visibility into which online initiative drove the contact. Increasingly, sophisticated search marketers are looking to remedy this gap through use of dynamic toll-free phone numbers. By assigning a toll-free phone number to a web page based on the search marketing channel (Google, Yahoo!, Bing)—or even the campaign that an individual clicked on to reach the page—marketers can tie call-center sales back to the appropriate acquisition channel.
While this may be difficult to do at a keyword level, just measuring the overall impact that paid search programs have on call-center sales can have a dramatic impact on search budgeting. Identifying, for example, that call-center sales from paid search are 2-3x the size of online sales, can quickly change how you view the importance of search on your overall marketing success. You can also use the data to get actionable insights into how to allocate your marketing spend. For example, you may find that the ad groups that drive offline sales are different from the ones that drive online sales. This could necessitate a shift in budget allocations within search, and even inform how you write copy and market your product in the paid search channel.
Use in-store or phone surveys
If all else fails, surveys can be an effective mechanism for estimating the value of online marketing. Check with your customers when they buy—whether in the store or over the phone—and ask “How did you hear about us?” While surveys can suffer from sample bias as well as data errors, they can provide valuable insight into online marketing effectiveness when used correctly. One way to avoid over-complicating surveys is to simply focus on finding out which online channels drove a sale. This information alone is extremely valuable for search budgeting and prioritization. It’s important however, to remember that just because a customer says they “found you on Google” doesn’t mean they did so via paid search. Organic traffic still accounts for the largest percentage of online referrals from search. Check to see what the breakdown of paid and organic referrals is for your site, and use this information to infer how many of your survey respondents are likely to have interacted with your keyword advertisements.
Measuring offline conversions driven by clicks on paid search ads is hardly an exact science. But given the seismic shift taking place in the way people shop today—jumping between online and offline channels many times during a single purchase process—multi-channel marketers need to begin taking steps to integrate online and offline data. Knowing whether your paid search campaigns are working to drive sales—no matter where those sales take place—can be the difference between a good paid search program and an exceptional one.
Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.