It’s a tale as old as advertising:
- You run ads promoting your business.
- People shop at your business.
- You have no idea whether those people were actually reached or impacted by your marketing efforts.
- Repeat steps 1-3.
One of the traits of online advertising that had got everyone really excited in the early 2000s was its trackability. Assuming you had your online ads set up properly, you could know when someone saw your ad, interacted with it, went to your website and made a purchase. It was the perfect ecosystem; we could now tell the exact ROI of our online ad spend and make all our decisions based on that data. Huzzah!
As I’m sure you know, this only paints a small fraction of the picture of the impact of digital advertising.
Savvy advertisers learned quickly that the internet and its impact was not limited to a computer screen — the line between channels became blurred, and digital media rapidly and increasingly impacted consumer purchase behaviour. Over time it became clear:
E-commerce sales are not the primary indicator of online advertising success.
(If you have a whiteboard, please write that sentence on it 100 times.)
This is even more true in Canada, where more than 90% of retail sales still happen in brick-and-mortar store locations. If you evaluate your digital marketing efforts by their direct contribution to your e-commerce sales, you’re drawing a line between online and offline that doesn’t exist in the eyes — or wallets — of consumers.
That said, without a measurement mechanism it’s tough to prove that your online advertising efforts are contributing in a meaningful way in the real world. So, how do you connect the dots?
Advertising behemoths Google and Facebook recognized this and, within the last couple of years, have come to the table with a remedy — or rather, a few.
Store visit data
Offered by Google, this feature enables you, in aggregate, to connect store visits back to your online advertising — including search, YouTube and display campaigns, among others.
Google leverages location data captured by its extensive network of apps (Google Maps, Gmail, Google Play, etc.) to provide location information for the individuals using those apps on their devices.
Google then aggregates this data, connects it back to users’ online activity, and reports back to you with the number of users who interacted with one of your ads and then later went into a brick-and-mortar store location.
If you have historical conversion rates (transactions/foot traffic) and average order value, you take this a step further and calculate Return on Advertising Spend (ROAS) by applying them to your store visit data to project the total revenue that was impacted by your Google ads.
Revenue ($) = Store Visits (#) x Closing Ratio (%) x Average Order Value ($)
Offline purchase data
Facebook’s primary offering in this space provides insight into how many people interacted with your ads on Facebook and then proceeded to make a purchase in your store. This is calculated by matching users’ email addresses on Facebook with the ones from your own POS data.
It’s an imperfect system, as not every email address captured in your stores is going to match a Facebook or Instagram account — but getting reporting on confirmed transactions is incredibly valuable, so it ends up being a fair tradeoff.
(Plot twist: Google Store Sales Direct offers a similar feature, which also uses email matching to report on in-store sales. The bad news? This feature is still in beta, meaning only a select number of advertisers can access it. It’s unclear when this will be rolled out en masse.)
Revenue ($) = Transactions (#) x Average Order Value ($)
But alas, as fierce competitors, Google and Facebook have to date not “played nicely” together in terms of allowing ways for advertisers to neatly combine their data into a single-deduplicated number.
What that means is that although you can see that your most recent campaign on Facebook contributed to 25 in-store purchases and your Google campaigns assisted with driving 200 people in-store, you have no way of seeing the overlap between the two — that is, how many people interacted with both a Facebook ad and a Google ad and then went in-store and purchased.
This lack of transparency provides a bit of a stumbling block for advertisers looking to provide a holistic view of ROAS.
The game changer
Advertisers rejoice! Earlier in 2018, Google announced that store visit data would be rolled out as a new feature for Analytics. It remains to be seen when this feature will be widely available and how complete the data will be (and there’s a laundry list of requirements for being included), but this could provide an unprecedented glimpse into the online-to-offline customer journey for many advertisers.
Not all of the options listed above are applicable for all advertisers (yet) — particularly for small- to medium-sized businesses. Regardless of your size, however, you have options for gaining insight into the total impact of your marketing efforts.
Have questions? Please feel free to reach out.