More evidence of online-offline convergence as study shows online campaigns drive offline sales

By July 24, 2012Advertising

Finnish company RapidBlue has released the results of a study showing that Google Adwords campaigns result in increases in visits to stores and time spent in stores. The study looks like it was pretty thorough. Researchers took data from Royalblue’s proprietary technology which tracks mobile phones in retail outlets and output data from EPOS systems, and then correlated both these data sets with spend on Adwords campaigns, whilst controlling for a host of other variables. You can read more detail on Venturebeat.

For a while traditional retailers have been seeking to leverage their physical stores to improve their online offering by offering services like pick up and return to store, and this research shows that the trend also goes the other way – their online activity is benefiting their offline stores. This is significant for two reasons:

  • it should encourage retailers to shift more of their ad spend online
  • ceteris paribus, clicks and mortar retailers will have superior unit economics to pure play online retailers, enabling them to either bid higher for key search terms

This research is great, but it stops short of true online to offline attribution of the sort that the deal between Yahoo and UK offline loyalty card scheme Nectar promised back in 2010. That would be a huge step forward.

  • There was a deal in the US last year by a competitor of mine at the time involving 2 merchants closing the online/offline loop. They had demonstrated a correlation between 2 retail merchants’ customers online so they cookied the first merchant’s customers and tracked them to a purchase on the second using the second merchant’s credit card which would give them the identity of the person which they could then associate to an offline purchase in a store. Of course you need massive amounts of data, huge penetration and lenient data protection regulations to do this but I found the concept very exciting and tried to replicate it in Europe. 

    I’m convinced of the multi-channel effect of marketing and promotion but it’s very hard to prove. If it can be proven then marketers will happily shift offline advertising dollars online – the first merchant did exactly this. This is a massive opportunity for mobile advertising channels.

  • There have been a number of small initiatives in this area, but nobody has tried to build a business. Why do you think that is, is it the privacy concerns?

  • There’s a general fear of the consumer backlash driven by the “Do Not Track” initiatives in the US and the EU Cookie Laws. Interestingly enough people still refer to the Doubleclick acquisition by Google as the case in point – that was over a decade ago but people in the industry don’t want that kind of focused spotlight on exactly what they do with customer data. The data controllers and processors know they could be doing more but also know that the consumer thinks they do too much already. No-one is willing to go out on a limb and strike that first deal – we’ll have to wait for Amazon or Google to unite church and state and see how the markets (and the authorities) react.

  • Interesting. thanks