Search marketers who don’t track offline conversions may be underbudgeting their efforts by as much as half.
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 JupiterResearch, finds 47 percent of Internet users who reported researching products online during the 2005 holiday season bought those products at a physical store, by phone, or through some other offline channel.
It’s not that shoppers are uncomfortable using the Internet. Fully 63 percent of respondents said they researched products at online merchant sites, and 62 percent of Internet shoppers used general search engines (such as Google and Yahoo) to research products online.
Despite these comparatively high figures, search marketers who rely entirely on online campaigns and don’t track 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," according to the study’s press release.
Put otherwise, search marketers who don’t track offline conversions may be underbudgeting their efforts by as much as half as they don’t capture an accurate ROI measure related to their search marketing spend.
In addition to this finding, the study also reveals the shopping and comparison search verticals aren’t nearly as popular as general-purpose search engines for product research. Just 26 percent of respondents said they used a comparison shopping service during the holiday season.
This poses an interesting question for search marketers who dedicate significant resources to these specialized shopping services. Though most comparison shopping services offer reasonably good relative values in terms of CPC (define) or other search advertising spend, they may not be as good absolute values as general-purpose search engines.
Bottom line: if you do search marketing and don’t carefully measure and analyze important metrics such as ROI, cost per acquisition and offline conversion rates, you may be misallocating resources and missing 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 their 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.
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In addition to being Associate Editor of ClickZ's sister publication, SearchDay.com, Chris Sherman is a frequent contributor to Online Magazine, EContent, Information Today and other information industry journals. He's written several books, including The McGraw-Hill CD ROM Handbook and The Invisible Web: Uncovering Information Sources Search Engines Can't See, co-authored with Gary Price. Chris has written about search and search engines since 1994, when he developed online searching tutorials for several clients. From 1998 to 2001, he was About.com's Web Search Guide.
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