Case study for measuring internet ROI for in-store sales

Google Confidential and Proprietary

Understanding the complete marketing ROI on personal

computer sales for Carrefour

Carrefour Online-to-Store study

1

125% of Carrefour in-store PC sales are driven by marketing

- Among those, online advertising accounts for 43%

2Over 10% of in-store sales are driven by website traffic

- During peak periods, website traffic drives 25% of in-store sales

3Each € invested in online advertising delivers €7.85 in sales

- Online advertising is the most cost-effective advertising driver, with an ROI twice as high as the

average for all marketing drivers

Executive Summary

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Research Objectives & Scope

Objectives

• Understand the drivers of business outcomes and analyse the impact of Carrefour’s media

investment onto personal computers sales (desktops, laptops & netbooks).

• Identify the optimal personal computers marketing mix allocation to generate greater sales from the

same level of investment

Scope

• As part of this study, the personal computers category (desktops, laptops & netbooks) was analysed

across both the online and in store channels at the national level.

• 97,8% of the computer sales take place in-store, and 2,2% online.

• This study quantified the drivers of three key business outcomes: sales units, website traffic and

query volume (GQV).

• The data time period of this analysis spanned from July 2008 to June 2010 (104 weeks).

*GQV reflects the number of queries that have been done for a particular term, relative to the total

number of queries done on Google over time.

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Situation Analysis – 1/2

• Carrefour’s personal computers sales units have

grown almost 16% over the period of this study

(July 2008 – June 2010).

• Over the analysis period, average price trends

declined across all products and channels.

In value, in store PC sales grew by 2% and online

sales by 10%

• Online search interest for the term ‘Carrefour’

has slightly declined, however total site traffic to

www.carrefour.fr has doubled over the time period

of this study.

Personal Computer Sales

Carrefour Query Volume & Website Traffic0

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Website Traffic Trends

Website Traffic

+106%

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Situation Analysis – 2/2

Carrefour is the 2nd player in terms of personal

computers spend and catalogue circulation

relative to its competitors.

• During the data sample period, Carrefour’s

total investment for personal computers has

remained stable.

• The Personal Computer investment represents

2% of Carrefour’s total media investment.

• Certain channels such as digital*, TV and

radio have seen sizeable increases.

• Overall catalogue circulation has increased by

12%.

Competition / Marketing spend

*Digital comprises of Display Ads and Paid Search.

Media Investment / catalogues

Display Ads

11,6%Magazine

3,3%

TV60,0%

Paid Search1,7%

Catalogues 23,4%

Carrefour Historical Mix

July 2008 – June 2010 (net spend, source: TNS, Google, FLE)

41,32

19,46

13,45

10,5

5,87

3,34

3,01

FNAC

CARREFOUR MAGASINS

CONFORAMA

E.LECLERC MAGASINS

AUCHAN

DARTY

BOULANGER ELECTRODOMEST.

Competitive ad spendJan 2009 – Dec 2010 (source: TNS, gross spend, computers category)

Regression AnalysisThe “Best Fit” Process is repeated, simultaneously, for all drivers

Two Driver Example

Sales (Y) = α (base sales) * X1 (TV Investment) (TV lift factor) * X2 (Paid Search Investment) (Paid Search Lift Factor)

100

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106

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5 25 45 65 85 105

Sa

les

TV Investment

100

102

104

106

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112

5 25 45 65 85 105

Sa

les

Paid Search Investment

Paid Search Lift Factor = .03

TV Lift Factor = .06

Example

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• Applied MarketShare’s rigorous, market-tested econometric approach on a data set of

thousands of data points across spend, sales, competitive and macro elements

Methodology & Analytical Approach

Paid Search Lift Factor = 0.06

TV Lift Factor = 0.03

TV InvestmentPaid Search Investment

Sales (Y) = α (base sales) * X1 (Paid Search Investment) (Paid Search Lift Factor) * X2 (TV Investment) (TV Lift

Factor)

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SeasonalityCompetitive

Media

Competitive Paid Search

Competitive Catalogues

Website Traffic

Google Query

Volume

Paid SearchOnline

Display

Offline Media

Non Personal Computer

Advertising

Catalogues

Pricing

Economic Factors

Holidays

CarrefourPC Sales

Methodology & Analytical Approach

MarketShare evaluated all drivers of Carrefour’s personal computers sales. We built

predictive dynamic models that accurately estimate Carrefour sales.

