Search & the Offline Buying Connection

The most quoted -- yet least understood -- data in internet advertising relates to over 90 percent of online influenced purchases occurring offline. Every marketer is trying to unlock the offline buying decision safe and attempting to assign a true (or effective) value to online media investments.

A variety of tools can be used to measure the impact on online advertising on offline sales. Call tracking, print, consumer incentives and in-store pickups are all effective tools for quantifying the online advertising investment-- if you know how to use them.

Few understand the connection between online and offline purchase behavior, but most at this point know that search is critical part of the equation. New research from Hall and Partners commissioned by Yahoo! and the Consumer Electronics Association (CEA) sheds a bit more light on the buying decision process in the category. There are big changes occurring.

Tackling the consumer electronics category
comScore's December 2004 study on the impact of search and buying behavior is considered the seminal research report on the subject. Using a combination of panel-based observational data and surveys, the report's conclusion estimated that 92 percent of consumer electronics purchases that followed a search occurred offline.

Over 90 percent makes perfect sense, since electronics are considered purchases and one must look and feel before buying. That 90 percent number became a very popular data point in industry trade show discussions from keynotes to panels and is still tossed around today-- almost two years later.

In March 2006, comScore released another report that estimated 84 percent of consumer electronics buyers converted offline. In just over a year online purchases increased about 8 percent.

The times they are a changin'
The latest round of research from Hall and Partners concludes that 71 percent of consumer electronics purchases were made offline, and nearly 75 percent of offline purchases were researched online.

Of course, two different research projects with two different methodologies will produce decidedly different results. Hall and Partners conducted 25 minute interviews of 2,478 consumers who intended to purchase and 1,840 consumers that actually made a purchase.

Comparing comScore's cast of millions with observational data to the interview sample of thousands may seem a bit of a stretch, but there is some common ground to be found. 

What's happening with buying behavior?
Early studies from the likes of comScore taught marketers the importance of influencing buyers early in the purchase process with search engine advertising. That is, while product or brand specific terms show very high direct conversion returns, advertisers must purchase generic search terms to be "considered" in the purchase process at all.

The Hall and Partners study indicated that the fantasy world of brand love and subsequent product influence might actually exist. Consumers visiting brand sites showed a nine point lift in considering the brand and a seven point lift in brand perception compared to visiting retailer sites.

The latter portion of that revelation should be common knowledge to any brand marketer, but it never hurts to point out the painfully obvious in the advertising industry. It should also be very clear that the rate of purchase of considered items like electronics is increasing rapidly. 

How NOT to miss the boat
Marketers must wrap their arms around the relationship between purchase funnel and search engine advertising, this much we know. We should also know that purchase behavior is being influenced by advances in technology such as better product representation and information online.

Anecdotally, in trying to ascertain the reason for increased purchase behavior, we can point to the explosion of user-generated content and social media. Consumers are relying upon reviews of merchandise and recommendations from other consumers now more than ever.

In addition to retailer-based community venues, product reviews provide valuable information (whether credible or not) that users perceive as word of mouth recommendations.

In the end, the real gold mine in expanded user information and community-based information is the wealth of keyword-rich content it provides. Studying site analytics for referring keywords and scrutinizing user provided information helps you locate hard to find low volume, high purchase rate, low cost "long tail" keywords that allow consumers to find you on their own… well, terms.

Additional Resources:

User Reviews Affect Buying-- and Search

iMedia Search Editor Kevin Ryan is the Chief Executive Officer of Kinetic Results. Read full bio.

Meet Kevin Ryan at ad:tech New York.

 

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