Mobile advertising spend is up approximately 80% over the last year, but sales
generated from mobile remain low, representing one percent of all commerce. With
such low performance, why do retailers continue to invest?
The fact is the data is deceiving. The impact that mobile advertising has on retail is
actually much higher than what is reported. The analytics tools that we use to measure
mobile performance are unable to report its full impact. By understanding how
consumers use mobile devices in their daily lives we are able to see the true impact of
mobile advertising.
According to an IPSOS/Google study, 90% of consumers use more than one device
before they make a purchase, however our analytics fail to show how people move
from one device to another before they convert. Without this data, we’re measuring the
performance of each device against one another instead of how they influence each
other. The analytics that we have today aren’t measuring the impact of mobile on sales
because they can’t capture the full shopping experience.
In the next year there will be more mobile devices connected to the Internet than
desktop. In the next two years, 50% of Internet traffic will come from mobile devices
(Millenia Media). If mobile isn’t working for you today, it will be a growing issue for you
in the future. Retailers must figure out how to invest, measure, and optimize mobile,
and it starts with understanding consumer behavior.
Here are five ways retailers can measure the influence of mobile advertising on their business today:
1. Make it easier to check outThe average mobile device has 24 clicks or form entries. This poor customer
experience has resulted in a 97% cart abandonment rate for mobile (IPSOS/Google),
compared to 67% for desktop (Baymard Institute).
Mobile shoppers are also wary. Only 40% of consumers think it’s safe to make a
purchase on a mobile device.
The latestMore on the evolution of mobile advertising on our blog: www.adlucent.com/blog
The Rise of MobileConsumers spend 30% of their time on mobile devices and that figure continues to grow. Retailers have responded by investing more in mobile advertising. Initial performance results have been unimpressive, but are the numbers telling the full story? We’ll take a look at how retailers can measure the influence that mobile has on their bottom line.
By Michael Griffin, CEO, Adlucent
DOES MOBILE ADVERTISING ACTUALLY WORK?Five simple ways to measure mobile advertising performance
There are two ways retailers can improve the checkout experience:
1. The main culprit here is the credit card and account creation process.
The majority of consumers want to be able to check out in a couple of
clicks. Until you have a broad user base that can easily login and checkout
with their own payment credentials, the biggest improvement we’re seeing
is when people implement a third party payment system like Paypal Express
and Google Instant Buy. With 120 million accounts, Paypal has a huge share
of the payment processing market. Retailers like Crutchfield are reporting
a 20-30% increase in CVR when offering Paypal (PayPal study). Google
Instant Buy should not be confused with Google Wallet. The free service fills
out consumer data and the retailer then processes the transaction.
2. A second option is biometric checkout which allows for fingerprint and
voice authentication. Devices such as wearables (like Google Glasses) will
only become more complicated to transact on so finding new ways to allow
shoppers to convert quickly is imperative.
2. Help facilitate the movement between devicesRetailers must make the shopping experience easier for the 40% of consumers who
browse on a mobile device but make a purchase on a desktop (Comscore). When
shopping online, consumers will access a product they’re interested in through three
ways: email, going directly to the website, or through search.
One way to simplify this process is through add an “email me this link” button on each
landing page. Many retailers give shoppers the option to email a link to a friend but most
people will simply email the link to themselves. Less than 40% of retailers currently do
this. A tracking code should be added to each email that’s generated so you know which
mobile ad led to the sale. ASOS is a retailer that’s currently doing this well.
3. Change analytics from device and channel view to customer viewGoogle’s success depends on being able to track value across multiple devices. In
October 2013, they rolled out Estimated Total Conversions to deliver a better picture of
how Adwords drives conversions that take multiple devices to complete. In one Google
study, advertisers in the travel industry were able to measure 8% more conversions than
they were able to before, and 33% more conversions that originated on a mobile phone.
It will be interesting to see how this impacts retailers.
Retailer Perspective:“Mobile unlocks incredible opportunities and gives you access to your customers that you’ve never had before. Think about how your customer moves across all devices. Remember that we don’t have it all figured out, there is still a lot to learn.”
