Google announced last week that the company is moving closer to providing a higher-resolution way to view online-to-offline marketing with its new Estimated Total Conversions. The metric promises to increase visibility on the top part of the conversion funnel. In addition to the online conversions that marketers see today, they will also be able to track cross-device conversions, and soon store visits and calls.
Google clearly cares about local. But in an online-to-offline race, the big difference is the bottom of the funnel, not optimizations to the top. In fairness, Google never claimed this release would cover the full funnel. But the ability to track the full funnel is precisely what enabled Google to win the first wave. What’s it going to take to win the next?
It’s not a major surprise Google is leading the charge here. Since the company’s inception, it has done the best job at amassing a huge audience and drawing a straight line between online ad spend and online conversion. Marketing dollars go where they’re loved. A 1×1 pixel image on the checkout page provided attribution that decades of advertisers previously could never reach. And a $300 billion star was born.
Everyone knows the stakes are bigger this time. The online-to-offline opportunity dwarfs the current online-to-online market. eMarketer pegged online spending at $343 billion last year. But people still buy a lot more stuff and services in person. Greg Sterling, who’s been calling this shift for years, cites government sources which put the relevant offline spending at $2 trillion. That number is probably on point, and as mobile use balloons it may eventually be low by a factor of two or three. Influencing $5 trillion of spend has room to make more than a few Googles — as Twitter, Facebook and Yelp have more than noticed.
Tellingly, in the initial data from Estimated Total Conversions the least lift was achieved in what they categorize as local. Entertainment saw a 12% increase, travel and technology both 8%, but local only a 2% increase in conversions tracked. While there’s no denying that settling into an airline seat is an offline experience, the epitome of offline is local. Online marketing has the opportunity to influence the millions of businesses on main street. So if movies, hotel rooms, and shoes are all seeing a moderate rise, why isn’t every other business that’s selling burritos, haircuts or karate?
Maybe local businesses are so well tracked already that following ads across channels can only provide a modest gain. Not likely. Any small business owner will tell you they struggle to understand which, if any, of their marketing strategies are working best. A more likely explanation is the obvious one – the endpoint in local is trickier to reliably collect.
Until recently, the “last mile” offline had been considered the most challenging step to solve for. But today, it’s increasingly where most of the action is happening. Consideration starts online, but picking up the sushi or the TV, or getting the bridal party fitted, occurs offline — and that involves not just more steps, but also more room for attribution. What was opaque previously is now fertile ground. The race is underway to plant flags at every step and, to make things interesting, with each flag planted consumer behavior is changing.
Consider check-ins — the equivalent of an offline unique visitor. What Foursquare and Gowalla kicked off, geo-fencing companies have extended, and now the beacons from Apple and PayPal are making even more automated. Going up to the mid-funnel, there are leading indicators now like order ahead and scheduling. Heading further down the funnel, coupons, card-linked offers, and loyalty apps provide a checkpoint at the conversion moment. And yet still the greatest visibility for attribution is from within the point-of-sale, where perhaps the most disruption has occurred recently. As if to put an exclamation point on it, Amazon jumped in with both feet recently. Which approach do you think is going to be the high resolution bottom to add to the sophisticated top?
When something is purchased online, the Google checkout pixel is there to capture it. But the giant offline wave coming next requires something different. Even as top-of-funnel tracking improves, the needle in local is unlikely to really move until the equivalent of the offline checkout pixel gets established. But once it does, expect things to move very fast. The company or companies with a massive consumer audience who can tie them together are going to transform main street.
Matthew Mahoney enjoys watching how the needs of buyers and local businesses are changing. In his day job he’s VP Business Development at Booker, a company that helps service businesses run and grow.