"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Rahul Bafna, vice president of product management at Drawbridge.
The biggest opportunities for brands and advertisers still live offline. People may be using the Internet more than ever before, but after years of strong growth, ecommerce represented only 6.5% of total US retail sales in 2014.
This reality can be easy to forget amid excitement about marketing automation, personalized ads and cross-device attribution. Online shoppers create opportunities for businesses to gather insights about their customers and react accordingly. These insights are much harder to find offline. As a result, the importance of offline attribution often gets overshadowed or ignored.
With digital and mobile channels capturing an increasing share of marketers’ budgets, measurement became key to proving brand spending was generating ROI. The industry responded by solving the cross-device riddle, but tackling offline attribution is actually the more pressing challenge. Brand marketers need effective tools that tie digital ad spending, regardless of device, to in-store foot traffic and purchases.
Connecting online and offline will lead to unprecedented opportunities for brands and marketers. Today, brands are able to refine targeting and messaging to drive engagement across devices, but for the marketer who can understand and harness digital best practices to measure and increase physical sales, the world is his or her oyster.
National brands will be able to efficiently drive and attribute in-store foot traffic and sales, while local shops will be able to run hypertargeted ads and understand real increases in store visits. Offline attribution solutions have the opportunity to redefine the correlation between advertising and physical shopping in a multidevice world.
Purchase Data Vs. Store Visits
Today, there are two main methods that take advantage of mobile devices and cross-device identity solutions to link offline and online behavior. While individual marketers may have preferences around using either purchase data or store visits based on their specific measurement needs and capabilities, both solutions are effective at providing marketers with a picture of how their online efforts drive a lift in offline actions.
The CRM integration method aggregates purchase data and ties the spending back to the digital, cross-device reach that drove that purchase via cookie matching. This practice has been available for some time, yet challenges remain.
Brick-and-mortar businesses often lag behind ecommerce properties when it comes to capturing transactional data, which can require expensive CRM systems and detailed point-of-sale records. These sales lift studies measure campaigns using real sales data, though they can cost tens of thousands of dollars. While some large brands can justify these expenses, this approach is not for everyone.
Another challenge is that few of the available solutions can accurately connect offline spending to consumers who engage with media across multiple devices. Considering that more than half of multidevice consumers switch between devices multiple times a day, cross-device measurement is a key ingredient of accurate offline measurement.
The store-visit measurement method is the new kid on the block for measuring the effect of digital marketing on in-store traffic. The most common technologies behind measuring store visits rely on either ad requests or consumer panels. Using ad requests entails looking at the location data that passed through in those requests – consumers who browse ad-supported sites and apps while in stores can be matched to ads previously served on those devices, thus closing the loop between offline behavior and online marketing.
The panel approach relies on a set of users who have opted into sharing their mobile location. The smartphone-specific attribution provided by these solutions can be extended to desktop, tablet and even connected TV advertising via a cross-device identity solution.
Store-visit measurement is an incredibly cost-effective solution that is suitable for campaigns of any size. It also doesn’t require much infrastructure or set-up, unlike CRM systems. One shortcoming of these solutions is that it only shows store visits influenced by digital reach, not actual purchases.
Room For Both Methods
Both approaches support consumer opt-outs and are aggregated in a way that gives marketers a clear sense of how well their digital advertising efforts are performing, albeit with different types of measurement.
Though the number of offline measurement solutions in our industry is high, I ultimately think there is room for both methods. For some marketers, measuring visits may be ideal. An amusement park, for example, may run a digital campaign and only want to track visitors, not purchases. For more traditional retailers, however, I can understand the desire for a hard sync between purchase data and digital reach.
I think in the next 12 months we will see greater adoption of these methods, as well as the emergence of some new best practices for measurement. Beaconing, for example, is a promising technology, but so far there has been no viable solution to tie beacons to ad spending. Regardless, I’m looking forward to seeing offline attribution become more top-of-mind for marketers.