The search for offline sales November 2017 Research Retail Seasonal trend White paper Value of search Search has value across the cosumer decision journey. It can help shoppers learn about new products, compare options and find nearby stores. With paid search in your marketing mix, you can help drive revenue - both online and offline - and deliver the right message to consumers as they're searching for your products or brand. Executive summary Search influences decisions at every stage of the consumer’s decision journey. When consumers go from inspiration to purchase, they depend on search engines to find and buy a product. But how does paid search affect purchases – in particular, brick-and-mortar purchases? In late 2016, Microsoft worked with a nationwide department store chain in the US to understand how paid search campaigns impacted sales, both online and offline. Based on both the retailer’s in-store purchase data and their Bing Ads account data, the study examines how Bing Ads campaigns can drive in-store revenue and have a positive effect on offline return on ad spend (ROAS), especially during the holiday season. This insight will help advertisers understand how consumers utilize search from initial consideration to purchase, and how to adjust the timing of search engine marketing (SEM) to maximize both offline and online revenue. Key takeaways: Bing Ads influence both online and offline purchases. Non-brand ads and Bing Shopping Campaigns (BSC) have a larger impact on offline sales during the holidays. Bing Ads have a higher offline return on ad spend (ROAS) during the holidays, for every ad type. Offline conversion cycles are lengthier than online conversion cycles. Methodology For online transactions, this retailer has Universal Event Tracking (UET) set up for their Bing Ads account. UET uses a single tag which allows advertisers to retarget their search audience and track conversion across multiple accounts and campaigns. For offline transactions, Microsoft teamed up with LiveRamp, a leader in online performance marketing, to analyze their deep set of their clients’ cross- channel marketing data and map the retailer’s offline purchases back to online search behaviors on the Bing Network. LiveRamp employed a process known as cookie matching to anonymously identify transactions that were influenced by Bing Ads. Here's how it works: Using last-click attribution (standard 30-day lookback), we looked at text ad campaigns for branded and category, or non-branded, keywords as well as Bing Shopping Campaigns. We compared the attribution results between a holiday timeframe (November–December 2016) and a non-pre-holiday timeframe (October 2016), to determine the seasonal impact. Overall, the study identified and analyzed 904K in-store transactions resulting in $59M of in-store revenue for the retailer. Key findings Bing Ads influence both online and offline purchases. In fact, during the holidays, Bing Ads campaigns delivered a larger share of offline sales than online sales. Prior to the holidays offline sales accounted for 39% of total revenue generated by Bing Ads campaigns. During the holidays, revenue share from offline sales rose to 52%. Offline revenue contribution during the holidays compared to before the holiday season Open sharing control Share using Facebook Share using Twitter Share using LinkedIn Share using Email Offline Revenue Contribution graph Non-brand ads and BSC have a larger impact on offline sales during the holidays. In this study, we analyzed different Bing Ads ad types to understand their impact on online and offline revenue. Brand campaigns often get the lion’s share of credit when measuring revenue impact, because last-click attribution models show branded keywords as the last-touch point prior to purchase. This leads advertisers to neglect their non-brand and shopping campaigns in favor of brand campaigns. While Bing Ads brand campaigns may drive the most online and offline revenue, don’t discount the impact of category and shopping campaigns – especially during the holidays. During the non-holiday time period, this retailer’s offline revenue contribution was 69% brand campaigns, 14% non-brand, and 17% Bing Shopping Campaigns (BSC), while online revenue contribution was weighted even more toward brand campaigns, with 79% brand, 10% non-brand, and 11% BSC. For the holiday period, we see a shift in revenue drivers in favor of non-brand and BSC. This retailer now sees 54% brand, 26% non-brand, and 20% BSC for offline revenue contribution, and 68% brand, 19% non-brand, and 13% Bing Shopping Campaigns for online revenue contribution. In conclusion, while non-brand and Bing Shopping Campaigns are always an important component to paid search campaigns, their impact rises 