In retailers’ ongoing quest to connect digital to dollars, Google is testing out a way to see whether ads placed online equate to more money spent in-store. After shopping around for a way that would work, Google developed this program with their AdWords advertising program called In-Store Attribution Transaction Reporting. This promising program is enabling a few advertisers to match the anonymous tracking cookies on users’ computers to in-store sales information collected by outside data sources. Basically, it allows advertisers to use their own sales data to measure the impact of their search campaigns on in-store sales. While technology and tracking have made it easy to measure the effectiveness of digital ads with online sales, it has been harder to determine their effect on shoppers’ purchases in physical stores. The Wall Street Journal reported on the method to this marketing measure to explain just what Google has in store.
“Clicks are just the beginning, and everyone knows that there’s more value to tying ads to purchases,” said Benny Arbel, CEO of ad technology firm myThings. “If Google can demonstrate that people did not just click on an ad but that they actually bought something, that is the Holy Grail.”
Google tapped top data providers like DataLogix and Acxiom, along with data handlers LiveRamp and the Epsilon unit of Alliance Data Systems, to participate in this program. These companies regularly access and amass an abundance of Americans’ personal purchasing information through marketing programs and customer loyalty cards.
No one knows online advertising like Google, which earned $50.5 billion in ad revenue last year to remain the leader in this $117 billion-a-year industry. Yet Google is not the first to try connecting online behavior to in-store buying.
Since late 2012, Facebook has been tapping physical-store sales data to display the effectiveness of advertising on the social media site. Facebook also partners with Datalogix and Epsilon to collect the names, addresses, email addresses, and in-store purchase histories of millions of consumers on billions of dollars in purchases.
In an effort to protect personal privacy, Facebook and Datalogix do not share any of their data directly and actually use an algorithm to scramble this data into random numbers.
Once Facebook has those anonymous profiles, their program divides them into two groups of users and only shows ads to one of the groups. Then data companies interpret this information to determine whether the group that viewed the ads purchased more of the products advertised.
This program has proven successful for Facebook and its advertising clients. One study showed that Bud Light increased sales by 3.3% to generate a six-fold return on the cost of their campaign.
While Facebook’s program shares some similarities with Google’s trial, the inner workings are distinctly different.
With In-Store Attribution Transaction Reporting in AdWords, Google sends an anonymous ‘click ID’ to the advertiser when a user clicks on their ad. The advertiser usually has a cookie on that user’s computer, so they are able to match that cookie to the ‘click ID.’ If that user purchases a product from the ad in a retail store later on, that purchase is linked back to the user’s cookie and matched to their ‘click ID’ by the data company. Throughout the process, the user’s identity remains private and protected. The final result is that Google is able to tell advertisers which of their online ads led to in-store sales and exactly how much money they generated.
While Google is only testing the program for now, its effectiveness could lead more retailers and advertisers to place their dollars into digital.
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