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As organizations increasingly invest money in digital channels, how can they effectively measure the impact of digital ads sales in their brick-and-mortar locations?

Measuring the impact of digital advertising spend has become a multi-billion-dollar question. In fact, in 2017, advertisers spent more on digital advertising than on traditional TV advertising for the first time ever. At the same time, according to the National Retail Federation, holiday sales during November and December 2017 totaled $691.9 billion – yet only $138.4 billion were in online and other non-store sales.

These factors beg the question: as organizations increasingly invest money in digital channels, how can they effectively measure the impact of digital ads sales in their brick-and-mortar locations? A 2017 Association of National Advertisers report on the State of Programmatic Media Buying shows that 46 percent of respondents are neutral or not sure about the satisfaction of their programmatic performance— indicating a widespread desire to better understand the outcomes of advertising investments.

Marketing attribution – that is, linking marketing investments to their impact on revenue – is nothing new. Since the rise of e-commerce, retailers have dedicated more resources to trying to accurately measure the impact of their online investments across all channels. In some instances, they may assert that the last click a consumer makes is the one that caused the purchase. What’s more, only a fraction of purchases resulting from digital ads are made through clicks.

Impact of Digital Advertising

Measuring the impact of digital ads in physical channels continues to challenge organizations across industries, including retail. Compounding the challenge is the ever-growing number of customer touchpoints: website interactions, mobile app activity, and digital ad exposure, paid search, social media interactions, inperson interactions, and more. For example, according to a recent Forrester report, 53% of the $3.7 trillion US retail market will be driven through digital touchpoints by the end of 2018.

With cross-channel customer behavior the new norm, it is critical that retailers develop a holistic view of the impact of digital ads on sales in-store. For example, after seeing a digital ad, are customers going in-store to try on items for size and purchasing in the store? Are digital promotions pulling important sales from the store and not actually increasing total sales?

In order to understand the incremental impact of these investments across channels, and identify the types of campaigns that are most effective with different customer segments, organizations need to adopt an omnichannel lens. Failure to understand which digital ads are truly impacting purchase behavior in brick-and-mortar locations can result in millions spent on ineffective ads. While many still use last-click attribution to analyze the efficiency of online advertisements, they do not account for the total financial impact, which is often substantial.

So if traditional online attribution isn’t the answer, what is? How can retailers measure the impact of their digital ad investments on in-store sales? They must embrace a robust analytical approach to such measurement to optimize their advertising investments.

Adopting a solution to measure actual spend impact will enable retailers to tangibly tie digital advertising to the impact at the cash register in-store, unlocking actionable insights. From there, they will have the opportunity to optimize their allocation of advertising budget, analyze their investments to understand instore impact, and make more informed, data-driven decisions.

Chris Reid Executive Vice President, Services, North America

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