By Deyali Das | Manager, Client Success | ETML
In today’s blended world of physical and digital experiences, consumers meticulously research a product online before heading to an offline store to make the purchase, or vice versa. This “phygital” behavior, combined with the rise of D2C brands and established online marketplaces, presents a unique challenge for e-commerce brands: where and how to allocate advertising resources in this omnichannel landscape? We recently tackled this very challenge for a leading Home Appliances brand, and in the following sections, we’ll delve into the strategies employed to navigate the unique maze.
Objective:
The objective of this experiment is to comprehensively understand the contribution of paid channels to overall sales, focusing both on Last-non-direct (LnD) and First click (FC) attribution models.
Challenge:
The challenge lied in accurately assessing the impact of paid advertising spends on sales, considering the complexities of attribution models and the interplay between marketing (online) and sales channels (online as well as offline). However, we had a secret weapon: warranty registration data!
Even if people didn’t buy the product from the D2C website, a significant chunk would come to the website to register for the warranty after the purchase. We realized that there were 5 times more warranty registrations on the website than D2C website sales.
This gave us a much clearer and larger picture than just looking at website sales alone while accessing the paid campaigns’ performance.
The challenge remained, though. We still needed to stitch campaigns’ data with warranty data.
Strategy:
To solve this puzzle, we had taken a deep dive into the data and figured out what’s really driving sales from our paid ads. We used two different ways of looking at the data: “Last-non-direct” and “First click”.
Influence of online (Google + Meta) campaigns on overall website purchases:
| LnD Attribution | FC Attribution | |
| Online advertising influence on website purchase | 40% | 57% |
| Google influence on website purchase | 33% | 46% |
| Meta influence on website purchase | 6% | 11% |
- 40-57% (depending on attribution model) of website purchases were influenced by paid advertising which meant paid channels play a crucial role in driving website traffic and customer consideration.
- Both Last-non-direct (LnD) and First Click (FC) attribution models show significant contribution from paid ads (40% and 57% respectively). This highlights the importance of recognizing the multi-touch customer journey, where paid ads might nudge customers early on, even if the purchase happens later.
Influence of online (Google + Meta) campaigns on off website (Marketplaces + Offline Retail) purchases:
| LnD Attribution | FC Attribution | |
| Online advertising influence on off- website purchase | 11% | 26% |
| Google influence on off website purchase | 11% | 25% |
| Meta influence on off website purchase | 0% | 1% |
- Website purchase data alone doesn’t tell the whole story. Including warranty registrations provides a more comprehensive view of how paid advertising drives customer behavior, even if the final purchase happens elsewhere.
Conclusion :
- Optimize Campaigns on Combined Event of Purchase+Warranty: Instead of focusing solely on website purchases, optimizing campaigns based on the combined event of purchase and warranty registration can yield better results. This holistic approach ensures that marketing efforts are aligned with the entire customer journey, from online discovery to offline purchase.
- Scale Campaigns Based on Attribution Models: Scale campaigns based on CPP, considering both FC and LnD attribution models. For long-term brand awareness and customer acquisition, prioritizing campaigns with a low CPP_FC will be most effective. This ensures we’re reaching new customers at a sustainable cost. However, for short-term promotional campaigns or limited-time sales, optimizing for CPP_LnD can be advantageous. This allows us to focus on campaigns that directly influence purchase decisions during those specific periods.
By implementing these data-driven strategies, we got on the track to unlock the full potential of paid advertising in the dynamic world of phygital commerce for our partner brand.
