Online-To-Offline-Whitepaper

Online to Offline

By: Brandon BetheaChief Marketing Technologist

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THE CONVERSION OPTIMIZATION AGENCY™

© 2014 Sq1 Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Sq1, Square1, Sq1 Agency, Brandcube™, Sq1 Brandcube™ and Adaptive Media are trademarks of Sq1 Inc. All other trademarks are the property of their respective companies. For more information, go to www.sq1.com/blog/whitepaper

Why read this paper?

For today’s marketers, finding the right tools to make connections between digital campaigns and offline sales is a tall order, given a disparate market. Digital marketers have long been looking for a way to attribute brick-and-mortar and phone sales to campaigns originating in the digital realm. For marketers paving the way in the increasingly digital realm, it’s a quest that’s akin to searching for lost treasures in an Indiana Jones movie. The cavernous gap between online engagement and offline sales is new territory even for the most savvy among us. But the prize proves to be worth the pursuit, as finding the connection between the two validates the impact of digital marketing and can lead to greater ROI for clients.

FINDING THE MISSING LINK: CONNECTING THE ONLINE/OFFLINE DOTS

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MEASURING THE DENT DIGITAL MAKES IN OFFLINE SALES

Consumers use approximately 10.4 sources of information to guide their purchase decisions, and Internet research is typically the most influential.

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If you can prove direct cause and effect between online marketing and the offline channels that still account for more than 90% of U.S. commerce,1 you will have done your client an enormous service. Plus, when you consider that high percentage, you have a pretty compelling reason to gain insights into what drives consumers to purchase offline, provided you have a marketing attribution solution that can connect the dots.

Fortunately, for marketers attempting to make connections between online engagement and real-world sales, there’s help. Today, marketers don’t have to rely on hunches or gut feelings to link digital marketing and offline sales. There are closed-loop tools that can provide objective measurement, and by using them, marketers can take advantage of the synergy between digital campaigns and offline sales to maximize efficiency in messaging, media and targeting.

The challenge facing marketers in attributing sales in the multichannel marketplace:

The reality is this: the customer journey to purchase involves many touch points, and they consist of both online and offline elements, and you can’t control them all. So as a marketer, how do you determine which ones work so you can optimize them? And, more specifically, how do you discover which digital initiatives have influenced sales? Marketing attribution is the answer. Without the insights gained in correlating attribution to the touch point that led to the conversion or sale, your planning, allocation and execution of your campaigns are limited in efficacy at best.

Consumers use approximately 10.4 sources of information to guide their purchase decisions, and Internet research is typically the most influential. With this knowledge in mind, marketers have had to adapt and increase the scope of their marketing initiatives across multiple channels, devices and screens to ensure their messages reach consumers at the right time, with the right message. In the digital realm, marketers have been able to employ sophisticated attribution and bid management platforms to measure cross-channel marketing and track conversion. This increased visibility into the consumer’s journey through brand engagement has allowed marketers to be more specific in attributing sales to specific

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digital channels, but unfortunately, attribution’s effectiveness is severely diminished for multichannel marketers who work in the offline space. In fact, it’s almost impossible for marketers to know exactly how consumers engage with their online ads across various channels before making an offline purchase.

Attributing in-store conversion to online marketing campaigns has been a significant black hole that hampers investment and optimization in digital initiatives. That’s why it’s imperative that online marketers traverse the divide between online marketing and offline sales. By creating these attribution models, marketers can ensure they are investing in channels and campaigns that drive sales and represent the real holistic value of their investment in online marketing. In the past, this process has been time-consuming and difficult, and hasn’t always led to the greatest metrics for success.

But the times, they are a-changin’. Solutions that address the gaps between online and offline attribution are now available. Universal metrics, like calls and other secondary actions such as coupon and map downloads, can help link digital and mobile engagement to offline consumer response and are strong conversion indicators. And Google has introduced Website Call Conversions to provide online-offline


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attribution for its AdWords programs. For marketers, this means a trail has been forged, linking online and offline business. And that’s a great thing.

