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.