As the famous John Wanamaker quote goes, “Half of the money I spend on marketing is wasted; the trouble is I don’t know which half.” Even in the age of mobile phones and the tracking of shoppers’ moves and clicks, marketers still don’t have visibility into the complex interplay between different marketing channels. In short, while it’s a simple idea, it’s quite complicated to measure the impact of digital efforts on real sales. And that’s why Facebook’s latest retail announcement is such a big deal.
On Tuesday, Facebook announced Local Awareness ads that “show people the shops nearest to them and offer relevant Calls to Action, such as ‘Get Directions,’ making it easy for people to shop at the location which is most convenient for them.”
But the really big deal is this: coming with its offline API, Local Awareness ads add reporting that lets merchants and marketers know how many people actually come to shop or call a call center after seeing a Facebook campaign. How, you may ask? By triangulating a variety of data including Wi-Fi hotspots, cell tower triangulation, geofencing and beacons. Not surprisingly, Facebook will also allow ad creative optimization, delivery and targeting based on shop visits and analysis of results across shops and regions to plan and optimize future campaigns.
Eric Jillard, Director of Digital and Retail Marketing at Cadillac (one of the companies already using the solution), commented in the official announcement, "It is important that we engage with customers on their own terms and in a natural manner. Facebook's shop visits solution gives us the unique opportunity to increase, understand and capture dealership foot traffic in a way that could be directly linked to our media strategy."
Why is it important to focus on mobile and local?
Smartphones have almost become the extensions of our hands as we reach for them to answer any question or perform any task, shopping-related or otherwise. Some estimates suggest that mobile shopping-related searches increased 120% in the last year. At the same time, mobile conversion rates are anemic and often about local store visits. For retailers, that means that mobile is likely the best channel to increase foot traffic and sales in physical stores.
A recent study by Google published in April also suggests that customers are heavily using the “near me” search. “Near me” is a such a powerful driver in localized searches that it has grown almost 2.5 times on YoY basis.
Moreover, half of the users using “near me” in their search through mobile are ending up in a store within a day. And the conversion into purchases happens in 18% of the cases, according to Google.
Half of the battle for customers in the store is in showing the local item’s availability. As proof, a study cites Sears, whose stores witnessed a 122% increase in store visits after ads were tailored to show item availability in particular stores. The research suggests that a quarter of potential store visitors don’t go to the local store because they don’t know if a product is in stock.
The solution is useful but not earth-shattering
Although Facebook’s solution is surely a great way for merchants to measure the impact of Facebook ads on in-store traffic and sales, it is still quite a narrow focus on a single channel – Facebook. The ability to measure the impact of the 50 mins per day that people spend on Facebook is great, but what about all other time people browsing for products and services on, say, Amazon, RetailMeNot or any other web shopping property? Google, by the way, has given marketers a similar solution which has been welcome but hasn’t reduced gripes about how expensive or effective Google really is.
A study published last November suggested that teens in the US, for instance, spend nine hours on a given day on media consumption. Facebook’s solution is helpful but merchants still need a lot more insight to understand what happens as a result of off-Facebook Web time, and Facebook can’t help them with that.