Studies: Search driving big offline spending

August 3, 2007
by Latitude

Two noteworthy studies were published in the last few days, each of which clearly shows how important ‘pre-shopping’ via search is to offline sales. Let’s take a detailed look at the findings.

First, a massive study from Yahoo reinforces what previous studies have indicated: Customers who pre-shop online end up purchasing more at offline shops, to the tune of spending 41 per cent more in-store than those who do not pre-shop. Amy Vener, senior director of retail category at Yahoo, said:

Although recent research cites 89 percent of consumers shop for information about products online, less than 7 percent of retail sales actually take place online.

What is unhelpful about the press release regarding the study is that it does not break down the effectiveness of search versus intrusive, interruptive online display advertising. Of course, Yahoo has ad inventory across the whole spectrum of online ads that it needs to sell, so the vagueness is not entirely surprising. Still, past research has shown search to be hugely more effective, as it is being targeted to the potential customer by the customer themselves.

The second study provides insight into how local search can drive offline purchases. Here are a few findings of note from the survey:

82% of Local Searchers follow up offline via an in-store visit, phone call, or purchase, emphasizing the importance for marketers to integrate their on and offline information. Of these, 61% made purchases.

The local search business grew 20% this year, 40% faster than general searches on Google, Yahoo, MSN and others.

Internet Yellow Page and local searchers are savvy and fairly affluent.

Greg Sterling of Search Engine Land expresses surprise at the fact that the print version of the yellow pages seemed to fare so well in this survey. As ever, a cursory search reveals why that may be: The ad agency that conducted it just happens to do a large volume of its business in the yellow pages market. Needless to say, it would be interesting to get a look at exactly what questions were asked and how.

One certainty does emerge from both of these studies, and from so many others like them, and it is one that I have noted here several times over the last year or so: While the return on search engine marketing is highly measurable, the whole story cannot be captured when search is driving such an incredible amount of offline spending. Until technology exists that can track from keyword to click to offline shop, the full benefits of search for retailers will remain something of a mystery. The good news is that the benefits are there, completely trackable or not.