Ad-tech is now adopting technologies that can aid in attribution, so digital campaigns can measure their effectiveness across all channels. According to Brandon Bethea, Chief Marketing Technologist, “The ability to have a one-to-one match for offline sales and attribute that back to every granular detail of digital campaigns, be it from audiences, different channels, different keywords and placement and display placements, gave us a new opportunity to optimize and maximize budgets. Prior to adopting attribution, we never felt we were able to bring the precision and accountability of digital to the scale and volume of retail sales. So now that we have this one-to-one match, it actually makes not only offline measurement possible, but it makes our digital attribution much, much stronger.”4

Connecting online media to offline sales gives you deeper insights:

When you activate online-to-offline digital channel attribution, you not only increase the efficiency of your digital marketing programs, but you also acquire a much better look at which audiences, channels and creative drive the highest returns. By connecting data across various marketing channels, you also:

• Improve measurement so you learn which channels, tactics and creative are responsible for driving in-store transactions.

• Focus targeting so you direct messaging toward your most profitable first-party customer segments and build look-alike models using third-party data sets.

• Boost personalization so you can deliver relevant consumer offers via digital channels that can directly influence offline sales.

Compiling and analyzing the right data are key to better measurement:

To get a better look at how digital campaigns impact offline sales, you need to assemble the right data sets. Here is a look at the elements you should be gathering:

• Offline sales transaction data — product codes, purchase amount and purchase date

• Campaign exposure data — devices exposed to ads, ad campaign served and exposure date (originates from a marketing application or media platform used to run the campaign)

• Transactional data from POS or CRM systems

You will need a data onboarding service provider to connect offline sales transaction data to campaign exposure data on behalf of your brand. It’s worth noting that these reputable data services conduct their research in a privacy-compliant manner that ensures complete privacy for consumer identities; personally identifiable information such as email or postal addresses are never shared.

Adding additional benefit, data onboarding services match sales transaction data to online devices. As such, a data onboarding service provider can improve both online and offline sales measurement and provide insight into cross-device purchase pathways. Marketers can also use data onboarding services to connect customer databases to marketing applications and improve campaign targeting and content personalization.

Bridging the gap between digital marketing and in-store marketing:

Looking for a cookie-cutter, one-size-fits-all solution, you’re out of luck. Each solution must be tailored to your specific needs and built around your CRM system and sales goals. However, no matter what your marketing goals, there are best practices you can establish to connect your online and offline marketing. Here are a few ways you can ensure success, no matter your marketing needs:


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1. Leverage your existing resources. Use your CRM data to build out your audience segments using look-alike modeling, and you can find more customers comparable to the ones you’ve already acquired.

2. Choose a single source. When you integrate multiple sources of third-party data with your own first-party data, it’s more difficult to validate and draw conclusions. Make sure your team agrees to assign one provider to be the clearinghouse for your data so you can create greater homogeneity in your analysis.

3. Remain calm. Lots of data points lead to lots of possibilities, which can produce a great deal of anxiety if you let it get to you. Don’t let yourself get overwhelmed. Even with a plethora of data, your story stays the same. At Sq1, we use customer segments to tie it all together. When we get new data, we build it into the customer stories we’re already telling.

4. Patience really is a virtue. Digital marketers have grown accustomed to real-time results. When we don’t like what we see, we optimize on the fly. This agility is both an advantage and a shortcoming of having data-powered dashboards at your fingertips. Remember, this approach doesn’t work for offline sales, which run at a much slower pace and need more time to return results.

Therefore, if the goal of your campaign is to drive offline sales, then plan and execute your campaign, and be patient. Monitor your campaign, but don’t make the mistake of thinking that it’s all about the cost per click (CPC). Focus on sales and give yourself some time to build out a data set, and you’ll be able to tell what is and what isn’t driving ROI. If you’re not happy with the results you see at the end of the campaign cycle, then, and only then, should you rethink your tactics.

5. Usability matters. User testing might seem superfluous in an era of real-time campaign optimization, but marketers who do not engage it are potentially risking a huge opportunity to optimize their work. Testing the impact of your creative with the very customers you’ve designed it for can put your work in context and flesh out the audience you think you know so well by their data points. Findings

from brand surveys, usability studies and user testing are likely to be quite illuminating.

Having the right tools for the job can make all the difference:

Like Indiana Jones and his trademark hat, whip and pistol, marketers now have the gear they need to get the job done. You as a marketer now have at your disposal advanced tools and experienced subject matter experts (SMEs) that can perform closed-loop analysis on digital marketing campaigns.

