Will Google change the game by linking clicks to in-store purchases?

Discussion
May 30, 2017
Tom Ryan

Google last week introduced new tools to better measure the effectiveness of digital ads including linking ads to in-store purchases.

At its annual Google Marketing Next advertiser conference, officials introduced Google Attribution, which uses machine learning to provide data-driven insights about each step in the consumer journey. The free tool integrates with AdWords, Google Analytics and DoubleClick Search to determine how much credit to assign to each step in the consumer journey.

“It analyzes your account’s unique conversion patterns, comparing the paths of customers who convert to those who don’t, so you get results that accurately represent your business,” wrote Sridhar Ramaswamy, SVP of ads & commerce, in a blog post.

Mr. Ramaswamy said many marketers have been “stuck using last-click attribution” because of challenges in tracking journeys across devices and integrating tools.

Gaining more attention in the press was Google’s plans to roll out tools that link in-store purchases to digital ads.

The primary way the links will be accomplished is by tapping POS payment information. Credit and debit card companies will send Google encrypted information about store purchases that can be matched to collective online profiles of users who clicked on corresponding ads. Google has partnered with third parties, such as payment processors, to track about 70 percent of debit and credit card transactions in the U.S.

A second way ties in loyalty program data that are often shared with third parties. Mr. Ramaswamy wrote, “Both solutions match transactions back to Google ads in a secure and privacy-safe way, and only report on aggregated and anonymized store sales to protect your customer data.”

Connecting clicks to in-store purchases is seen as the “holy grail” to proving digital’s effectiveness. Amit Jain, chief executive of Bridg, told the Washington Post, “Google — and also Facebook — believe that in order to get digital dollars from advertisers who are still primarily spending on TV, they need to prove that digital works.”

Goggle said “double-blind encryption” will keep the person’s identity anonymous but the lack of details on exactly how its tracking works is expected to stoke privacy concerns.

DISCUSSION QUESTIONS: Could connecting clicks to in-store purchases be a game changer for retail? What do you think of machine learning’s potential to better understand the shopper journey? What questions or concerns would you have about both tools?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This will take the guesswork out of effective ad channels. I am a big fan of better tracking throughout the shopper journey."
"Having the ability to track the ROPO (research online purchase offline) journey sounds like science fiction."
"Using payment data for attribution cuts retailers out of the mix and will reduce what retailers received from brands for promotion."

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31 Comments on "Will Google change the game by linking clicks to in-store purchases?"


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Dave Bruno
BrainTrust

“Connecting the dots” between digital interactions and physical interactions is a game-changer for retail. When we truly understand the shopper’s entire journey, and when we can connect digital footprints to physical conversions, then we have the power to effectively measure — and impact — influence.

Sterling Hawkins
BrainTrust

Google Attribution is a new tool in a game that has already changed. Making this kind of capability more easily accessible for more retailers is a win for retailers and a win for Google.

Tom Dougherty
BrainTrust

Yes and no. The game has already changed and this is just a small and natural step forward. I wonder if traditional retail actually sees that the game has already changed?

Mark Ryski
BrainTrust

This is a significant blind spot for retailers today. If Google is able to achieve its vision then yes, this will be a game-changer for enabling retailers to truly understand the impact of their online advertising. Machine learning is being applied to help answer all kinds of complex data questions and so it makes sense to use it to help answer the attribution question. While Google is taking a strong and proper stance on privacy including “double-blind encryption,” at the end of the day Google will be able to stitch together a profile of individual consumers’ behaviors the likes of which has never been seen before. In what ways Google will then use these insights to their own benefit is hard to say. As with so many initiatives today, it seems privacy is a secondary concern.

Dr. Stephen Needel
BrainTrust

This seems to make an assumption that in-store purchases are precipitated by the results of a Google search. That’s true in some cases and not true in most cases, which calls into question how good the analysis will be. While drawing this link (accurately) will be a nice advance, it’s not a game-changer — it just becomes another piece of the marketing dollar allocation process. Machine learning is fine but not a necessary component of this process — there are other approaches.

Lyle Bunn (Ph.D. Hon)
Guest

Good point that there are other approaches. In-store digital media that activates the sale by presenting messages, information and promotion moves the needle on conversion while making the store more attractive as a destination.

Phil Masiello
BrainTrust

What sets digital marketing apart from all other advertising efforts for e-commerce is that everything can be tracked and measured. Brick-and-mortar retail has a more difficult time. Having the ability to link clicks to in-store purchases will improve the retail brands’ tracking of online ad spend and provide a more profitable decision making model.

Any insight into the shopper journey would be something that both the brands and the marketers would embrace. This will take the guesswork out of effective ad channels. I am a big fan of better tracking throughout the shopper journey.

