Facebook can illuminate the impact of ads on in-store sales

Measuring the impact of online ads to in store sales has been historically difficult for most advertisers. CPG brands whose products were sold in larger grocery store chains with loyalty card data have had the most opportunity to connect online ads on Facebook and Twitter to in-store purchases through DataLogix.

According to the United States Department of Commerce, eCommerce sales in 2014 accounted for 6.5% of total sales, an increase of 12% YoY. While online sales continue to grow at a higher rate compared to retail sales, over 93% of all sales are still happening in person at a retail store location. Which ads are helping drive consumers into stores, and at what rate, however, has gone mostly unmeasured.

This topic will continue to be an important point of focus for digital marketers but Facebook has now made it easier for brands advertising on their platform. Early Q1 2015, Facebook announced the introduction of a new in-house measurement solution called Conversion Lift. This new feature is publically available directly through Facebook’s native Ad Manager, thus allowing marketers to be able to measure the impact of their Facebook ads on in-store purchases without the use of a 3rd party measurement solution such as DataLogix.

Facebook & DataLogix have published research stating that 99% of users who purchase in store never click on an ad, making attribution tough to gauge while using the historically popular last click attribution model. Facebook’s Conversion Lift will now allow for any brand with in-store sales data (which must include transaction date and e-mail address), regardless of vertical, to upload it directly into Facebook to determine the sales impact of their Facebook ads.  In preliminary tests, Facebook has reported that multiple brands have seen over 10% lift in both online and offline sales as a result of running this type of measurement.

Conversion Lift is an easy to use tool that will allow marketers to set up their study themselves. There are 6 steps to run this type of campaign:

  1. Facebook will run a feasibility analysis to ensure that the campaign will have enough scale and spend to ensure statistical significance.
  2. Facebook will create a control group of up to 20% of the target audience and an exposed ad group.
  3. Marketer runs ads in a Reach & Frequency campaign to reach the target audience at the cheapest CPM costs, and Facebook will automatically serve ads to the exposed group, while holding out ads to the control group.
  4. After the campaign is finished, allow for a post measurement period of one to four weeks to ensure the capturing of any sales that may have happened post-campaign.
  5. Once the post-measurement period is over, a brand can securely upload sales data into Facebook in the same fashion a custom audience email list via hashed email addresses would be uploaded. The minimum amount of data that is needed for this test is transaction date and email address.
  6. Facebook then calculates the data and reports back on the control versus exposed group to determine results.

This new type of measurement study may lead to a rise in co-op type programs between brands and retailers. Multi- brand retailers (such as department stores) tend to own the in-store sales data that would be imperative for this type of campaign and would need to agree to have it uploaded into Facebook. There are also stores that are most likely to have a high volume of loyalty card shoppers, which means the store has their email address on file, which is needed to be able to track the conversion against Facebook data.

If in-store sales from Facebook can be proven at scale, retailers may likely start to partner with brands in order to add more marketing dollars to social ad campaigns in order to drive higher foot traffic and in-store sales.  This mutual agreement is beneficial for both the brand and the retail store since driving positive business results is the ideal symbiotic relationship. Currently, many retail stores do not collect email addresses at point of purchase except for users opting for e-receipts at the counter or those consumers who are loyalty card members. This new ability to track in-store sales will likely push retailers to ask for email addresses in order to capture the necessary data to take advantage of this measurement option. Since conversion lift is now available publically for all marketers as of this month in the ads interface, marketers should try to test this at their earliest convenience.  Here at iProspect, we’re working with relevant clients to test.