Measuring Offline Impact of Online Marketing

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Presented at both Ad-Tech NYC 2011 and the Internet Summit 2011, Resolution Media's Jeff Campbell took the audience through the importance of measuring the impact of your online marketing through offline/brick & mortar locations. Presentation covers media attribution, media mix modeling, and clicks to brick online to offline measurement.

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  • Media consumption and research have shifted online, but majority of all sales still occur offlineForrester Research projected online retail revenues to be $173 billion in 2010, growing over 40% to reach nearly $250 billion by 2014. Yet for all the projected growth, the online channel will account for just 8% of total retail sales revenue. Undervalues online.
  • New attribution models are necessary to measure total business impact (online + offline) of digital advertising.Current model rewards Search, punishes Email, Display, SocialCentralize online tracking with WA to reduce duplication
  • Forrester: 48% of all retail sales are either online purchases or Web-influenced purchases. This trend will continue, and by 2014, this number is forecasted to increase to 53%, or $1.4 trillionSeparate .com groups with e-comm goals in favor of total company…including online marketing budgets/goalsMobile & Social media forcing a lot of integration – PR, Print (tablets)
  • Surveys (Eg. Foresee, POS, panel-based) (ask buyers if they’ve visited FB page), Unique Coupons/Offers, Loyalty Programs/Email, turning on and off campaigns
  • Rewarding individual consumer touchpoints that lead to a sale vs. defining the influence of adv. mediums to drive the most salesDefining Attribution:Assign a value/credit to every marketing touchpoint before a consumer purchase -too many variables today, non-linear process, push vs. pullQuantify the true ROI and incremental sales lift of a single mediumGiven a fixed $ input, model provides an ideal mix to achieve highest outcome
  • Relationship of various marketing activities to sales through regression models.Consideration of macroeconomic factors as well (what happens to mortgage apps if the Fed drops int. rates by x%)Explain what APT Software does
  • Explain test methodology – treated/test vs. controlHeavy variance of paid search by market, by season, by product group – unlike what is seen with traditional media
  • No longer will it be ‘what are the costs of the GRPs I’m buying’ but ‘how many 1-800 # leads will that drive and what will be resulting sales’.Holding company media shops have an advantageFinal Point: media will be held more accountable to sales, will your business be ready…have you started to connect the online & offline silos?
  • Measuring Offline Impact of Online Marketing

    1. 1. MEASURING THE OFFLINE IMPACT OF PAID SEARCH Jeff Campbell – Co-Founder & Head of Retail Resolution Media November, 2011 CJeffCampbell 1 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    2. 2. TODAY’S SHOPPING EXPERIENCE IS ONLINE & OFFLINE Media Purchase Purchase Consumption Process Location 41% is online Non-linear 93% of sales occur offline Google Friends TV Magazines Websites Price comparison Source: Google Touchpoints Consumer Survey, *U.S. Retail Consumers, January 2009. Clicks to Bricks: The Impact of Online Pre-Shopping on Consumer Shopping Behavior, Yahoo! and comScore, 2007; Emarketer citing, data is from January 2009 2 Sterling Commerce research for which 1,017 US consumers ages 18+ were surveyed via telephone by OpinionPROPRIETARY AND CONFIDENTIAL ResearchAn Omnicom Media Group Company Corporation from January 2-4, 2009, HHI +$75k;
    3. 3. ATTRIBUTION CURRENTLY STOPS AT E-COMMERCE Source: February 2009 “US Online Retail Forecast, 2008 To 2013,” Forrester Research Internet Retail Offline Influence Model, Dec 2009. 3 Conversion rates are for illustrative purposes, based on a set of Google internal aggregated results. Data are estimates and PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company should be used directionally.
    4. 4. SILOS ARE COMING DOWN 4 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    5. 5. DIRECTIONAL O2S MEASUREMENT 5 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    6. 6. ATTRIBUTION VS. MEDIA MIX MODELS 6 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    7. 7. MEDIA MIX MODELING METHODOLOGIES • Models built on post-effort analysis/correlation TC Rev = $7.2B TC Rev = $10B • Market Holdout Testing • Traditional A/B approach • Software chooses test markets based on store sales history 7 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    8. 8. RETAILERS ACTIVELY TESTING O2S Test Search + content Control None v “ The 2% sales lift was impressive and successful in proving that our online advertising drives in-store sales. Online is quick, flexible and targeted advertising that must be within your advertising mix. ” -Ronnie Hodges, Director of Marketing, Pier 1 Imports 8 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    9. 9. CASE STUDY: PIER 1 IMPORTS Paid Search Ads (Locally Targeted) 1 Overall sales lift of 2% in test markets when compared to the control markets Positive 300% return on advertising 2 investment (Pier 1 Imports received three dollars in sales for every dollar spent Online) Contextually Targeted Ads (Locally Targeted) Pier 1 Imports® 3 Additional lift of up to 5.3% in a select group of underperforming stores Amazing Deals on Fresh Fall Looks 1.4% lift in furniture category during at Pier 1‟s Fall „N Groovy Event! a five week test period noteworthy because www.Pier1.com 4 the average consideration for furniture purchases is greater than the five week test period 9 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    10. 10. HOLDOUT TESTING IS NOT PERFECT, BUT A START • Isolates test factors/report card • Doesn’t rely on last-click • Accounts for non-test media lift/assists equally • Can drill down to message or campaign level Paid Search • Results don’t predict future; emerging media = rapid change 2.4% lift, 15:1 ROI, 38% Margin • Gain accurate multipliers for all media • Media must have geo targeting abilities Newspaper • Time to run test, limited test markets – must gain statistically 3%, 2:1, 15% significant results Radio • No B.S. awareness/recall metrics…SALES! 0.8%, 5:1, 25% • Doesn’t account for LTV/Branding though • Accounts for test market abnormalities • Software costs 10 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    11. 11. RUNNING A TEST Determine Report &Hypothesis/KPIs active & latency Market selection Media Set-up Launch Analysis period lengths Daily budget Test market Consider seasonality Medium vs. Product Mirror normal monitoring: Start abnormalities & macroeconomic Category vs. Message campaign strong vs. playing (weather, natural activity catch-up disasters) Exposure level: Dark Pre-period, Budget Forecasting Weekly reporting vs. normal vs. high treatment, & latency End goal: Sales volume, Sales Lift %, Statistical Significance Category lifts, ROI/margin Rinse & Repeat: Build curves by medium by season by category 11 PROPRIETARY AND CONFIDENTIAL An Omnicom Media Group Company
    12. 12. OUTLOOK/FUTURE OF ATTRIBUTION • Today • Who in your org understands statistics & econometrics? • Tomorrow • Less silo’d media shops & marketing departments • Machine-based ROI Simulators • 3-5 years • Built in to media buying portals • Measure outcomes, not inputs 12 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company
    13. 13. THANKS! Jeff Campbell Co-Founder & Head of Retail JCampbell@ResolutionMedia.com CJeffCampbell 13 PROPRIETARY AND CONFIDENTIALAn Omnicom Media Group Company

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