iProspect director of algorithmic search discusses measuring offline conversions through online lead generation and branding.

Enough was enough. It was time to buy a new DVD player. I grabbed my laptop and typed "DVD player" into Google. My search sent me to Amazon's DVD player offerings. Amazon was a great resource that quickly helped me hone in on one DVD player. But there was a problem; I'm an impatient person. I wanted it now. Pronto. Immediately. Obviously I needed to buy the player locally. My neighborhood Tweeter store came to mind. I typed "Tweeter" into Google, instantly found its website, and saw that they carried the model. Later that night, I went to the store, made the purchase, and drove home with my new DVD player. Mission accomplished.

Why Bad Things Happen to Good Marketers
But what's wrong with this picture? Two websites helped me purchase my new DVD player, yet neither received credit for it. Despite providing all the information to help me choose a product, Amazon didn't even make it into my top choices of retail stores (given its web-only presence). And while Tweeter certainly benefited from my gotta-have-it-now mood, at the same time, their online marketers can't prove that they closed the deal, and they'll never know the retail store revenue that was influenced by the website, unless... proper tracking mechanisms are put in place.

Why You Should Care
Do you know your true online ROI? What if your ROI was 100 percent greater than you thought? Are you measuring your online-influenced offline sales to accurately measure the ROI of your online campaign? (Chances are, some of your competitors do.) Careful measurement could bring you additional marketing dollars. How so? If you are focusing only on your online revenue, you could be optimizing your marketing budget for the wrong products. 

Most high-ticket items are sold offline, and by ignoring those items, you may not necessarily be optimizing overall revenue for the organization. By measuring or estimating your offline revenue generated by the online channel, you can optimize your product portfolio in a holistic manner. As observed by comScore, certain industries, such as video games & consoles, toys & hobbies, and consumer electronics, have higher offline conversions than others. Let's take a look at how to get the job done.

How-To Know How
The first step in measurement is to set-up a web analytics program so that all the visits to the website from different online channels such as search, banner ads, and email marketing can be measured in terms of online revenue. There is an abundance of information available on how to measure the ROI of an online channel, so we will focus on measuring offline ROI from online influence using several techniques. The techniques for measuring offline conversions depend on the purpose of the website: ecommerce, lead generation, and branding. Each type of website can rely on a combination of techniques to determine the online influence on offline revenue. The following list covers most of the common techniques-- some exact and some approximate.

Call Tracking:
Set up unique phone numbers on your website so that you can track all the inbound telephone leads and orders influenced by your site. You can even set up different phone numbers based on the channel through which one arrived at the website, such as organic search, paid search, and banner ads.

Coupons:
Offer online coupons with tracking codes that can be printed and presented at retail outlets to get discounts on purchases.

Store Locator Pages:
Start measuring the number of people visiting different store locator pages and measure the relationship with sales at those stores.
 
Printable Order Forms:
Provide an option to create an order form from the user's shopping cart, containing a tracking code, which can be either mailed or faxed.

Lead Generation Forms:
Reconcile offline conversions with contact information obtained from contact forms on your website.

Geographic Targeting:
Find the correlation between geographic location of website visitors and offline store sales.

Surveys - Point of Sale:
Conduct surveys at multiple points of sale on the role of your website in the purchase decision.

Surveys - Online:
Randomly conduct a survey of a small fraction of visitors to your website on their purchasing patterns.You can even tailor the surveys based on the actions taken by the visitors.

Surveys - Panel Based:
Work with panel-based companies such as comScore and Nielsen to conduct surveys with users who visit your website or take certain actions on your site.

Live Chat:
Provide customer service through online chat which can be used to find the role of the website in offline conversions.

Focus Groups:
Use focus groups to understand the function of your website in the shopping process.

A/B Testing:
You can conduct A/B testing by either increasing or decreasing the online campaign level, for certain geographic regions or products, to study the impact on the offline revenue generation.

Multivariate Regression Modeling:
One other alternative is to build marketing econometric models that help you understand the complexity of various interacting factors that can play a role in the revenue.

What it All Means
Once you've employed some of measurement techniques, your next step is to study the proportion of offline revenue generated by online channels in your industry, and put measures in place to estimate the impact of your own campaign. If you can demonstrate a higher ROI than you are currently reporting, you can certainly make a strong case for increasing your marketing budget. Web-only merchants such as Amazon will stand to loose revenue from no offline presence. Brick and mortar companies with an online presence will certainly benefit by offering multiple points of sale to consumers. The online marketing managers of such companies need to measure the offline revenue generated by their marketing campaigns in order to effectively optimize their campaigns.

Accomplishing the Mission
Everyone knows that a connection between online and offline exists, but few are taking the time to measure the effects. Now you have the tools to get started. Clearly, the online channel is an integral part of a successful marketing campaign. Measuring its true ROI will only benefit your organization and allow you to make better informed marketing decisions.  The mission is possible; you just need to make it happen.

Naga Krothapalli, Ph.D., is director of algorithmic search at iProspect. Read full bio here.