IMPACT: Measuring the effect of online advertising on offline sales

05/12/2016
Blog posted by George Hopkinson
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George Hopkinson, Senior Research Manager, IAB UK looks at the results from our latest research – IMPACT.

See the research here

What does ‘A Christmas Carol’ and digital advertising measurement have in common? On the surface, not that much, but bear with me dear reader…

“Why hasn’t my campaign delivered a higher click-through rate?” used to be the bah humbugging equivalent in digital advertising. Because we could measure clicks, we did and we did so in force. As a result, despite the benefits these insights gave us we developed a bit of tunnel vision when it came to measuring what was really important. Fast forward past some technological advances and some late-night, ghostly premonitions from our industry experts and we stopped bah humbugging and started asking a different question… 

“Did my campaign actually deliver any sales?” 

Unfortunately, all too often in marketing we find this question difficult to answer. Especially if the sales we’re interested in measuring are some of the 83.1% of UK retail sales that will happen offline, in an actual shop (emarketer, June 2016). That’s why, at the IAB, we’re really excited to launch IMPACT, research designed specifically to measure the impact of online advertising on offline sales.

At the IAB we believe that digital is the smartest form of advertising to reach and wow audiences. Part of being smart is understanding what impact your advertising had on those that saw it. There is obvious use in better understanding how digital impacts sales in the real world. Digital has always enjoyed a relatively high level of accountability. As soon as advertisers started tagging their online checkout pages they were able to tie back sales to those who clicked on their ads. The ability to measure a cost-per-acquisition for a campaign helped answer – “What did my campaign sell?”, “Which adverts did the selling”, “Did I return a short-term profit?” This was all well and good if you were lucky enough to be a business that could sell things online but what if you were not…?

Spare a thought for your typical FMCG brand. Sold predominantly in the supermarket and with seldom reason to ask shoppers to visit their website, your typical FMCG brand can’t measure success in quite the same way. Like Tiny Tim peering through the window at an unobtainable Christmas, FMCG brands have watched other sectors learn how digital helps drive sales whilst they remain out in the cold. IMPACT is all about letting these sorts of brands inside.

One of the smartest things about IMPACT is how we are able to connect online advertising to offline behaviours. As with many innovations in digital the answer lies with data. By working with our partners at AIMIA and I2C we were able to build a target audience that we could target with digital ads. Once exposed to the advertising we could follow their sales behaviour back using the Nectar card data. Then by comparing the end results to a control group we were able to attribute the sales uplift to the advertising. Measuring sales, however, only tells part of the story.

Often, we look at sales results as a Holy Grail of measurement because we know what the campaign delivered, but it doesn’t help us understand why - Exactly what did the advertising change within someone to alter their purchase behaviour? To help understand this we worked with MTM, our research partner, to compliment the sales research with brand surveys. 

So, did our digital campaigns deliver any offline sales? Across five different FMCG campaigns measured, we witnessed a far from miserly average ROI of £1.47, attributed exclusively to online advertising. Demonstrating that digital does indeed make an impact.

So, what does ‘A Christmas Carol’ and digital advertising measurement have in common? Perhaps, like Scrooge we have all seen the shortfalls of our measurement ways and we are working hard to try and change them for the better.

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