48% for offline and 52% for online revenue during the holidays. Offline and online revenue contribution by ad type Bing Ads have a higher offline ROAS during the holidays, for every ad type. Offline return on ad spend during the holidays compared to before the holiday season. Offline ROAS improved during the holidays, especially for shopping and non-brand campaigns. During the holidays, offline ROAS improved by 2% for brand campaigns, 38% for non-brand campaigns, and 34% for Bing Shopping Campaigns compared to pre-holiday levels. Advertisers can expect a revenue boost in their holiday paid search campaigns with Bing Ads, as their customers journey from the search engine results page (SERP) to their physical stores more often during the holidays than they did earlier in the year. Offline conversion cycles are lengthier than online conversion cycles. The majority of online sales occur within the first week of the click. But offline sales follow a longer process. In mapping purchases against their last Bing Ads interaction, we see that 66% of offline purchases happen 2-4 weeks after the click. While the majority of online sales occur within the first week of the click, 66% of offline purchases happen 2-4 weeks after the click. Offline sales over time: when in-store transactions occur after a paid search click during the holidays. Open sharing control Share using Facebook Share using Twitter Share using LinkedIn Share using Email When In-Store Transactions Occur After a Paid Search Click during the Holidays. For advertisers, this means that in order to make the most of the holiday season, paid search campaigns need to be live in October, at least 4 weeks ahead of key dates like Black Friday and Cyber Monday. But they shouldn’t expect an immediate return on ad spend. For the 34% of in-store customers who purchase within the first week of a click, it’s important to keep paid search campaigns running up past last final shipping deadlines, especially as we see that in-store purchases begin to overtake online purchases as early as the first week of December and grow steadily until Christmas. Significantly, the study shows that Bing Ads has a considerable impact on offline post-Christmas purchases, relative to online. Ecommerce and physical store purchases vs. paid search spend Recommendations Bing Ads helps retailers engage their customers to shop with them both online and in-store. During the holidays, Bing Ads proves to be an even more valuable channel for advertisers. Plan and evaluate paid search as part of your broader marketing strategy, to ensure you engage your customers with the right message at the right time. Kick off SEM campaigns early to engage research and comparison shoppers. Because the majority of offline customers (66%) make a purchase 2-4 weeks after engaging with a search ad, it’s important to get Bing Ads campaigns set up well in advanced of key shopping periods. Take advantage of Bing Ads features to help you manage longer customer journeys. Lengthier conversion cycles mean a higher risk that your competitors can intercept your shoppers. Use Remarketing to make sure your brand stays top-of-mind throughout your customer’s purchase path. Employ Universal Event Tracking (UET) to ensure you know that you’ve earned conversions. Invest in non-brand and Bing Shopping Campaigns for revenue growth. Non-brand and Bing Shopping Campaigns are proven to be even more impactful for online and offline purchases during the holidays. Be sure to use Keyword Planner to identify new non-branded keyword opportunities for your campaigns. Develop descriptive, keyword-rich, and up-to-date product feeds for your Bing Shopping Campaigns, as well as other Bing Shopping Campaign best practices. Keep paid search campaigns running past last shipping deadlines. A sizable segment of offline customers (34%) convert in under a week. As shipping options grow scarce, gift shoppers continue to search, click, and buy in-store. Also, paid search influenced a much larger share of offline revenue than online both pre- and post- Christmas and also post-Christmas. For more expert insights and answers, visit Bing Ads Insights. To learn more about optimizing your holiday campaigns, check out the Bing Ads Holiday Planning Guide and Holiday Hub. Download the insight Linda Shi Marketing Communications Manager, Bing Ads Research Retail Seasonal trend White paper Sources Microsoft, Offline Revenue Impact of Paid Search Study, 2017. Study of Microsoft internal data and a U.S. retailer's in-store purchase data, LiveRamp, commissioned by Microsoft, 27.1k transactions from October 17-23, 2016 and 904k transactions from November to December 2016; results are based on actual attributed numbers from cookie matching and are not extrapolated.