Even as the IAB reported today that Q3 digital advertising revenues were the highest recorded to date, the industry is in the midst of soul searching — if not crisis. A recent analysis from the Association of National Advertisers found that there are billions of dollars of annual online ad fraud in the US. And Google recently released “viewability” research that argues nearly 60 percent of online ad impressions are never seen.
The old metrics (impressions and clicks) are losing credibility amid such findings (calls still have validity). Indeed, xAd found that clicks in a mobile context are a false metric for measuring campaign effectiveness. But what will take the place of these “1.0 metrics” to help marketers determine the efficacy of digital campaigns?
Metrics like “engagement” and “views” will continue to be used. However offline sales and store visits are the metrics of the future. Facebook, Twitter, Google, xAd, PlaceIQ, Placed and a range of others are increasingly reporting them to advertisers. The large majority of consumer purchase transactions happen locally — to the tune of between $3.5 trillion and more than $4 trillion per year in retail alone. Local service business transactions add trillions more.
According to the US Census Bureau, less than 7 percent of US retail transactions happen online. The rest (in-store transactions) have been historically invisible to marketers who have been busy measuring clicks and impressions but missing the real action — offline. In fairness that’s because offline/in-store transactions couldn’t easily be tracked on a per-campaign basis.
Smartphones and the ability to capture location in the real world is what is now making all this possible. For marketers this should be an exciting development. (For privacy advocates, not as much.)
Google had offline store visits on its roadmap for Estimated Total Conversions and today the company is rolling that metric out for AdWords advertisers in the US. Ginny Marvin at Search Engine Land has the full details on the program. Briefly, Google is capturing location data from iPhone and Android users that have location services or location history turned on.
The company can see when users go into stores based on store locations and store-perimeter geofences. There’s reportedly a 30 day window from the ad exposure that will be used to determine whether there’s been a store visit. The sample will then be extrapolated to determine a larger average store visit rate metric.
In its blog post Google says that the program will be rolling out to “eligible advertisers in the US.” Mindful of potential privacy objections the company takes pains to say that this will all be done anonymously and that user information won’t be provided to advertisers:
This feature has been carefully designed to keep data private and secure. We never provide anyone’s actual location to advertisers. Instead, store visits are estimates based on aggregated, anonymized data from a sample set of users that have turned on Location History. This data is then extrapolated to represent the broader population.
Facebook is also focused on being able to deliver these sorts of metrics, and is already doing so for some advertisers. In fact, all major networks and ad platforms will ultimately be compelled to provide some version of these “real-world” metrics. Beyond store visits, in-store purchase data will be linked to online ad exposures through programs like Custom Audiences and CRM systems. We’re entering the era of the closed loop.
In a couple of years we may hear relatively little about CTR and impressions. Future ad metrics will be much more tangible (where possible) and tied to calls, store visits and ultimately offline sales.
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