Measuring online impact on offline conversations Strategies to bridge the online-to-offline data gap Accurately evaluating marketing performance in multi-channel organizations requires the ability to link online marketing efforts to offline sales. Online-to-offline (O2O) measurement models are able to attribute specific online interactions to offline results, presenting a clearer picture of marketing effectiveness across channels. While retailers with brick & mortar presences have been early adopters of O2O measurement, it can also be useful for lead generation in many industries including financial services, health care, and higher education. Navigating the changing measurement landscape Today s marketers are in a remarkable era in which online sales and digital marketing can be tracked with unprecedented speed and precision, yet for many organizations the majority of sales still occur offline. Rapid innovation continues to make customer behavior more trackable, addressable, and measurable, but despite the proliferation of tools and technology, there is still widespread uncertainty about the accuracy of the data produced by these tools. One study reported that 70% of marketing executives would increase their spending on mobile, digital and social platforms if there were better ways to measure return on investment. 1 Reconciling the results of a company s digital marketing effort with its offline marketing and sales can appear to present an insurmountable barrier: each channel produces different data points that are measured by different tools. But consumers increasingly move from online to offline seamlessly as they move from awareness to research to conversion, and 87% of shoppers now gather information before entering a store. And they don t rely on a single source, but rather many different resources to conduct their research. 2 Navigating the changing measurement landscape Reframing from a customer point of view Enterprise measurement and the role of O2O Case study: Retail Using partners to expand reach What s next 1 According to a study by WPP agency Millward Brown Digital, more than, July 6, 2015 2 Digital Impact on In-Store Shopping: Research Debunks Common Myths. Think With Google, Oct. 2014. Web. 3 Jan. 2016.
CONSUMERS USE THE FOLLOWING ONLINE SOURCES FOR INFORMATION ON PRODUCTS + SERVICES: Search Engine 75% Online-Only Retailer Sites/Apps Website/Apps for Retailers with Physical Stores Social Networking Website/Apps Online Video Websites/Apps Coupon or Daily Deal 35% Websites/Apps 39% 36% 35% 71% 70% How customers find products online Online-to-Offline measurement has the daunting task of reconciling these two different channels into a coherent picture of an organization s total enterprise marketing effort. Despite the challenges, CMOs increasingly recognize the untapped incremental value that can be unlocked with a better understanding of cross-channel behavior rather than focusing exclusively on more accessible ecommerce data. Online channel data can be impressive in its immediacy and detail, but can also result in misleading conclusions about the actual value of specific customer interactions if the entirety of the custom journey is not taken into account. Online-to-offline measurement can help correct for these attribution errors and generate more accurate data that accounts for the true complexity of the path to purchase. Reframing from a customer point of view Online marketing lives in its own silo within many organizations, yet customers expect one seamless experience whether they re on a company s site or in their store. With an understanding of the relationship of online and offline elements of the customer journey companies can simplify the customer experience and remove barriers to purchase in either channel. 2
How the customer sees it Seamless experience through a world of Omni-channel touch points 6 AM 10 PM Phone Tablet Desktop Retail / POS TV Radio Print HOME PRINT commute RADIO BRAND IMAGE work commute retail home BED DESKTOPT POS V TABLET KEY LIGHT usage MODERATE usage Heavy usage How your business operates A divided view of the customer where decisions are made in silos The customer journey vs. the marketing view From the customer s point of view, online and offline presences blur together along the path to purchase. For example, a customer could see a company s broadcast campaign raising awareness of a new product, then see an online display ad promoting a sale event, leading to a paid search interaction (product research) followed by a visit to the physical store to make the purchase. A holistic view of marketing interactions from a customer point of view can attribute more precise value to each of these interactions, enabling more effective coordination of online and offline marketing efforts. Enterprise measurement and the role of O2O Establishing enterprise metrics can help determine priorities to make it easier to allocate and set goals for offline and online channels. With a more complete and nuanced view of advertising impact, companies can answer questions such as: What is the impact of an online visit on offline sales? Does this impact vary by category or product type? What marketing channels influence offline most? Can online channels drive offline acquisition? How can I plan my media purchases based on enterprise sales? O2O depends on existing data and measurement platforms, so adapting it to an organization s system varies depending on which tech stacks and data feeds are already in place. While the exact composition varies by organization, Enterprise Measurement is typically built on a combination of measurement types: 3
Components of enterprise measurement REAL-TIME METRICS O2O insight: syndicate media using TESTING O2O insights: A/B test to confirm or disprove hypotheses for cross-channel consumer behavior MEDIA MIX ATTRIBUTION conversions and segment by audience Real-time metrics help allocate and optimize budgets based on interactions across multiple marketing channels. Media mix applies both customer-level and regression-based statistics to measure media investment across digital and traditional channels. Testing can validate or disprove assumptions made about the effectiveness of strategies, channels and executions, enabling continual refinement of models. Attribution modeling assigns value to touchpoints both on and offline O2O insights can layer over each measurement tool, connecting customer behavior across online and offline touchpoints to inform marketing decisions and inform omnichannel messaging. Moving to an O2O model does not require wholesale replacement of measurement systems already in place. It begins with a prototype capable of more nimble analytics that identifies the richest areas of O2O opportunity, which helps prioritize steps towards implementing an enterprise-wide O2O measurement model. Case study: Retail A major national retailer had a robust ecommerce business, and was spending more than $100 million in digital marketing each year. Company leaders were confident that this investment had a significant impact on in-store sales, and focused their media spend on driving online traffic as a proxy for influencing customers to shop online and in-store. Despite their certainty that online marketing was effective at driving in-store sales, they needed to quantify how effective online spending was at generating store lift when compared to channels like TV or direct mail. 4
