Sunday, February 8, 2009

Multi-channel measurement - a real life example

Couple weeks ago I had fun speaking about search engine marketing in two different events. A workshop hosted by Naviatech and a fully booked networking session (135 attendees) with Helsinki Chamber of Commerce. In our event I promised to write about multi-channel measurement so here it is. In this post you find these individual parts:

How to measure TV ad performance?
Measuring online sales based on TV ad
Options how to measure offline sales?
How to do retention after offline sales?

I got a pretty good view how SEM things are in Finland at the moment. Unfortunately many people think that search engine marketing equals as paid search. Optimizing natural search result is used as well, but still there is a long way to a holistic planning of search engine marketing strategies. You can download my presentation from here (pdf file in Finnish, 18 MB). Don't hesitate to contact me if you have any questions.


How to measure TV ad performance?

I got a really good eye opener during the holidays when I was staying with my wonderful parents in Joensuu. My dad was finally considering a flat screen TV and of course, I encouraged him to spend some. He saw a very tempting Samsung offer in a TV ad.

There was a simple URL: www.gigantti.fi guiding my dad directly to their website. There is no way how Gigantti can know how many visitors they got based on that TV ad. Instead, if they use a custom domain e.g. www.buysamsung.fi and redirecting this address to final destination with tags, they can measure how many of potential TV ad viewers actually reacted. This is the most accurate way of measuring offline campaigns in general. You can also use sub-domains like http://samsung.gigantti.fi or sub directory like www.gigantti.fi/samsung

Gigantti is using Omniture SiteCatalyst as we speak so there shouldn't be any problem with the web analytics system. Still, if you're using free Google Analytics, you can build your final URLs with this simple tool. So, if you want to know and learn how your TV ads are performing, consult your IT department how to redirect the URL addresses you want to use. It shouldn't be too complicated (301 redirect). One key performance indicator for your TV ad is:
Click through rate (CTR) = number of visits based on a TV ad divided by potential number of TV viewers (gross/net)
My dad got more information about the product from Gigantti's website. I told him to make a simple Google search with the product name and code just to make sure it's really the best price you can get and indeed, it was. Daddy had two options:
A) buy online and wait for the delivery couple days
B) go to store and get the TV immediately


Measuring online sales based on TV ad

With version A, measuring the actual sales based on TV ad is quite easy to do. Therefor Gigantti's other TV campaign KPIs could be:
Conversion rate = number of orders divided by visits based on the TV ad

Online sales = amount of euros achieved by the TV ad in online store

Return on ad spent (ROAS) = online sales achieved by the TV ad divided by costs of the media

Return on investment (ROI) = online sales achieved by the TV ad - all TV campaign costs divided by all TV campaign costs

Options how to measure offline sales?

With version B, it's little bit harder, but not impossible, to measure the sales effect. You could use:
  • printable discount coupons (with bar code) in website
  • mobile discount coupons/code from website by SMS
  • registration to a member/customer club + bonus card

Measuring offline sales base on TV ad

Based on these options, you can create and analyze more KPIs:

Conversion rate = number of pre-defined actions divided by visits based on the TV ad

Conversion rate = number of purchases in offline stores divided by visits based on the TV ad

Offline sales = amount of euros achieved by the TV ad in offline stores

Return on ad spent (ROAS) = offline sales achieved by the TV ad divided by costs of the media

Return on investment (ROI) = offline sales achieved by the TV ad minus all TV campaign costs divided by all TV campaign costs

Return on ad spent (ROAS) = total sales (online + offline) achieved by the TV ad divided by costs of the media

Return on investment (ROI) = total sales (online + offline) achieved by the TV ad minus all TV campaign costs divided by all TV campaign costs

My dad was eager to get the machine and didn't want to wait. So he checked the availability through Gigantti's website which claimed that there wasn't any of those TVs in a Joensuu store. Well, my dad can be stubborn sometimes (if you ask my wife it's inherited) and he went to that store to confirm that.


How to do retention after offline sales?

And then he came back with the TV and Gigantti's marketing department or sales people don't have a clue why or where this customer came from. And bonus tip: they don't know how to reach this customer again! They should try to collect feedback (voice of customer, VOC) or get newsletter subsciptions or member club registrations!

In this case the customer experience started from offline, went to online and back to offline. I think Gigantti should hire me as a consultant, what do you think? : ) Feel free to send me any feedback or questions you may have.

10 comments:

  1. This comment has been removed by a blog administrator.

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  2. Do you think using the custom url for a specific tv ad is a problem if it's a well known brand like Gigantti? People might just remember the store and write gigantti.com instead of gigantti.com/offer...

    Stubborn, who? You? Noooo...

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  3. Terhi,

    if they use sub directory like gigantti.fi/samsung and some visitors go to straight to gigantti.fi, they should have a back-up plan for that. I mean they could place a banner related to TV ad in the frontpage and measure this banner's click throug rate (CTR) for example. Then you can learn how well people remember those kind of URLs and you don't have a problem.

    If your brand is strong enough, I don't see a problem using now and then a custom domain like www.buysamsung.fi - in that case, you may loose some (I'm not sure what?), but you defenitely get very valuable data for evaluating your TV ad ROI. But if you're just afraid of trying something new...

