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Case study for measuring internet ROI for in-store sales

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  • 1. Carrefour Online-to-Store studyUnderstanding the complete marketing ROI on personal computer sales for Carrefour Google Confidential and Proprietary 1
  • 2. Executive Summary 25% of Carrefour in-store PC sales are driven by marketing1 - Among those, online advertising accounts for 43% Over 10% of in-store sales are driven by website traffic2 - During peak periods, website traffic drives 25% of in-store sales Each € invested in online advertising delivers €7.85 in sales3 - Online advertising is the most cost-effective advertising driver, with an ROI twice as high as the average for all marketing drivers 2
  • 3. Research Objectives & ScopeObjectives• Understand the drivers of business outcomes and analyse the impact of Carrefour’s media investment onto personal computers sales (desktops, laptops & netbooks).• Identify the optimal personal computers marketing mix allocation to generate greater sales from the same level of investmentScope• As part of this study, the personal computers category (desktops, laptops & netbooks) was analysed across both the online and in store channels at the national level.• 97,8% of the computer sales take place in-store, and 2,2% online.• This study quantified the drivers of three key business outcomes: sales units, website traffic and query volume (GQV).• The data time period of this analysis spanned from July 2008 to June 2010 (104 weeks). *GQV reflects the number of queries that have been done for a particular term, relative to the total number of queries done on Google over time. 3
  • 4. Situation Analysis – 1/2Personal Computer Sales• Carrefour’s personal computers sales units havegrown almost 16% over the period of this study(July 2008 – June 2010). Website Traffic Trends• Over the analysis period, average price trendsdeclined across all products and channels.In value, in store PC sales grew by 2% and online Website Traffic +106%sales by 10%Carrefour Query Volume & Website Traffic• Online search interest for the term ‘Carrefour’has slightly declined, however total site traffic towww.carrefour.fr has doubled over the time periodof this study. 06/07/2008 06/08/2008 06/09/2008 06/10/2008 06/11/2008 06/12/2008 06/01/2009 06/02/2009 06/03/2009 06/04/2009 06/05/2009 06/06/2009 06/07/2009 06/08/2009 06/09/2009 06/10/2009 06/11/2009 06/12/2009 06/01/2010 06/02/2010 06/03/2010 06/04/2010 06/05/2010 06/06/2010 4
  • 5. Situation Analysis – 2/2 Competitive ad spend Jan 2009 – Dec 2010 (source: TNS, gross spend, computers category)Competition / Marketing spend FNAC 41,32Carrefour is the 2nd player in terms of personalcomputers spend and catalogue circulation CARREFOUR MAGASINS 19,46relative to its competitors. CONFORAMA 13,45 E.LECLERC MAGASINS 10,5Media Investment / catalogues AUCHAN 5,87 DARTY 3,34• During the data sample period, Carrefour’s BOULANGER ELECTRODOMEST. 3,01total investment for personal computers hasremained stable.• The Personal Computer investment represents Carrefour Historical Mix2% of Carrefour’s total media investment. July 2008 – June 2010 (net spend, source: TNS, Google, FLE)• Certain channels such as digital*, TV and Catalogues Display Adsradio have seen sizeable increases. 23,4% 11,6% Paid Magazine• Overall catalogue circulation has increased by Search 3,3% 1,7%12%. TV 60,0% *Digital comprises of Display Ads and Paid Search.
  • 6. Methodology & Analytical Approach • Applied MarketShare’s rigorous, market-tested econometric approach on a data set of thousands of data points across spend, sales, competitive and macro elements Regression Analysis Example The “Best Fit” Process is repeated, simultaneously, for all drivers Two Driver Example Sales (Y) ==αα(base sales) **XX1 (Paid Search Investment)*(Paid(Paid Lift Factor)Investment) (Paid Search (TV Lift Sales (Y) (base sales) 1 (TV Investment) (TV lift factor) X 2 Search Search * X2 (TV Investment) Lift Factor) Factor) 114 112 112 110 110 108 108 Sales Sales 106 TV Lift Factor = Paid Search Lift 106 Paid Search .06 Factor = 0.06 Factor = .03 TV Lift Factor = 0.03 Lift 104 104 102 102 100 100 5 25 45 65 85 105 5 25 45 65 85 105 TV Investment Paid Search Investment Paid Search Investment TV Investment 6