Brandon Rael
BrainTrust

This is omnichannel retail shopping innovation at its best! By merging the physical and digital shopping experiences and by leveraging and optimizing the untapped power of machine learning, you have a winning combination that will be hard to compete with. Along with the fact that it’s essential for retailers, in the age of Amazon, to fully understand their customers through valuable insights that enable them to remain relevant and be a compelling shopping destination.

There are great advantages for retail companies leveraging machine learning as they seek significant and meaningful insights about the customer’s shopping journey, preferences, passions and interest. Once this is truly operationalized then the curated assortments, personalization and customization strategies can be executed. Then that will lead to a natural brick-and-mortar transformation, which is critical in today’s retail economy.

Art Suriano
BrainTrust

I don’t see connecting clicks to in-store purchases as a game-changer for retail, but I see it as another tool that, if used correctly, will help marketers determine the effectiveness of their advertising. Blended advertising has always been the most successful way to attract customers because it’s hard to pinpoint what drove a customer to purchase. Seeing and hearing ads during a period may create the interest in the customer and usually the last ad drives them to the purchase. But in trying to tie clicks to the in-store purchase, the purchase may be a result of the combined advertising that created the interest. So as long as the marketers don’t rely solely on looking at clicks to in-store purchases as the only reason the customer responded, it should prove to be helpful.

Charles Dimov
Guest

This is a great step forward. It won’t be a game changer immediately, but in a few years we will look back and wonder how we did without it. Sort of like what Google Adwords is today to marketing. It is another step in advancing the omnichannel retail path.

Adrian Weidmann
BrainTrust

The ability to accurately follow the shopper’s journey across the shopping and purchasing landscape is certainly valuable to brands wanting to sell that one extra accessory or unnecessary item. But what about the adrenaline rush that comes with discovery? The surprise and delight? The visibility of the entire path to purchase and beyond is certainly a game-changer but I’m not convinced it’s in the shopper’s best interest. I love using the Internet and Google to search for that elusive part for my 35-year-old Yanmar diesel engine. I’m delighted when I actually find the part from a tractor parts distributor in Northern Michigan. I hope that shopping search and discovery — and more importantly the emotional charge that it delivers — isn’t lost in the digital age of AI.

Lyle Bunn (Ph.D. Hon)
Guest

Marketing is today’s bastion of business functions that technology is refining. Attribution is the smart bomb in the battle to validate or prompt a shift of $200 billion in ad spending in the paid-owned-earned media model (and an equal amount for in-store merchandising). Google, Facebook, Amazon, YouTube and others are using attribution to win minds, knowing budgets will follow as long as the show-stoppers of fraud and privacy can be managed.

Gene Detroyer
BrainTrust

Having data is almost always good. Being able to tie the advertising and activity to purchases is the Holy Grail. The problem is in the mindset as described in the article. Emphasizing in-store versus omnichannel is myopic. I’d like to see the connection of someone making a purchase in-store and then continuing to purchase from that retailer online. To me that is the big win and the real game-changer.

Cathy Hotka
BrainTrust

This is retail’s key opportunity. There are valuable insights trapped in the siloed data that retailers keep. We need a Marshall Plan to guide the industry forward and to provide use cases for integration. Better that than the alternative — where competitors lead the way.

Pavlo Khliust
Guest

Machine learning, along with products like Google Attribution, provides us with a great set of tools to analyze and understand the shopper journey better, thus increasing the effectiveness of any marketing strategy. Connecting clicks to in-store purchases may not be a game-changer but will be the next milestone in creating a truly unified, guided shopping experience from which both companies and shoppers alike will benefit greatly.

Shawn Harris
BrainTrust

If the loop can be closed between online and in-store for shopper behavior and purchases, it would truly be a step change. Net-new capabilities would be realized by a number of stakeholders, including brand marketers, agencies and publishers, and it would also enable otherwise unachievable consumer experiences. I like where this is going.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
2 years 8 months ago

This is another piece to the sales attribution puzzle. However it seems like Google gains the biggest benefit from this tool because it will help them sell more advertising by showing retailers a stronger ROI for their online ads.

While this is helpful, there are a lot of other missing pieces required to fully understand each customer’s journey. Ideally retailers want to understand the impact of the following:

  • Showrooming: Shopping in the store and later buying online;
  • Webrooming: Shopping online (the brand’s website or other websites) and purchasing in the store;
  • Catalogrooming: shopping a print catalog and then buying online or in the store.

There are a lot of missing pieces to the puzzle …

Ralph Jacobson
BrainTrust

This is yet another example of a really great tool that can give retailers performance metrics (potentially for free) that the vast majority of merchants don’t even explore to see if it could work for them. The biggest issue here is awareness. We have conversations each week where retailers say, “Wow, you can do that?!” primarily because they didn’t even know the tool was out there. There are a bunch of game-changers in the marketplace today that are ripe for the pickin!

