Online Search Ads Drive 6x Retail Sales
Online Search Ads Drive 6x Retail SalesJan 25 2012 - Marketing - Farhad Divecha
A recent study has found that online search ads drive not only online sales but offline sales as well.
The study was conducted by cross-channel analytics provider, RevTrax, over a period of two years between August 2009 and August 2011 across hundreds of merchant outlets and covered millions of transactions.
The process followed was quite simple. When a paid search ad was displayed to a consumer, it led to a printable or mobile landing page that had a coupon with a unique barcode. The consumer could redeem this coupon by going to a physical store. The barcode on the coupon could be used to track the search activity that led to the engagement of the consumer, finally leading to redemption of the coupon. This system made use of direct marketing to record and analyse the effect of variables on the sale of goods.
It was found that for every $1 generated online by the ad, the retailer recorded a sale of about $6 offline (in store purchases). This indicates that retailers would be wise to concentrate on paid search ads as they also increase offline sales.
On average, a click on a paid search ad generated approximately $15 of in-store revenue, with some
merchants seeing as much as $28 of in-store revenue. Approximately 9% of clicks on a paid search ad generated an in-store sale.
While these findings were true for large businesses with several physical stores, smaller businesses would have to test the effectiveness of this system further.
It is also true that large retailers can afford to lose margins as a marketing expense and then make up for the losses through increased market share.
Online retailers who do not come up with interesting coupons are likely to lose out on market share, as coupons become more popular among online customers.
This is a great opportunity for marketers of various offline services such as restaurants and theaters to concentrate on online ads to improve their market share.