As I’ve been trying to argue for literally years most online-influenced conversions happen offline. The large majority of consumers now use the internet (on PC and mobile devices) to do research before buying in stores. US government figures still put e-commerce at less than 6% of total US retail.
Online-to-offline (O2O) is a much larger and more important story than e-commerce. There is nearly $2 trillion in this category. Yet it has been little understood or neglected because marketers couldn’t effectively track offline sales, except in isolated circumstances with coupons and calls (to varying degrees).
Google clearly understands this and this morning the company introduced what it’s calling “Estimated Total Conversions” for AdWords. This is an effort to capture cross-device shopping and offline conversions. The new analytics capability will roll out over the next 4 – 6 weeks. However the offline tracking/conversion feature will roll out next year.
Google is using signed-in Google users and extrapolating to the larger population. Google says it does this in a privacy friendly way and won’t provide data unless it has 95% confidence of the accuracy of the projection.
Andy Miller of Google spoke on my mobile search session today at SMX East. He said that he was most excited about in-store or offline tracking. Google is correlating location history and store locations to provide marketers with aggregated data on place visits.
PlaceIQ was the first to create a “place visit rate” metric. Placed recently created panel-based “Placed Attribution” which measures offline store visits after ad exposures. It has been adopted and is being used by xAd, Verve and Millennial Media. Facebook and Twitter are both using various methodologies to try and correlate online ad exposures with real-world conversions.
Regardless of what you think about the accuracy of Google’s methodology or any of the others mentioned, there’s a significant shift going on. Marketers will increasingly be able to connect the dots between online and offline. The significance of clicks and CTR will decline over time.
Online-to-offline tracking is major theme of the upcoming Place Conference, happening next Tuesday in SF. We have a panel called “Ad tracking to the point of sale,” in which we’ll be discussing the subject in detail:
Ad-Tracking to the Point of Sale
Panelists will discuss the current and future use of indoor location as a way to demonstrate ROI and sales lift on a per-campaign basis. What is the current state of the art in matching store visits to ad exposures? And what are the broader implications of connecting online ads and offline data?
Monica Ho, Vice President of Marketing, xAd
David Shim, Founder & CEO, Placed
Ameet Ranadive, Director of Product, Twitter Ads Team
Jeremy Geiger, CEO, Retailigence
Duncan McCall, Co-Founder & CEO, PlaceIQ (moderator)
It will be preceded by a major retail case study from PlaceIQ about measuring store visits after mobile ad exposures. Marketers need to understand how offline and indoor location will impact the entire digital ecosystem and ROI measurement.
Now that Google has put a stake in the ground (offline) it should increase the visibility of the larger online-to-offline phenomenon and add greater urgency to understanding it and where the market is going.