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Search Leads to Offline Conversions Too

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While many search marketers design their campaigns to maximize online sales, recent research emphasizes the importance of taking offline conversions into account when building online search and advertising campaigns.

Two recent studies from comScore, one commissioned by Yahoo and another by local search agency TMP Directional Marketing, examine the impact that online advertising, including search, have on offline sales. While none of the data is especially surprising, it does show once again that search marketers should consider the impact of offline conversions.

The Yahoo-commissioned study looked at shopping behavior of 175,000 comScore panelists from April 2006 to January 2007. It compared the purchasing behavior of those exposed to online advertising with the behavior of those who were not exposed, but who were otherwise behaviorally and demographically identical, looking at in-store purchases at five major retail stores.

The study showed that consumers exposed to online search and display advertising are more likely to 'pre-shop' online prior to purchase, and this behavior ultimately leads to increased in-store sales. These 'pre-shoppers' spend an average of 41 percent more in-store when compared to consumers not exposed to online advertising.

It also found that users exposed to search and/or display ads were more engaged, viewing an average of six more pages during their research. Those exposed to both search and display ads were most engaged, and spent more in-store, on average.

In the TMPDM-commissioned study, comScore surveyed 3,000 consumers to learn more about their local searching behavior. The study found that 82 percent of local searchers follow up offline via an in-store visit, phone call, or purchase. Of these, 61 percent made purchases.

The importance of optimizing local search results is underscored by the finding that 60 percent of searchers online looking for local businesses think that the top results are most relevant, and 25 percent don't want to scroll down on the page to see more results.

The study also found an interplay between online and offline ads. Between 60 percent and 90 percent of searches for heavily advertised categories – such as pizza, insurance, banks and financial institutions – were branded. Meanwhile, 30 percent to 50 percent of keyword searches for low-branded categories – such as auto and home services – were general in nature, showing that traditional advertising triggers branded online searches.

Surprisingly, 33 percent of all consumers still consider print yellow pages as their primary source of local business info. That may either be an indictment of the current low quality of local search, or an indication that local search providers have not conveyed their value to general searchers.

Other researchers have come up with similar findings, including an Accenture report which found that 67 percent of survey respondents prefer to make purchases in physical stores while 69 percent research product features online and 68 percent compare prices online.

In addition, recent research from The Kelsey Group indicates that with purchases over $500, where the Internet is the starting point, over 90 percent of the transactions finish offline. And comScore reported last year that 63 percent of search-related purchases happen offline; while the U.S. Census Bureau reports that e-commerce represents only 2.5 percent of U.S. retail spending.

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