More and more of our attention is being spent online. Adults now spend nearly five hours a day with digital media, twice the time we spent online just 10 years ago. Since the goal of advertising is to attract some of that attention, ad spending has been moving steadily from traditional media to digital media since it emerged in the mid-90s. In fact, in 2019 digital ad spending eclipsed traditional media spending for the first time.
But even though more and more of our time is spent online, over 90% of retail transactions still take place in brick-and-mortar businesses. So if you’re a traditional retailer buying online advertising to attract customers, a certain amount of faith is required because there has not been a way to connect digital ad spend to foot traffic.
Online behavior doesn’t predict in-store results
Most digital advertising targets broad audiences that are just approximations of real customers. Retailers rely on online signals, page likes and clicks, to build their target audiences. If your business can be transacted online, that’s not a problem because you can follow the customer journey from initial contact to purchase.
For offline businesses, like retailers and restaurants, these signals can be misleading. And they don’t produce the most effective target audiences. You can easily end up with an audience that is interested enough in your content to click, but won’t show up in person. Unless you can measure the final step, you never really know what happened.
Zenreach tracked the in-store results from millions of online ad impressions during the fourth quarter of 2018. The results displayed in the chart below show that conversion from online impression to online engagement was reasonably predictable based on targeting. Consider males younger than 35 (represented in the chart by the lighter shade of grey). This group represented 59% of online impressions and 55% took online action. But this group converted to in-store visits at a much lower rate—just 25% actually visited the advertiser’s business, a conversion rate of just 0.16%. Males over 35 converted at more than 4x that rate, or 0.66%.
Parsing target segments into smaller groups, there were even more dramatic differences in performance. Again, all segments converted from online ad exposure to online action at reasonably consistent rates. But conversion to store visits was strikingly different across segments. Adults 35-44 converted to store visits at a rate of 0.70%, while adults 18-24 converted at just 0.06%, a difference of 12x.
Optimizing for the wrong outcome
The challenge for advertisers with brick-and-mortar businesses is that there has simply been no way to connect their online advertising with in-store results. They were forced to optimize their advertising for clicks, a result they assumed would translate into a store visit.
But as we’ve shown above, digital measures of success are not a reliable way to judge performance. By measuring success and optimizing ad spending for digital engagement rather than in-store visits, advertisers are relying on a misleading signal that often results in wasteful decisions about targeting and creative strategy.
Focusing spend on higher performing segments based on profiles of your actual customers can result in a dramatic increase in customer visits with the same budget. Understanding in-store performance plays a crucial role in informing creative strategy, execution or promotional offers.
Measure for real success
Connecting online advertising with offline results is surprisingly hard. The most common approaches are panel research and GPS location data. Panel research, based on consumer surveys that ask respondents about recent behavior, is directional at best. Methods based on GPS data can be effective, but require significant scale, expense and time that make them impractical for most advertisers and applications.
Walk-Through Marketing, on the other hand, has provided us with a technology that can accurately measure the results of a digital ad at any scale. This is because Walk-Through data is based on customer visit behavior that is recorded using location-based WiFi access points. WiFi-enabled mobile devices search for accessible WiFi networks every 30 seconds. Access points are able to detect these unique signals and record signal strength, duration and the unique MAC address of the device.
Zenreach has built a network of over 44 million customers and counting. For the first time, this allows location-specific store visits to be recorded at any scale and attributed directly to online advertising exposure.
By understanding who comes into your store and how often, you’ll be able to build higher-performing ad audiences and measure the results you’re looking for—in-store visits.