Here are some of the criteria you should be considering when deciding which tools to use or which SMEs to consult:

1. Attribution analysis: When you assign credit for a sale to a campaign, you shouldn’t rely on “last-touch” attribution, which gives full credit to the last channel the consumer used prior to purchase. This approach favors late-funnel campaign elements like search at the expense of the other channels that might have been influential.

Measurement platforms now offer “multi-touch” attribution that takes into account the full range of marketing touch points that lead to conversion. These tools give fractional credit to every element of the media mix by combining probability algorithms and predictive modeling.

Attribution expert Brandon Bethea offers his insight on this platform: “Multi-touch attribution offers a more complete, accurate analysis, and is considered to be the best practice,” says Sq1’s Bethea. “However, last-touch attribution can be useful as a simple, immediate way to analyze incremental lift between a test group and a control group.”

2. Media mix modeling and optimization: Today’s more advanced measurement tools allow marketers to run “what if” scenarios to model how future campaigns might perform if campaign strategists implement specific optimization recommendations.

Models can be used to justify a budget increase for a specific campaign, since they show the incremental return that can come from additional spend. Media mix models can


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also signal when additional investment will not yield additional benefit, and predictive modeling can be used to determine how to maximize yield from a smaller campaign budget.

3. Cross-device measurement: As the average consumer in the U.S. now owns four digital devices and spends 60 hours a week consuming content across devices,3 many are using one device to start their shopping journey and then continuing the process on another. Closed-loop analysis can navigate this complex, circuitous journey for both online and offline sales measurement.

Overcoming the challenges of online-to-offline attribution:

The prospect of activating an online-to-offline attribution program might seem daunting and possibly overwhelming. It’s new territory for marketers, and that’s scary. To make the process as painless as possible, here are some helpful hints:

• Get all your stakeholders on the same page regarding the goals of the program, technology partners and offline matching process methodology.

• Select one primary data partner to align audience indexing reports across your CRM, media targeting, media clicks, website engagement and offline sales transactions. Indexing your audiences against different data sources will result in unnecessary distractions and could impact your campaign optimization.

• Test a variety of messaging and offers to determine which ones will drive more offline sales. Optimize the best-performing offers and determine why the losing versions didn’t perform. When it comes to optimization, analyzing the “losing” ads can tell you as much or more about your customers than the winners.

• You can potentially save some of your budget by optimizing your media inventory through exclusivity and frequency capping. There’s no need to pay premium fees to reach audiences that are already being targeted with lower-cost tactics.

• Shift your optimization efforts to the actual offline sales goal.

• Build custom dashboards that simplify your marketing data and create an engaging story. Use your customer segments as the primary key to connect all of your data sources; this should generate additional insights that drive action and optimization.

Optimizing your investment in offline sales measurement for better ROI:

To ensure your investment in offline sales measurement pays off, you need to adopt a number of best practices. We’ve listed some here to help you get started in the optimization process:

• Phase in your closed-loop measurement gradually across your organization.

• Have your internal stakeholders work closely with external technology partners to share information and ensure everyone is on the same page regarding the goals of the program and offline matching process methodology.

• Ensure digital and traditional database marketing teams engage with each other.

• Make sure goals and compensation are properly aligned and not set at each channel, so budgets can be quickly reallocated based on what’s best for the business; every aspect of the campaign needs to get credit for the overall incremental lift.

• Analyze sales data holistically; don’t look at the impact of digital marketing on just e-commerce or just in-store sales; look at total online and offline sales influenced by digital marketing.

• Ensure key stakeholders understand how data are collected, analyzed and reviewed so they can review the results in context. • Build campaigns that have an experimentation component within them so you can better identify future sources of competitive advantage.


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Making the connection makes your marketing more efficient:

Here’s the bottom line. Brands that cannot connect online activity and purchase data to their online marketing efforts find it a challenge to determine how effective their campaigns have been. In addition, they’re potentially missing opportunities. That’s why it’s vital to analyze the connection between online campaigns and offline sales, so you can gain the insights you need to improve marketing efficiencies at all levels. These insights can be used to tweak the campaign in midstream, or can help you develop strategies for future brand campaigns.

Here are some tips to help you along the way:

1. Determine budget allocation. With a better understandingof which initiatives impact sales, you can make smarter decisions.