– Sarah Rose, SVP of Product and Growth, Modcloth
Retailers to Watch• Modcloth• Best Buy• Nordstrom• Sephora• Target
4. Use geographic parting to test the impact of mobile on online and offline salesAt Adlucent, we use geographic parting to run a variety of tests for our customers,
and it’s especially useful for measuring the value that mobile advertising has on
online and offline sales. Retailers should start by splitting the United States into
two even segments, taking into consideration demographics, shopping behaviors,
and any other factors that may result in different buying behavior. Next you’ll split
campaigns into two groups and turn mobile advertising off in one region and allow
it to run in the second. Measure performance based on direct sales on mobile and
indirect lift on online and offline sales by region. Watch the impact mobile advertising
has on other parts of your business―online sales, offline sales, catalog, telephone
purchases, and more.
5. Expand the definition of successAccording to Nielsen, 77% of smartphone-based purchase activity occurs in store.
RadioShack has led the way in tracking the influence that mobile has on brick and
mortar stores. They have a store within five miles of 90% of people in the United
States, totaling 5500 stores. They found that 40-60% of people who clicked on a
store locator with a mobile device actually visited a store. Furthermore, 85% then
made a purchase. There is no more guesswork―they can assign a value to every ad
that results in the clicking of a store locator.
Technology providers like RetailNext, Placed, and Euclid are doing great work around
in-store analytics and heat mapping.
Retailers can and should measure the impact of microconversions like this to
understand the true value of mobile. Other actions you can assign a value to include
calling a unique phone number linked to an advertising campaign, downloading an
app, or registering as a user.
Fashion apparel retailer Modcloth uses their mobile site to encourage new user
registration. They use IDs to understand how customers who are signed in interact
with them over time and across devices. Instead of focusing purely on driving sales
on mobile devices, they are interested in driving new registrations through mobile
ads. Once the user is registered, they can follow up with that customer using
email to convert them into a paying customer. They are then able to assign value
to the mobile ads that generated the registration because they’re able to track the
likelihood of that visitor becoming a paid customer.
Mobile Search Tips:1. Study Buyer Behavior
2. Optimize for Device
3. Develop a Customer Acquisition Strategy
4. Test a Portion of Your Products then Refine
Modcloth doesn’t look at traditional metrics like conversions per visit, rather they look at revenue per unique shopper. They are then able to invest in building the community and activities to get the biggest share of closet. Ultimately metrics like lifetime value of a customer is more valuable than mobile transaction numbers.
Does mobile adverting translate to revenue? The results are lukewarm if we just look at mobile transactions as a result of mobile advertising, but if you look at the full picture of how consumers are using their mobile devices, it becomes a much more interesting story. Understanding how your customers shop and engage with your brand puts the numbers in context. Your customers use mobile devices as a step in the process and no step can be looked at in isolation.
Mobile usage is soaring and it will overtake desktop as the primary way to interact with your brand in the next couple of years. To prepare for this future, we believe a shift in mindset is what’s necessary. Look at the value generated per unique shopper, not per visit. It’s a simple shift, but a powerful one.
Rather than looking at performance of any device in isolation, what’s required is that we look at performance of our customers regardless of what device or channel they use to shop and it just so happens that mobile devices are becoming your customers favorite way to find and shop with you.
Get deeper insights with Applied Shopping Analytics At Adlucent, we use Applied Shopping Analytics to help leading retailers understand their
customers and to apply the learning to today’s modern online advertising infrastructure.
If you’re interested in learning more advanced methods for measuring mobile
advertising, we can arrange a time for you to chat with an Adlucent digital marketing
expert. Simply visit www.adlucent.com to get started.
About the Author:As the founder of Adlucent, Michael is a leading thinker and innovator with over 12 years of experience in strategic search engine marketing (SEM), bid optimization, consumer demand intelligence and retail analytics.
An active member of the Shop.org Research Committee, Michael participates in driving industry research and sharing results with retailers. Michael’s work and perspective have been featured in major media outlets, including The New York Times, Inc. Magazine, the Search Insider and TechCrunch.
Let’s Chatw: adlucent.com/buyerpathp: 1-800-788-9152e: [email protected]
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