    And sys, by the way, we have same genes. Stubborn may sound little bit negative so we can use determined instead... : )

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  4. According to IAB:
    - 57% of people performed an online search after watching TV ad.
    - 21% of people have made a purchase online as a result for a TV ad.

    These are quite big %, so offering a short, memorable unique url (xxx.com) and tagging strategic TV ad keywords to ones WA system gives very good detail how your TV ad is working.

    More importantly, by doing this, it gives a good idea what is ones ROI on TV ad campaings or other offline channels used in multichannel marketing campaign.

    Especially if ones TV campaign is not a brand campaign, yet instead of tacktical campaign, there should not be any reason why not to use unique url in TV ad? (Everybody is using url´s in TV ads, so why not use, short memorable unique ones, in order to get marketing insights? / Unique urls are better than sub domains, because sub domains gets shorten down easily)

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  5. Good stuff, but I do have to disagree with that domain idea. Having a different domain just for the sake of better measurement is not a good idea. It might be a good tactical solution, but in the long run Gigantti wants people to remember them as their short list candidate even though they have not seen a tv ad.

    Using www.gigantti.fi/samsung url address in ad would be my preferred choice. That url should also point users to a targeted landing page, but not to a strict campaign page. After all Gigantti is a store which sells a lot of things. Amazon does not advertise individual books, nor build custom landing pages for individual books. Gigantti shouldn't either.

    Using custom domains for the sake of measurent, or the sake of having an individual ad work better, is not as bad as building a custom site, but it is in the same league from my point of view.

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  6. Very good comments Tomi and Perttu, thank you. Maybe we can continue this debate at the next Web Analytics Wednesday in Helsinki. : )

    I'm not saying that brand owners should always and all the time use custom domain names. If you're building your brand, it might not be a good idea to rape your company name in the first place. In this case you still have to analyze visits and drill down to hourly level if your TV ad is on the air at certain time. Perhaps you can use standard deviation as Steve pointed out. But still, you can't know exactly which visitors came after they saw the TV ad.

    Later on, when you have a strong brand like Gigantti, you can use custom domains or sub directories to know what is the exact effect on the TV ad. Would it be bad thing to build also product brands so people could associate buying Samsung and Gigantti? : )

    Basicly, my point is that you should use different kind of methods to measure all tactical advertising and to learn how your customer react and behave cross channels. And, as Tomi said, you have to ensure that you're also on top of search results if people start navigating with the Google search box.

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  7. Good discussion and good points put across.

    I agree that in brand advertising, it is good to use brand urls. Usually brand advertising goals are strategic, more image and awareness related goals: better Top-Of-Mind, better awareneress, better brand- and corporate images. These strategical brand goals can be measured with traditional market research studies, such as ad recall- and awareness research studies.

    When it comes down the tactical side of advertising, usually the goals are more product-, service- and sales related goals. Then it is important to measure, with different methods, how different messages in different channels works. Here, one good measurement method is using unique urls combined with other different measurements and data sources.

    In the end of the day the most important thing is to find suitable channels and messages to fith target audience needs. Relevant marketing, through relevant channels to the needs of users and customers is important.

    And how to know what channels and messages works best bringing in those goal conversions; measure, test, research.

    There is actually few good books around multichannel marketing measurement. One is Akin Arikan´s http://www.multichannelmetrics.com/
    Multichannel Marketing: Metrics and methods for On and Offline.

    See you in next Web Analytics Wednesday in Helsinki!

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  8. Great discussion there back in February on measuring the impact of TV advertising.

    Doesn't seem like there is a single ideal solution that does it all.

    Microsite is most accurate but not so good for the brand.

    Convenience URL is more loyal to brand but less accurate.

    One can get an exact answer for a panel of volunteers that participate in measurement of their TV consumption AND their web browsing behavior. But then the panel is also not ideal since a.) it becomes inaccurate for extrapolation to the rest of the population, b.) it doesn't lend itself to the kind of direct marketing that Petri is encouraging.

    One more idea is to seek registration online, e.g. Petri's dad registers with his name / cookie. Later on the same name shows up in the point of sales transactions for purchasing a TV. So you can match back and give credit to the preceding online activity. This is what direct marketing software does well but no web analytics solution does this on its own. Still, Best Buy (big box electronics retailer in US) says that only a fraction of their online traffic is logged in. So this method isn't a catch all either.

    Since none of the methods cam deliver everything, I suppose the business has to sit down and ponder what it is that they most want for business outcomes and then pick the method that works for that.

    Great discussion to witness! Thank you

    Akin
    Multichannelmetrics.com

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  9. Thank you Akin for your professional comments. You are truly a pioneer in this area!

    To sum this up, I think there are plenty of ways to start tracking and learning customer experiences in multiple channels and cross channels.

    More often customer do marketing / measuring like they have always done it and they are scared or just lazy to change something.

    "Companies don't die because they do wrong things. They die because they keep on doing same things same way." (Mikko Kosonen, Fast Strategy)

    Like Akin said, company has to sit down and plan whether to get all possible data which costs fortune or start with small steps and prove better understanding and ROI.

    Thanks again, great conversation!

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