Searchers Still Like to Buy Offline

A new study says that though a majority of shoppers use the internet to research products, nearly half still prefer to make their purchases through bricks and mortar retailers.

The Post-Holiday Online Shopping Study, sponsored by iProspect and conducted by Jupiter Research, found that 47% of Internet users who reported researching products online during the 2005 holiday season bought those products offline at a physical store, by phone or through some other offline channel.

It’s not that shoppers are uncomfortable using the internet. Fully 63% of survey respondents said that they researched products at online merchant sites, and 62% of Internet shoppers used general search engines (such as Google and Yahoo) when researching products online.

Despite these comparatively high figures, search marketers who are relying entirely on online campaigns and are not tracking offline conversions are likely leaving money on the table. The study concludes that lacking a mechanism to fully measure and track offline conversion, search marketers must “otherwise cede as much as half their online ROI (according to this finding), and possible future budget dollars, to other marketing channels.”

Said another way, search marketers who aren’t tracking offline conversions may be under-budgeting their efforts by as much as half, as they are not capturing an accurate ROI measure related to their search marketing spend.

In addition to this finding, the iProspect Post-Holiday Online Shopping Study also reveals that shopping and comparison search verticals aren’t nearly as popular as general purpose search engines for product research. Just 26% of respondents said they used a comparison shopping service during the holiday season.

This poses an interesting question for search marketers who have dedicated significant resources to these specialized shopping services. While most comparison shopping services offer comparatively good relative values in terms of cost-per-click or other search advertising spend, they may not be as good absolute values as general purpose search engines.

The bottom line is that if you’re doing search marketing and not doing careful measurement and analysis of important metrics such as ROI, cost per acquisition and offline conversion rates, you may be misallocating resources and missing out on significant opportunities.

The report concludes: This finding serves as a wake-up call to all search engine marketers who do not have systems in place to identify the volume of offline conversions generated by their efforts and budget. Search marketers must put such systems in place so that higher ROI can be attributed to their search marketing efforts, and so that as a result, more budget dollars can be devoted to their future search marketing campaigns.

For more details about the study, including methodology and complete results, see the full PDF report.