Ovative/group helped the company build a system that incorporated a disciplined test-and-learn approach. The project began by looking at the available data and identifying the ways in which online activity could be correlated with store sales. Ovative/group identified specific online interactions email opens, organic and paid search, and display impressions that could be associated with specific customers in the retailer s CRM system. Timestamps for the online activity and store purchases could then be compared to correlate the online behavior with in-store purchases. Tying online activity with in-store sales email open store purchase email opens email system email address customer@aol.com CRM email address customer@aol.com revenue $5500 display impression paid search w/ sign-in store purchase display impression + account sing-in ad server ad server ID 459001 ad server ID 459001 email addressc ustomer@aol channel paid search CRM email address customer@aol.com revenue $5500 As a precondition for making these O2O connections, it helps if the organization houses its own customer data, anonymizes it, and uses unique digital IDs for each transaction (such as email or purcase IDs). Maintaining the infrastructure to process and store millions of transactions and hundreds of millions of digital visitors requires a deep resource pool (solution architects, data engineers, IT), automation, and a focus on data quality. In some instances, these processes must be established or refined before O2O measurement is possible. Once the measurement framework is in place, it s possible to evaluate digital media tactics and site category interactions to optimize their influence on offline behavior. In the example below, SEM keywords were evaluated according to their effectiveness at driving in-store sales. 5
SEM keyword performance with and without O2O In this case, we re looking at an SEM keyword comparison of cost per acquisition for online only versus when store is also considered. Campaign Spend online s tore + online Keyword 1 Keyword 2 Keyword 3 $2300 $1750 $2100 $80 $45 $30 $5 $45 $30-94% -11% -7% Despite its simplicity, this analysis illustrates how an O2O approach can transform an organization s perception of the effectiveness of specific spending all the way down to the tactical level. Once in-store results were factored in, keywords 1 and 2 were shown to be far more effective at driving in-store sales, with keyword 1 nearly twice as effective as online-only results would indicate. Another analysis for the same retailer revealed which product categories were most likely to convert in store after online research. 22x 24x IN-STORE CONVERSIONS FROM ONLINE SHOPPERS BY PRODUCT CATEGORY 2500% 2000% 1500% 1000% 500% Furniture Toaster Ovens Small Appliances Bed + Bath Home Décor Shoes Kids 1.5x Dresses For hard goods like furniture and toaster ovens, online searches led to in-store conversions far more often than searches in clothing categories. The company could now combine these O2O category effectiveness insights with product sales volume to calculate which categories would provide the most profitable boost from O2O conversions. 6
Using Partners to expand reach Data from third-party vendors can also be used to link offline data to customers online interactions. Ovative/group can match online and offline customer interactions using an omnichannel pixel and first-party CRM data. Supplementing internal data with external resources can help broaden reach and improve match rates for prospects or existing customers who might not otherwise be identifiable online. These partners can unlock data from over 500 media platforms and more than 170 million unique authentication events per month. Access to this data can also help mitigate sample size issues that could otherwise make some insights harder to attain, and make it possible to build look-a-like models and target customers for customer activation strategies. What s next? Online-to-offline measurement is an essential tool for multi-channel retailers, but is also useful for identifying untapped markets in health care, financial services, and other industries where online-only lead generation may bypass potential audiences, and where media effectiveness is largely determined by what happens after the lead is acquired. Currently, the sophisticated matching strategies used by Ovative/group can achieve up to 95% online and 80% O2O matching accuracy when combined with partner data from 170 million online U.S. consumers. For clients, this provides a significant advantage in reaching audiences competitors are unable to identify or message appropriately. Perhaps most importantly, O2O measurement capability enables the more effective allocation of marketing dollars across the enterprise. About Ovative/group When it s critical for marketing and data to work together, Ovative/group offers a unique team of specialists and experts who help clients wrangle the octopus of data. We help companies activate their enterprise value through marketing, measurement and a proprietary technology solution. Ovative/group provides digital marketing services that drive traffic, acquire customers and increase visibility. Ovative/group s omnichannel measurement solutions that provide more holistic insights across all marketing channels and devices, and are powered by Ovative/group s marketing analytics platform. Ovative/group s clients come from a wide range of industries, including retail, healthcare, education, CPG and hospitality. Clients rely on Ovative/group to fill a variety of needs, including neutral measurement partner, end-to-end measurement solution provider, marketing optimizer, or experienced advisor. 2017 Ovative/group Want to learn more? Drop us a note to info@ovative.com 7