RevTrax, a marketing analytics platform, just released a two-year study on the impact of paid search ads on in-store sales.
The study analyzed consumer purchases that stemmed from a paid search ad. Consumers were presented with an advertisement that, when clicked, led to a printable or mobile landing page displaying a coupon with a unique barcode and online coupon code.
Each unique barcode was tracked back to the search activity that drove the conversion.
The study found that for every $1 of ecommerce revenue generated from the ads, retailers could expect another $6 of in-store revenue.
Some merchants saw a cost of sale as low as 1 percent, with the average cost of sale varying between the 7 and 10 percent range. This will likely vary depending on merchant product category and paid search skill, so as always it’s best to put your toe in the water before investing your whole foot.
Who This Matters to Most
RevTrax noted that this study largely focused on larger retailers with multiple physical stores, but retailers with one or a handful of physical stores might want to experiment with location-based in-store paid search ads to test their effectiveness.
Some Bigger Questions
Like any coupons, margins are a major consideration when embarking on a campaign like this. Larger retailers can more easily justify losing margins as a marketing expense and make up for the loss in increased market share.
One of the biggest question is: how many customers you can convince to shop again, and more importantly, without a coupon the next time around.
The old attitude of “coupons aren’t for me” is slowly dying. Online retailers not thinking out of the box on how to leverage an effective coupon strategy are falling behind.
Other big questions to ask yourself:
- When and how does it make sense to use coupons for your store?
- What types of coupons / warranties / special deals are your competitors doing? Do you think they’re effective? Why or why not?
- What types of coupons would best fit your business and best influence your customers?
Some Coupon Marketing Strategies
- Use a ‘buy 5 get the 6th free’ type card.
- Increase average order volume with a ‘10% off orders over $100’ coupon.
- Bundle a freebie with certain products for a limited time.
A Personal Story
Bottom line for online retailers: Groupon and other social coupon sites have made me more cautious to pay full price for a meal these days. The same threat to retailers remains when more coupons are used to drive sales. Consumers become accustomed to a purchase with a coupon, without one it makes it seem like you, the retailer, are trying to rip me off.
Makes zero sense, but it’s an important psychological mindset that needs to be understood when starting one of these campaigns.
Something that makes less sense: Not trying out this style of marketing if you have physical stores.
Don’t be late to the coupon party, it’s only getting bigger.
Have you done any online / offline paid search tests before? Share your thoughts in the comments.