Multichannel merchants risk faulty ROI with no in-store sales calculations

Multichannel merchants risk faulty ROI with no in-store sales calculations

Content Writer: Aaron Boggs Aaron Boggs President

A 2009 Forrester Research report estimated that by 2014, web-influenced offline sales will account for 53 percent of all retail sales, totaling around $1.4 billion, Search Engine Land reported.

Retail marketing firm RexTrax was able to do away with "guesstimating" with the recent release of a two-year study that is cited as the first legitimate analysis of online-to-offline revenue tracking

Typically, when a consumer searches for a product online and clicks on an advertisement via a paid search ad for a multichannel merchant, the company tends to lose track of that customer because he or she may not enter the brick and mortar location until days - or even weeks - later.

Specifically, researchers were able to determine that for every $1 of ecommerce revenue generated from paid search comes $6 dollars of in-store profit.

How did they do it? Well, between August 2009 and August 2011, millions of retail clients' paid search ads and sales were monitored, with in-store purchases tracked using landing pages with coupons.

For example, a paid search ad was shown to a customer, which led him or her to a printable (or mobile, if on the go) landing page that displaying a coupon with a QR code. If the coupon was redeemed in-store, it could then be traced back to the aforementioned paid search ad.

For the average transaction under $200, a click on a paid search ad resulted in around $15 worth of brick and mortar revenue, while about 9 percent of clicks on a paid search ad generated an in-store sale. Thus, researchers concluded that multichannel merchants who were not including in-store sales in ROI calculations for paid marketing efforts were "undervaluing the paid search channel by as much as 85 percent."

Is paid search truly that effective? Well, researchers cite an eMarketer survey that predicts the practice to make up $10.2 billion of U.S. ad spend (43 percent of all online ad spend). They also mention a Yahoo/comScore report which says paid search is more than three times as effective for in-store sales than display advertising.

Knowledge of local SEO tactics, keyword optimization and other techniques is necessary to induce paid search success, but multichannel merchants could eventually parlay in-store revenue information to purchase keywords that directly generate brick-and-mortar sales, not just online ones.

As Google Think Insights reports, a similar study conducted by the search engine giant found that when it came to food products (specifically, Kellogg's, Nestle and Campbell's), paid search led to a 3.1 percent increase in offline sales.  

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