Google Would Like to Come Shopping With You, Are You Game?
There was a recent announcement in the WSJ (Wall Street Journal) that Google is currently trialing a way to track a customer from their online activity straight through to offline conversion. Google is calling this feature (for now) In-Store Attribution Transaction Reporting and it will be available in AdWords.
With a greater share of the marketing budget being allocated to online channels, we as advertisers want to understand the value of this spend outside of the online environment.
This isn’t a new thing and Google; as well as many other data companies have been working on this for a while.
Before we deep-dive into what this feature means/will do, lets re-address why there is a need for this feature, using a common retail example.
Let’s use a home furnishing example:
Company X is a traditional home furnishing retailer selling large goods and has been around for about 10 years. Company X started off as a traditionally offline retailer and they decided to start trading online two years ago.
Company X has 100 offline retail stores and runs a very profitable business offline. Company X didn’t expect to generate much business online, nevertheless, they set up a fully functional e-commerce website. They didn’t think customers would want to purchase such large goods online as these purchases were deemed personal and customers were more prone to visit offline stores so that they could get a good feel for the products. They were in fact very successful online and converted customers very well.
And then they came up against a problem that many multichannel retailers have. They knew that online sales drove offline sales, as overall revenue and sales were up offline. Another interesting insight was Mobile. Mobile traffic continued to increase and they knew that mobile generated conversions (most likely offline conversions) but at a low ROAS/ROI (again, likely due to most mobile conversions happening offline).
If they couldn’t successfully track online interaction through to offline conversions they weren’t sure that they could make a case for increasing investment internally.
Fast-forward to present-day and this is still a black hole for most marketers with limited ‘discovery’ budgets.
So how does Google aim to fill this black hole?
Well according to the Wall Street Journal, ‘In-Store Attribution Transaction Reporting’ is described as:
“Google’s new pilot program, dubbed In-Store Attribution Transaction Reporting in AdWords, works a bit differently, according to the people familiar with it. When a user clicks on an ad, Google sends an anonymous “click ID” to the advertiser. The advertiser likely has a cookie on the user’s computer, and matches that cookie to the click ID.
Days or weeks later, the user might buy a product in the retailer’s store. The data company and the retailer can take that purchase and link it back to the user’s cookie. Then they match the cookie to Google’s click ID.
Ultimately, Google can tell advertisers which ads generated in-store sales and how much they generated, the people said.”
Source: Wall Street Journal
To put the above announcement by Wall Street Journal into context, it is important to understand how this can work and what pre-requisites need to be in place.
Firstly, in order for Google’s click ID to be attributed to a customer, the store would most likely need to capture the customers email address. Google may have a more ingenious way to linking customers to click ID’s, but for now, let’s go with email addresses (and yes, this may bring up privacy issues). Users also need to be ‘logged-in’ to Google. Non-logged in users will be difficult to track successfully (again, Google may be working on this). Cross-device tracking is the main crux of how this process will be able to successfully attribute conversions, and again, this depends on whether the user is logged-into Google.
I got together with the PPC team (at Make It Rain HQ) to discuss how we think this could all work and what we ended up with was a nifty diagram, see below:
The diagram above depends on the user being logged-into Google. Users that log-into one product such as gmail, YouTube etc, are automatically logged-into other products, as Google log-ins are universal.
Mobile phones must be WiFi enabled as this may be the key route to tracking a customers journey throughout the store. Some stores may have WiFi points in various parts of the store which may be identified based on the department. So the checkout area may be identified as simply “check-out”.
If a user spends sufficient time in each department, as well as the checkout, you can even build a “click path” (we renamed to journey path!) analysis.
Finally, if a customer does eventually checkout at the till, that purchase can then be attributed to the original PPC ad that was clicked in the beginning.
There are many potential data quality issues with this process as mobile is notoriously tricky to match up user journeys to. Mobile application systems work differently to standard computers and the tech industry still has a few tweaks to implement to address these issues, however the above process isn’t impossible.
And now for the pros and cons!
Ultimately, there are many pros for marketers and our clients, with the main ‘pro’ being that you can confidently identify how AdWords as a channel performs for offline sales and how it influences offline sales. This is huge, as it’s a powerful thing to be able to identify how a channel is performing in an increasingly omni-channel world.
You’ll be able to see how your AdWords budget is working and be more agile with budget optimisation.
The cons are that this is only for paid search not other channels – such as organic – however there are other data companies that do have the ability to aid you with offline attribution, but, this can be a costly venture.
The other non-marketing con is the privacy issues that may cause concern with customers/users data. According the wall street journal article referenced above, Google will be using anonymous identifiers, but the way we’ve deconstructed how this will work, surely email must be captured? However once this functionality becomes mainstream, it will open up the doors for greater targeting and even greater retargeting, which may pose the question, how anonymous is anonymous.
If you have anything to add, let me know!