Measuring online impact on offline conversions - Ovative Group
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Measuring online impact
on offline conversions
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, Navigating the changing
addressable, and measurable, but despite the proliferation of tools and measurement landscape
technology, there is still widespread uncertainty about the accuracy Reframing from a
of the data produced by these tools. One study reported that 70% of customer point of view
marketing executives would increase their spending on mobile, digital
and social platforms if there were better ways to measure return on Enterprise measurement
investment.1 and the role of O2O
Case study: Retail
Reconciling the results of a company’s digital marketing effort with its
offline marketing and sales can appear to present an insurmountable Using partners to
barrier: each channel produces different data points that are measured expand reach
by different tools. But consumers increasingly move from online
What’s next
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
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.Search Engine 75%
CONSUMERS USE Online-Only Retailer
Sites/Apps
71%
THE FOLLOWING Website/Apps for Retailers 70%
ONLINE SOURCES with Physical Stores
FOR INFORMATION Social Networking
Website/Apps
39%
ON PRODUCTS + Online Video 36%
SERVICES: Websites/Apps
Coupon or Daily Deal 35%
35% Websites/Apps
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.
2How the customer sees it
Seamless experience through a world of Omni-channel touch points
6 AM 10 PM
HOME commute work commute retail home BED
Phone
Tablet
Desktop
Retail / POS
TV
Radio
Print
How your business operates
PRINT RADIO DESKTOPT POS V TABLET
A divided view of the customer where
BRAND IMAGE
decisions are made in silos
KEY LIGHT usage MODERATE usage Heavy usage
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:
3Components of enterprise measurement
Real-time metrics help allocate and
optimize budgets based on interactions
across multiple marketing channels.
Media mix applies both customer-level
REAL-TIME and regression-based statistics to measure
METRICS MEDIA MIX media investment across digital and
traditional channels.
O2O insight: syndicate media using
Testing can validate or disprove
assumptions made about the effectiveness
of strategies, channels and executions,
enabling continual refinement of models.
TESTING ATTRIBUTION Attribution modeling assigns value to
touchpoints both on and offline
O2O insights: A/B test
to confirm or disprove conversions and segment by O2O insights can layer over each
hypotheses for cross-channel audience
consumer behavior 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.
4Ovative/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 CRM
email address customer@aol.com email address customer@aol.com
revenue $5500
display impression paid search w/ sign-in store purchase
account sing-in
ad server CRM
impression +
ad server ID 459001 ad server ID 459001 email address customer@aol.com
display
email addressc ustomer@aol revenue $5500
channel paid search
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.
5SEM keyword performance with and without O2O
In this case, we’re looking at Campaign Spend ∆
an SEM keyword comparison of online s tore + online
cost per acquisition for online Keyword 1 $2300 $80 $5 -94%
only versus when store is also Keyword 2 $1750 $45 $45 -11%
Keyword 3 $2100 $30 $30 -7%
considered.
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 Toaster Ovens
Furniture
2500%
IN-STORE
CONVERSIONS
Small Appliances
2000%
FROM ONLINE
SHOPPERS 1500%
BY PRODUCT 1000% 1.5x
Home Décor
Bed + Bath
CATEGORY
Dresses
500%
Shoes
Kids
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.
6Using 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 omni-
channel 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
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Drop us a note to info@ovative.com
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