Yahoo!’s Retail Solution Drives Customers to the StorePublished: January 2011 | By Yahoo!
Some
consumers only shop online, rarely setting foot inside a store. Others
still like to touch purchases before they buy. Both groups, however,
have something in common: They use the Internet. However, up until
recently, retailers could only track the e-commerce impact of their
online advertising programs—which represents less than ten percent of
total sales.
Enter Yahoo!. Our ability to quantify cross-channel
influence offers new insights and much stronger results to retailers’
digital efforts. Using Yahoo!’s retail display solution, one national
retailer was able to use a single, two-week display ad campaign to drive
both in-store and online sales. Combining custom audience targeting,
multiple creative treatments, and both in-store and online sales
measurement, this campaign rang up revenue of five times what was spent
on the ads themselves.
The Challenge
Today’s
consumers are cross-channel shoppers, but when it comes to making a
purchase from national retailers, research shows that they primarily buy
in-store: While 89% of shoppers research online before buying (source:
BIG Research), only 7% of retail sales are online (source: Forrester
State of Retailing Online).
Additionally, many digital marketing
campaigns struggle to measure the in-store sales impact from online ad
impressions. When Ms. Shopper brings that dress or perfume to the
check-out counter, how does a retailer pinpoint whether its online
marketing contributed to that purchase? And how can those learnings be
implemented to make future campaigns even more effective?
A
Yahoo! national retail client, one of the five largest department stores
in the U.S., faced these and other issues, including how to better
target likely shoppers in close proximity to its stores, how to
effectively target its current customers, and at what point the
frequency of its online ads might cause “message burnout.”
The Solution
Yahoo!’s
experience has shown that retail chains achieve the highest
return-on-ad-spend when our display solution includes custom audience
targeting combined with multiple creative treatments and measurement of
resulting sales from both online and in-store channels. The two-week
campaign for our department store client incorporated all three
elements, and targeted the retailer’s current customers, reaching 90% of
those who visited Yahoo! during that fortnight.
Two different
campaigns with a total of four creatives were tested, and consumers saw
the ads, on average, about twice a day. To better understand the
incremental business impact of the campaign, one-third of possible
impressions were held in a control group and exposed to a house Yahoo!
ad instead of the retailer’s.
The Results
In-store and online sales were measured during the campaign and two weeks following its conclusion, with these results:
- Yahoo!’s retail display solution generated more than five times return-on-ad-spend.
- 75% of the total return was generated by in-store purchases.
- Customers who live within two miles of one of the retailer’s stores represented 10.6% of the audience seeing the ads, but generated 56% of the program’s revenue.
- Return-on-ad-spend was four times spend for customers living within five miles of a store, and 21 times spend for customers living within two miles of a store.
During the campaign, Yahoo! tested a “half treatment” versus a “full treatment,” with a sub-group seeing half as many ads in the two-week period. Rather than inducing wear-out or ad fatigue among consumers, higher frequency levels played an important role in increasing the campaign’s return: 34 impressions per user were 47% more effective than 17 impressions in getting customers to click at least once on the ads.
Our department store client was extremely pleased with the results. The company’s Director of Advertising commented: “While the insight of ROAS based on customers’ geographic proximity to our stores is somewhat intuitive, we had no idea how powerful it could be. We definitely need to act on this information now.”
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