Methodology: Variables considered for Carrefour

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In Store Sales

Online

Sales

Summer and Christmas Holiday

Holiday

Competitive Media

Traditional Media &online display ads

(PC & Other)

Web traffic on

Carrefour.fr

Paid Search & SEO(PC & Other)

Email

Online

Search

Online world In Store worldBusiness

Outcome

+ Driver

- Driver

Legend

Price, Base Sales, Seasonality & Economic

Factors

Short term Promo days

Width of line

indicates size

of driver

Pre-Christmas & Back to School

MarketShare Confidential and Proprietary 10

Project Results: In-store SalesWhat are the key drivers of in-store personal computers sales?

juil.-0

8

ao

ût-0

8

sept.-0

8

oct.-0

8

nov.-0

8

déc.-0

8

janv.-0

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févr.-0

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mars

-09

avr.-0

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ma

i-09

juin

-09

juil.-0

9

ao

ût-0

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nov.-0

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déc.-0

9

janv.-1

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févr.-1

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mars

-10

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0

ma

i-10

juin

-10

Sales Units

Drivers of In Store Sales

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10% of in store sales comes as a result of Carrefour’s web traffic.

Catalogues

8.1%

Display

Ads

0.7%

Promo Libre

1.1%

Magazine*

2.7%Price

11.6%

Seasonality

& Holidays

5.9%

TV

0.8%

Radio*

1.3%

* Non Personal Computer Advertising – Halo effect

Base sales: 57.6%

** Media Investment during limited periods of time

10% of in store conversions driven by

web traffic on carrefour.fr

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Website Traffic (Visits)Sales Units

Trends in In Store Conversions driven by Website Traffic

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Largest increase in in-store conversions occurred during the first quarter of 2010.

In Store

Sales driven

by Web

TrafficWeb Traffic

(Visits)

Evolution Q3 2008 – Q2 2010

Period

In Store Sales

Units driven by

Web Traffic

YOY %

Change

Q3 2008 3%

Q4 2008 9%

Q1 2009 7%

Q2 2009 6%

Q3 2009 10% 224.9%

Q4 2009 24% 181.0%

Q1 2010 25% 242.6%

Q2 2010 15% 163.2%

Q1 2010

Q4 2008

Q4 2009

MarketShare Confidential and Proprietary 14

Project Results: Online SalesWhat are the key drivers of online personal computers sales?

What are the personal computers media effects on website traffic?

10,4%

9,5%

14,8%

12,3%

5,1%4,4%

2,6%2,0% 1,4% 0,5%

Display

Ads*

Non PC: 1.3%

PC: 0.1%

15

37.0%

57% of Carrefour sales

are non marketing drivers

43% of Carrefour sales are

influenced by Marketing

Paid Search and Magazine are responsible for driving 25% of revenue – nearly 50% of all sales driven by marketing

Paid Search and Magazineare the biggest drivers of online marketing sales.

Base

Sales

Price Seasonality

& Holidays

Paid

Search*

Non PC: 14.6%

PC: 0.2%

Magazines*

Non PC: 11.9%

PC: 0.3%

Print* Catalogues TV*

Non PC: 1.4%

PC: 1.1%

Understanding the Drivers of Online Personal Computers Sales

Radio* OOH*

* Non Personal Computer Advertising – Halo effect

MarketShare Confidential and Proprietary 16

Project Results: ROI of media spendWhat is the ROI on Carrefour Marketing?

Carrefour Personal Computers – Return on Investment

17

The ROI of each media is based upon the

media investment and return .

Digital marketing is the most cost efficient media in the mix.

2,46 € 5,37 € 7,85 €0

1

2

3

4

5

6

7

8

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TV Magazine Online

Avg.

ROI:

€3.52

MarketShare Confidential and Proprietary 18

AppendixBackground info

Methodology: Model Fit

0

5 000

10 000

15 000

20 000

25 000

30 000

Sales Units

Actual Fitted

Model Average

Prediction Error = 4%

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About MarketShare Partners

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World-Class Marketing Science + Real-World Industry Expertise

• Strategic analytics firm deploying industry’s most advanced analytic

models for marketing effectiveness, ROI and allocation

• Reputation of being the most innovative firm in the category, with

focus on advanced math, thought leadership and action

• Significant experience with new media, including search, social

networks and display

• Heavy emphasis on application of analytics to make better decisions

going forward

• An independently owned company delivering 100% objectivity in

assessing marketing effectiveness.

All data analysis and econometric modelling was conducted by