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Real World Trumps Online in Local Search

stewart-gregg
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What leads people down the purchasing funnel remains one of life’s greatest mysteries. Marketers don’t always agree on whether online activity trumps offline or vice versa. To unravel at least part of the conundrum, my firm commissioned comScore networks to study local search and the impact of offline activity on consumer purchasing.

Some key insights into how consumers respond to local search advertisements rose to the surface. For example, of the 3,000 consumers surveyed, the majority of contacts and follow-on sales result from what people do offline.

Measuring, tracking, and interpreting offline behavior isn’t easy. In fact, the study found that 90 percent of consumers who conducted a local search and made a purchase completed their transaction offline. Only 10 percent of those surveyed made their purchase online.

If marketers only track the success of their local search campaigns via online success metrics (e.g., Web site traffic, click-through rates, online conversions), they are missing out on the true value of their local search advertising. Therefore, it’s important that you track and measure local search efforts for both online and offline activity.

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Source: TMP Directional Marketing/comScore - Study of the Usage and Value of Online and Offline Local Search Sources IYP = Internet Yellow Pages

Online Measurements

Sometimes referred to as “closed loop” or conversion tracking, these efforts enable advertisers to track post-click behavior through to online purchase or desired conversion event (e.g., dealer locator look-up, coupon download, appointment scheduled). Simple analytics tools such as Google Analytics or enterprise-level analytics such as Coremetrics measure post-click behavior with tags on the marketer’s Web site.

Much has been written about Web site analytics and the benefit of conversion tracking. Here's more information you might find valuable: 9 Ways to Make Money on Analytics.

Offline Measurements

According to the TMPDM/comScore study, offline response is broken into two primary methods of contact: consumers surveyed who “walk-in” to follow-up or purchase (40 percent) and those who contact the business by telephone (42 percent). Walk-ins can be tracked by polling or by asking what advertising source was used to select and find the business. This process can be challenging because it relies on a consumer retracing his/her actions, completely reporting them back. Tracking consumers who contact the business via telephone is a much easier task.

Telephone tracking can be accomplished by setting up a dedicated call-tracking line, whereby a unique phone number (local or toll-free) is placed on a Web site or local search advertisement. The ad is suppressed from directory assistance databases, as well as other advertising sources such as Yellow Pages and White Pages. This enables the marketer to cleanly track the exact calls coming from the specific ad campaign.

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Calculating ROI

With call counts in hand, now the marketer can develop return-on-investment (ROI) calculations relating to ad effectiveness. The following is a simple ROI calculation worksheet to help you:

MetricsFormula Description
Number of Leads
Cost per Lead
Total Ad Cost
Sales Conversion Rate
Average Sale
Total Sale Revenue
Profit Margin
Total Profit
10
$1.00
$10.00
25%
$100.00
$250.00
20%
$50.00


Number of Leads * Cost per Lead


(Number of Leads * Sales Conversion Rate) * Avg. Sale

Total Sales Revenue * Profit Margin
Return on Investment5:1Total Profit / Total Ad Cost

Call-Tracking Providers

There are many call-tracking providers with a host of call-tracking line and reporting options: daily, monthly, or other desired frequency. Some leaders in the field include:

In addition to the number of calls, call-tracking lines can also provide other valuable performance information, such as the following:

  • Where the call came from (via area code, zip code) etc.
  • Date and time of day of the calls
  • Length of the call
  • Basic caller ID data (used to match consumers with initial contact through to purchase)

Many of these call-tracking providers have additional services that can match callers to demographic profiles to aid in ad targeting.

As consumers interact with online advertising to shape local purchase decisions, it’s vital to track all forms of ad response, both online and offline. Without these measures, marketers cannot clearly understand advertising performance (ROI) of local search campaign placements. Remember, you can only optimize what you measure, so employ techniques that help you unlock the true performance picture of your online local search advertising efforts.


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