Searching for the Retail Value of SEM

Posted on by Chief Marketer Staff

Search engine marketing (SEM) does more than deliver immediate online transactions. It generates in-store transactions too. A 2005 research from the Dieringer Research Group revealed that more than 80 million U.S. consumers a year make offline purchases after researching online; most bought more than what they researched once they got into the store. Also, a comScore study last year found that the majority of marketers’ search conversion, 63%, occurred offline.

But most marketers still need a hard number to work with to factor offline demand into campaign metrics. So we developed a method, an “offline multiplier” that mathematically attributes online and offline value to SEM investments by quantifying the amount of offline sales influenced by search for each $1 in online sales generated by SEM.

But quantifying the scope of what we call “search-influenced demand” isn’t simple. To create an offline multiplier and calculate total search-influenced demand, you must understand specific attributes of your vertical market sector, your customers’ behavior, and the differences across product categories. The size of your offline footprint — the number and location of your stores — helps quantify geographic locations where a search-to-store strategy can be leveraged. A higher average purchase price, meanwhile, equates to higher consideration and an increased likelihood of the transaction happening in a store.

In one survey, we polled the client’s online customers as well as an anonymous panel regarding their shopping and purchase behavior online and offline. From that information and purchase data we were able to determine that the client’s customer base exhibited an offline multiplier of $2.50: For every dollar in online sales generated by search, an additional $2.50 is generated offline.

Offline multipliers can go much higher. In some retail verticals, marketers can expect to find offline multipliers as high as $5-$7. Once you understand this dynamic, search program data take on new light, accounting for more actual sales, and become more accurate and actionable.

Because of the complexity, it may take a while for your company to develop its offline multiplier. In the meantime, though, you should still consider ways to cater to search-to-store shoppers:

* Consciously seek out high-value cross-channel customers:
Simply thinking of the search-to-store customer as a target can make a major impact on your keyword selection and SEM strategies.

* Buy affinity or behaviorally targeted keywords:
Invest more on terms that reach consumers interested in lucrative product categories or categories presenting great cross-sell potential. Place emphasis on the keywords most likely to create significant in-store activity. You can be more flexible with their online ROI metrics.

* Localize national campaigns:
Implement geo-targeting to greet customers with landing pages touting local stores, especially with products highly likely to transact offline, such as furniture or major appliances. And be sure that these landing pages make the offline channel readily available and appealing.

* Implement complementary merchandising tactics:
For instance, whenever possible, encourage “buy online, pick up in a store” customers to purchase additional items in the store before they leave.

Cam Balzer is director of search strategy for Performics, the Chicago-based performance-marketing division of DoubleClick. This article appearing originally in Multichannel Merchant, sister publication of Direct.

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