Earlier this week, comScore announced a new partnership with Datalogix, the payments data startup that has already inked deals with Facebook and Twitter. The deal will allow the attribution giant to tap begin measuring the impact of digital media spending on in-store spending by tapping into Datalogix’s massive trove of payment information.
The inclusion of offline data into attribution platforms such as comScore is an important step for the digital marketing industry as it looks to convince marketers to shift spending from more traditional channels such as television. Startups such as Placed have built more specialized tools but mainstream adoption of these techniques will help as well.
Street Fight recently caught up with Andrew Lipsman, vice president of marketing and insights at comScore, to discuss the developments that opened the door for offline attribution, the shift of consumer package goods spending to digital, and whether developments in payments (read: ApplePay) will make a difference for the company.
comScore has built a big business helping marketers measure marketing performance online. Help us understand how the company thinks about offline data?
Ecommerce is a huge point of emphasis in the retail segment, but it still only accounts for 12-13% of what we call “discretionary” retail. The vast majority of this discretionary retail spending still happens offline, but we more and more, we know, and can prove, it’s being influenced by online media.
We have been measuring this offline behavior five or six years, but we used to rely on our own panel. We could see if people on our panel were exposed to advertisements and then we could see whether they were more likely to purchase something online or we could link to some online databases and measure if they’re purchasing in-store. It was good for big brands, but the limitation was that sample size was just too small sized to do robust research.
As offline and online merge, which markets do you see the most acceleration in terms of shifting to digital spending?
In terms of the demand for understanding offline sales, that has increased in a really compelling fashion. If we go back to 2007 and 2008, consumer packaged goods (CPG) companies, which are some of the biggest brand marketers, were not investing in digital. The rationale at the time, which now seems short sighted, was that “people don’t buy my products online — they buy them in the grocery store or at Walgreens — so I’m not going to invest online.”
The argument the industry had to make was that people are exposed to an increasing amount of advertising online and that impacts offline sales. It’s not like a consumer sees an ad and immediately purchases the product online. That’s not how advertising works, and we certainly don’t hold television advertising to that standard.
What’s changed in the past few years to make offline metrics and measurements more of a possibility?
A few things have changed with the advent of big data over the past few years. Our measurement is increasingly incorporating much larger, and diverse data sets. Now, when we measure online advertising we do not just have to measure that through our panel. We can look at every impressions and assign demographics or other attributions to that impression. The partnership with Datalogix allows us to then take that ubiquitous sample and anonymously match it with the massive in-store purchase database they offer.
What’s happened over the past couple years is that the datasets have become much more robust and it’s opened up opportunities for more granular analysis. In the past, we only could look at larger brands and prove, at a high level, that exposure to a product led to an increase in offline sales by 10 percent. Now, we can look at smaller brands, and we can look at a lot more dimensions of those ad campaigns to better understand what media drives performance.
Would you say the creation of offline measurement capabilities is a reaction to, or predecessor of, a broader shift in spending by local commerce-driven brands to digital?
We started to see CPG budgets open up and shift to digital after there was evidence of proof that digital was performing. Usually, proof — or measurement — precedes investment. Once the proof is in place, that’s when the bigger investment occurs. Now, CPG advertisers are now some of the most important online.
Folks in the marketing and technology industry have talked a lot about the potential for mobile payment systems to help connect online and offline behavior. With ApplePay on its way, does you believe it will make a big difference?
What often happens is that people get really excited about the possibility of a new technology, but do not take into account the way humans actually behave. The fact that a technology exists doesn’t mean it is something that will become ingrained in our daily habits. Now that apple is in the mix, if there’s a chance it will become mainstream, this is it. But we’re going to have to see how that behavior develops over time. If it reaches critical mass, that’s the point where the systems will be developed to make use of that dataset.
Steven Jacobs is Street Fight’s deputy editor.