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Jul 28, 2008

Consider Both Sales Lift and Reach When Using Online Advertising to Grow Offline Sales

Consider Both Sales Lift and Reach When Using Online Advertising to Grow Offline Sales

Last week, I gave a keynote address at the 4th Annual ShopLocal Summit. ShopLocal.com is a multi-channel marketplace that houses online and offline retailer promo information. With an increasing number of retailers turning to ShopLocal.com, it has become increasingly important for retailers to not only understand the online marketplace but also how online marketing can help increase offline sales.

During my presentation, I shared some results from recent comScore studies that gauged the impact of online advertising on in-store sales. Using the comScore panel, offline sales impact can be measured by linking panelists’ exposure to online ads with their in-store buying (through the use of retailers’ loyalty card data). Lift is computed by comparing the offline buying of consumers who had been exposed to an online ad campaign with the buying of those who had not been exposed to the campaign.

We’ve seen some very interesting findings that I’d like to take a moment to discuss:

#1. Search advertising provides higher sales lift than display advertising, but when combined, the synergy provides the highest lift…

When comparing the offline sales impact among consumers exposed to ‘search advertising only’ with the impact among consumers exposed to ‘display advertising only’, search holds a clear advantage, with an 82-point lift in offline sales compared to a lower 18 percent increase among consumers exposed only to display advertising. This is because the people who get exposed to a search ad are much more likely to be “in the market” for the brand/category being advertised and as a result, a search ad will drive more offline buying than a display ad. But, what’s especially important to notice here is that exposure to both search and display ads provides the highest lift (119-points over the control), which is even greater than the sum of the two tactics alone.

Synergy of Search and Display - this chart may be viewed at www.comscore.com/blog

#2. While search advertising results in a higher sales lift than display advertising among the people exposed to the ads, the number of people reached by display advertising is typically markedly higher than the number of people reached by search advertising …

When we look specifically at the total number of consumers exposed to ‘search advertising only’ versus ‘display advertising only’, we see that display ads typically provide the greatest reach by a long shot. Search advertising – which generates an impressive sales lift – typically reaches a much smaller percentage of consumers.

Reach by Type of Advertising - this chart may be viewed at www.comscore.com/blog

Key Takeaway: So what do these findings tell us?

Based on the research we’ve conducted at comScore, it’s clear that the use of online advertising is a terrific way to grow retail sales. But, what’s also apparent is that media planners need to consider both sales lift and reach when designing online search and display ad campaigns that are intended to drive offline sales. While search advertising generates a much greater sales lift among the consumers it reaches, the far broader reach of display advertising can more than compensate for display ads’ lower sales impact. Smart media planners will carefully mix their use of both types of online advertising so as to optimize the return from their investment in online marketing.

I’m interested in hearing your thoughts on the above and getting a discussion going online…Please let me know what you think about these findings via the comments link below.

Ed: To simplify, those who have the retailer's loyalty card and search online for the retailer - buy more. Further, if they see display ads for the retailer, they are reminded to buy. What am I missing?

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