New Study Says PPC Ads Generate Up To 26% More In Offline Sales

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According to a story on MediaPost.com today, paid search and display ads also drive activity into brick-and-mortar stores, but the online ad campaigns are not getting credit for the offline sales.

The article cites a study from RevTrax, which found that “offline sales benefit most from online paid-search ads. A two-year study ending in August found that for every $1 of ecommerce revenue generated from paid-search ads, marketers gained approximately another $6 of in-store revenue.”

“The data indicates that multichannel retailers must factor in-store sales into paid-search ROI calculations. If not, they will undervalue the paid-search channel’s contribution to revenue by as much as 85%.”

“The study also found that by creating a keyword-level attribution model, marketers in the study better understand the ROI of each click on a paid-search ad.”

“Retailers with an average transaction of less than $200 found the average click on a paid-search ad generated approximately $15 of in-store revenue, with some merchants seeing as much as $28 of in-store revenue.”

“Approximately 9% of clicks on a paid-search ad generated an in-store sale, with some merchants seeing up to 26% of clicks on a paid-search ad generating an in-store sale. Some merchants saw a cost of sale as low as 1%.””

Of course Google doesn’t take any of that into account when it applies its top secret smart pricing algorithm to reduce the amount of revenue it pays to its publishes for a click.
For advertisers which have brick and mortar operations its clear from the study that they are getting extra benefits and sales offline from online advertising making the publishes share even smaller.
Nice

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

Comments

  2. Domain Report says

    Nice to hear, another benefit of online advertising. Too bad it is so hard to track, but if advertisers hear about this news it just gives them more reason to spend more online. Makes sense to me that people see a display ad throughout the day, then later they might stop into that store and buy something because of the ad. Similar to billboards and newspaper ads, which are also hard to track, but advertisers get used to rating online ads by how much online sales and click throughs they generate, which is easy to track.

  3. Muscle Sprouts says

    “…….the average click on a paid-search ad generated approximately $15 of in-store revenue, with some merchants seeing as much as $28 of in-store revenue.””

    A single freakin’ click? $15 to $28 more in-store rev?? That’s insane!!!!

    Talk about Internet traffic on a whole being wildly undervalued and underrated!!!

    That’s nothing short of amazing!!! Advertisers , and especially Madison Avenue need to wake up from the dinosaur age and give us our due for our traffic.

  4. BFitz says

    @Muscle Sprouts

    Don’t confuse revenue with profit for a brick and morter business. Rent, salaries, cost of goods sold, etc take most of that. Assume 5% of revenue for marketing and PPC is marketing. So 5% of $15 is 75 cents. That’s what you are trying to get a piece of.

  5. james says

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    CPC are to raise.