  • 7. Methodology & Analytical ApproachMarketShare evaluated all drivers of Carrefour’s personal computers sales. We builtpredictive dynamic models that accurately estimate Carrefour sales. Seasonality Holidays Competitive Media Economic Competitive Factors Paid Search Competitive Pricing Catalogues Carrefour PC Sales Website Catalogues Traffic Non Personal Google Computer Query Advertising Volume Paid Offline Online Search Media Display 7
  • 8. Methodology: Variables considered for Carrefour Legend Business Online world In Store world Outcome + Driver Online Traditional Media & - Driver Search online display ads (PC & Other) Pre-Christmas & Width of line Back to School indicates size Paid Search & SEO of driver (PC & Other) Holiday Email Short term Web traffic on In Store Sales Promo days Carrefour.fr Online Sales Competitive Media Summer and Price, Base Sales, Christmas Seasonality & Economic Holiday Factors 9
  • 9. Project Results: In-store Sales What are the key drivers of in-store personal computers sales?MarketShare Confidential and Proprietary 10
  • 10. Drivers of In Store Sales 10% of in store sales comes as a result of Carrefour’s web traffic.Sales Units 10% of in store conversions driven by web traffic on carrefour.fr Seasonality Radio* Promo Libre & Holidays 1.3% 1.1% 5.9% Display TV Ads Price Catalogues Magazine* 0.8% 0.7% 11.6% 8.1% 2.7% Base sales: 57.6% juil.-08 nov.-08 déc.-08 janv.-09 juin-09 juil.-09 nov.-09 déc.-09 janv.-10 juin-10 mars-09 avr.-09 mars-10 avr.-10 sept.-08 oct.-08 févr.-09 mai-09 sept.-09 oct.-09 févr.-10 mai-10 août-08 août-09 * Non Personal Computer Advertising – Halo effect ** Media Investment during limited periods of time 11
  • 11. Trends in In Store Conversions driven by Website Traffic Largest increase in in-store conversions occurred during the first quarter of 2010. Evolution Q3 2008 – Q2 2010 Q1 2010 In Store Sales Website Traffic (Visits)Sales Units YOY % Period Units driven by Change Web Traffic 3 000 Q4 2009 Q3 2008 3% Q4 2008 9% Q1 2009 7% 2 500 In Store Q2 2009 6% Sales driven Q3 2009 10% 224.9% by Web 2 000 Q4 2009 24% 181.0% Traffic Web Traffic Q1 2010 25% 242.6% (Visits) Q2 2010 15% 163.2% 1 500 Q4 2008 1 000 500 0 06/07/2008 27/07/2008 17/08/2008 07/09/2008 28/09/2008 19/10/2008 09/11/2008 30/11/2008 21/12/2008 11/01/2009 01/02/2009 22/02/2009 15/03/2009 05/04/2009 26/04/2009 17/05/2009 07/06/2009 28/06/2009 19/07/2009 09/08/2009 30/08/2009 20/09/2009 11/10/2009 01/11/2009 22/11/2009 13/12/2009 03/01/2010 24/01/2010 14/02/2010 07/03/2010 28/03/2010 18/04/2010 09/05/2010 30/05/2010 20/06/2010 13
  • 12. Project Results: Online Sales What are the key drivers of online personal computers sales? What are the personal computers media effects on website traffic?MarketShare Confidential and Proprietary 14
  • 13. Understanding the Drivers of Online Personal Computers SalesPaid Search and Magazine are responsible for driving 25% of revenue – nearly50% of all sales driven by marketing 57% of Carrefour sales 0,5% 2,0% 1,4% are non marketing drivers 2,6% 4,4% 5,1% 12,3% 14,8% 9,5% Paid Search and Magazine 10,4% are the biggest drivers of 37.0% online marketing sales. 43% of Carrefour sales are influenced by Marketing Base Price Seasonality Paid Magazines* Print* Catalogues TV* Radio* Display OOH* Sales & Holidays Search* Ads* Non PC: 11.9% Non PC: 1.4% Non PC: 14.6% PC: 0.3% PC: 1.1% Non PC: 1.3% PC: 0.2% PC: 0.1% 15 * Non Personal Computer Advertising – Halo effect
  • 14. Project Results: ROI of media spend What is the ROI on Carrefour Marketing?MarketShare Confidential and Proprietary 16
  • 15. Carrefour Personal Computers – Return on Investment Digital marketing is the most cost efficient media in the The ROI of each media is based upon the media investment and return . mix. 9 8 7 6 5Avg. 4ROI: 3€3.52 2 1 2,46 € 5,37 € 7,85 € 0 TV Magazine Online 17
  • 16. Appendix Background infoMarketShare Confidential and Proprietary 18
  • 17. Methodology: Model FitSales Units Model Average 30 000 Prediction Error = 4% 25 000 20 000 15 000 10 000 5 000 0 Actual Fitted 19
  • 18. About MarketShare PartnersWorld-Class Marketing Science + Real-World Industry Expertise All data analysis and econometric modelling was conducted by• Strategic analytics firm deploying industry’s most advanced analytic models for marketing effectiveness, ROI and allocation• Reputation of being the most innovative firm in the category, with focus on advanced math, thought leadership and action• Significant experience with new media, including search, social networks and display• Heavy emphasis on application of analytics to make better decisions going forward• An independently owned company delivering 100% objectivity in assessing marketing effectiveness. 20