November 03, 2009
How To

Measure Paid Search Advertising's Contribution to Offline Sales: 4 Steps

SUMMARY: The ROI for search engine advertising includes more than direct online sales. Measuring your PPC ads' contribution to offline revenue is not always easy, though.

See how a consumer marketer found a unique way to tie offline conversions to online searches, and has improved paid search ROI. Includes the key calculation you'll need to get there.
Scott Jensen, Interactive Marketing Manager, Extra Space Storage, knew that customers often visited their website to learn about nearby self-storage facilities without reserving a unit online. Instead, many customers picked up the phone or drove to a nearby location to rent.

"40% of all our customers use the website at some point in their decision making process," Jensen says.

Jensen and his team needed to account for these offline conversions when evaluating the results of their search engine pay-per-click advertising. Below, see the strategy the team used to uncover which keywords drove offline conversions, and how they used this information in their PPC bidding process.

The strategy increased paid search marketing efficiency, helping to lift ROI nearly 100% over the last year -- a time when PPC became more expensive. Now, they consider some keywords valuable even if they're not driving online sales.

Step #1. Monitor customer behavior

The team had several ways to determine if customers used the website before an offline purchase.

- Tracking numbers

The company's facility pages each have unique traceable phone numbers. When someone calls one of these numbers, the team can see the website drove the call. The team also uses dynamically-inserted tracking phone numbers to help gauge PPC campaigns, Jensen says.

- Customer information forms

First-time customers are required to complete a new customer information form when renting space. The form includes questions asking how they found out about Extra Space and how they learned more about the company.

Gathering this information enabled Jensen's team to estimate how often customers used the website before purchasing.

Step #2. Identify a micro-conversion

The team identified steps visitors could take online, called micro-conversions, toward an offline sale. They developed a list before settling on most important actions.

Examples of micro-conversions include:
o Conducting multiple searches
o Placing a hold (not a purchase)
o Placing a reservation (credit card required)
o Visiting a facility location page

The team worked for approximately six weeks to identify a micro-conversion that showed real and quantifiable value. They settled on:

- Visiting a facility location page

These pages had a phone number, mapped location and directions to a specific facility. They also listed the available storage onsite. A specific facility page was often the last page a customer would visit before calling or driving to an Extra Space location to rent.

Step #3. Apply a dollar value

The team needed to quantify the micro-conversion's value. Each facility had a unique webpage and pricing structure (because space value varies by city and/or region), which somewhat complicated the issue.

By using the data gathered in Step #1, they estimated how many people converted after viewing each location page. Then, by combining each location's average order value with the number of visits to the corresponding pages, the team was able to estimate an average value of a visit to each page.

For example, if a page received 10,000 visitors per month and 3% of visitors converted offline for an average order value of $500, then each visit was worth an estimated $15.

The team made this calculation for each location page.

Step #4. Tie micro-conversion value to PPC management

The team used the above calculation to better value PPC keywords. Keywords that were shown to drive traffic to these pages had their ROI calculation increased, just as if they drove a sale for a lower price. The keyword's value became a combination the full- and micro-conversions it drove.

"A keyword might [fully] convert online once every six months. That being said, that does not mean that it is not contributing to sales," Jensen says.

The team incorporated this information into their PPC management software, which compiled nightly reports on how keywords performed. With that change, keywords shown to drive traffic to location pages would be given more value in the software's algorithm, and the software could adjust bids accordingly to take advantage of opportunities.

- Additional benefits

Even without the increase in PPC performance last year, Jensen says the team's strategy would still be worth the effort. The team is better able to see which types of keywords drive the best traffic, and apply that knowledge to other media, he says.

Useful links related to this article

Creative Samples from Extra Storage Space's PPC campaigns

How to Get a PPC Budget You Deserve

Custom Landing Pages for PPC: 4 Steps to 88% More Leads, Lower Costs

Marin Software: Tool the team uses to manage PPC

Extra Space Storage

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