2. Tie campaigns to sales, not proxy metrics. Instead of focusing on proxy metrics such as cost-per-acquisition (CPA) or cost-per-click (CPC) targets, you should be looking at what genuinely impacts offline sales so you can improve campaign performance and generate a higher ROI.

3. Identify the most effective conversion routes. With the right data from closed-loop analyses, you can uncover the right opportunities to increase sales lift. Examine the following criteria:

a. Channels — How do search, display, video and mobile compare?

b. Publishers — Which sites perform best?

c. Geography — Which regions respond more favorably to your campaigns?

d. Media — What is the incremental life for better visibility?

e. Content — What messages resonate the most?

f. Frequency — How many impressions are needed to drive action?

g. Bidding — What is the optimal amount to bid on media?

h. Data sources — Which first- and third-party data sources perform best?

i. Time — Over what time frame does the campaign produce the best results? 4. Make smarter media buys. Focus on optimizing campaigns for offline sales impact by investing in better data, media viewability and guaranteed human traffic.

Adopting attribution helps you adapt to the new ecosystem:

Multichannel marketing is the new reality. While it is increasingly fragmented, it does not have to be something to fear. With closed-loop measurement, you have the means at your disposal to attribute offline sales to digital campaigns so you can gain the insights you need to target and optimize efficiently. Confidence comes with knowledge and awareness, and attribution empowers you with data that can help you make the more informed decisions that can help you prove the positive link between online engagement and real-world sales, leading you to achieve greater ROI with each campaign.


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Sources: 1 eMarketer, Digital Ad Spending Worldwide 2012 - 2018, March 2014; 2 McKinsey Quarterly, McKinseyQuarterly.com; 3 Nielsen, U.S. Digital Consumer Report, February 2014; 8 Trends Driving Marketing Attribution Now, Daniel Kehrer, Marketshare for Forbes; Tips For Tackling The Online-Offline Attribution Challenge, Bill Dinan, Marketing Land; 6 Key Lessons For Online-to-Offline Attribution Programs, Brandon Bethea, LiveRamp; 4 Why All The Fuss About Data-Driven Attribution? Casey Carey, Adometry.

About the author Brandon Bethea, Chief Marketing Technologist

Brandon and his team merge the latest technologies in audience targeting, creative testing and digital analytics to optimize conversions across all channels. Having spent the past 13 years focusing on developing and advancing conversion optimization. As Wunderman’s former Global Director of Optimization, he has several years under his belt of building strategic e-commerce platforms to drive global sales. Capitalizing on that experience, Brandon leverages that experience to Sq1’s clients of all sizes. A fervent advocate of behavioral targeting and A/B testing, he believes strongly in methodically proving what motivates consumers to take action. Brandon has proven the value of what he’s learned through helping blue-chip clients such as Verizon, Nokia, Time Warner, Dish Network and our own client roster raise millions in incremental revenue. He has a bachelor’s degree in marketing and holds numerous certifications in website analytics, multivariate testing and predictive analytics.


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Sq1: The Customer Engagement & Conversion Optimization Agency

Sq1 continually engages customers along the entire consumer life cycle and purchase funnel, using conversion optimization to drive higher sales at a lower cost. Our customer-centric approach applies data and analytics to every interaction, helping clients maximize customer profitability and optimize customer experiences. Designed to adapt with our clients’ ever-changing consumer base, we take the guesswork out of marketing.

Our repeatable programs integrate all channels and media to steer consumers along the path to purchase – pre and post– leading to predictive ROI modeling. While traditional conversion optimization measures only one phase of the conversion process, we measure each and every consumer touchpoint to determine the best way to maximize marketing spend. Every single program is viewed as an opportunity to test, learn and optimize. Using multivariate and A/B testing, Sq1 continually scrutinizes a variety of factors, including landing page effectiveness, messaging and targeting methodologies. We take full advantage of the latest in technology, message delivery and measurement.

Our Optimization Science engineers design our programs, focusing on predictive modeling and ROI, and monitor results in real time, making changes to campaigns whenever necessary — all while the campaigns are live. We are a privately held corporation with offices in Dallas, Houston and Portland.

For more information, contact Sq1 at 214-749-1111 or visit www.sq1.com

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Online to Offline


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impact of digital marketing

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