The "Hidden Return" Of Online Advertising

We all know that online advertising benefits from being measurable and that it’s returns are often better than offline advertising. But the one thing we have not been able to measure is the offline impact of online advertising. I have frequently cited a comscore study from years ago that showed that >80% of transactions initiated with online search were transacted offline.

Now we have a new study from comscore, which is outlined in the Harvard Business Review. It’s even better than that.

A recent study we conducted for a retailer with more than $15
billion in annual revenues—the vast majority of which come from its
physical stores—had notable results. Over a three-month period, U.S.
sales increased by 40% online and by 50% off-line among people exposed
to an online search- and display-ad holiday campaign promoting the
entire company. Because its baseline sales volumes are greater in
physical stores than on the internet, this retailer derived a great
deal more revenue benefit off-line than the percentages suggest. Even
in terms of raw increases, though, online ads had a bigger impact on
off-line than on online sales in a majority of our studies.

So when you buy advertising online that is generating a positive ROI just based on online conversion, you are likely to be getting an even better ROI that you think you are. It would be great to have some kind of closed loop tracking of the offline purchase activity. Maybe with mobile payments, we can get there.

#VC & Technology