Ken Cassar
BrainTrust
Ken Cassar
Vice President, Research, Shoptalk
2 years 8 months ago

This is an impressive accomplishment with significant value for retailer advertisers. This will provide new visibility into the relationship between ads and consumer behavior. It’s a very smart move for Google, too. It allows Google to take credit for transactions that it historically wouldn’t have been able to claim credit for. Advertisers have got to recognize, though, that just because Google is able to claim a contribution to these sales, it doesn’t deserve 100 percent credit — Google ad exposures or searches would’ve been only one of many ad touchpoints along the path to purchase. It will be tempting for advertisers to attribute a full sale to Google where matches occur, but we know that there are many other touchpoints still in play that can’t be ignored. We could be on the cusp of an era where Google touches become over-valued because of their visibility in the P2P.

Cristian Grossmann
Guest
Cristian Grossmann
CEO, Beekeeper
2 years 8 months ago

I don’t see connecting clicks to in-store purchases as a game-changer, but I do think it’s a very valuable tool in further understanding the buyer’s journey. Machine learning is the way of the future — there is still so much untapped potential in Big Data. The more we can analyze buyer personas and patterns, the better we can deliver a personalized experience which is really what shoppers are craving right now.

Sunny Kumar
BrainTrust

Having the ability to track the ROPO (research online purchase offline) journey sounds like science fiction. Which is why this, on the face of it, has the potential to change what we know about customer behavior and what it actually means — forever. But to be really effective it will need to be super accurate. Without seeing the details it’s unclear how effective this will be and hard to determine the level of impact it may have. Though now that Google has started on the journey there’s no doubt the accuracy will just get better and better.

Dan Raftery
Guest

As Google, Amazon and Facebook advance their capabilities in this area, it will be important for some smart people to start developing hypotheses to actually test in this environment. There are two reasons: 1.) While this technology is definitely cool, it runs the risk of being labeled as a new technology in search of a meaningful application. One simple example would be to define the level of conversion that has a payback. 2.) Privacy advocates handcuffed retailer loyalty program data mining in the early days. Something very similar could occur here, especially given the additional concerns surrounding financial transaction security and hacking.

Marge Laney
BrainTrust
2 years 8 months ago

Oddly, proving to retailers that their customer’s journey is circuitous is a game-changer. Most retailers seem to be in denial about the fact that 94 percent of buying still happens in-store and that most customers pre-search online making that experience the gateway to purchase.

Most retailers still view their online and brick-and-mortar business as separate and distinct, while their customers simply view them as different paths to the same end.

Hopefully this information will generate an “ah-ha” moment and provide the justification brick-and-mortar retailers need to create a meaningful buying relationship with their customers — when and how the customers wish to engage.

Ricardo Belmar
BrainTrust

This is an evolutionary step in connecting the online shopping journey with the in-store journey. However that’s not the complete story, is it? This seems more likely to bring benefit to Google’s ad products as the data output will encourage more retailers to increase their spend with Google on advertising if they can identify direct links to customers.

But what about other digital mediums? There are other vendors in this space, such as Unicast, that look to leverage beacon networks along with Wi-Fi and other attribution mechanisms to link digital and physical worlds. This will allow retailers to better target customers and to better understand how to personalize their communication to them in a more seamless way across physical and digital (online and mobile) outlets.

Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
2 years 8 months ago

Assuming the tool works it could add some good interesting data to the discussion.

But I advise caution. The last time I reviewed some Google attribution work (several years ago) they sent us big clear answers — based on exceptionally unstable attribution of the very tiny, tiny portion of online actions they could attribute. It was an incredible error to have suggested clear answers of any sort.

So this announcement gives me a headache. What I expect is several years of magical claims of discovery of amazing things which aren’t accurate and only look at a small portion of the advertising mix, yet are sold to retailers and brands as if they were absolute finds.

There will likely be some valuable insights. But will the value of those insights outweigh the damage done by claiming too much from them? And in the long run will this turn out to be yet another big digital announcement that fails in practice? Only time will tell.

So let’s dabble with the new toy … with caution.

Larry Negrich
BrainTrust

This certainly provides an additional signal but seems to overly weight adwords contribution in the sale. Many influences, including TV, radio, print, alternative search can all play a part and Google is in the business of selling its products.

The privacy part of this is laughable. Google and info feeders can throw around the term “double-blind” all they like but if they can use AI to correlate the click and purchase there is little doubt additional data layers could be used to easily identify the individual.

William Hogben
BrainTrust

Better data around digital will show it to be over/under priced and impact marketing mixes for a short time. Using payment data for attribution cuts retailers out of the mix and will reduce what retailers received from brands for promotion.

Shep Hyken
BrainTrust

The more you can track, the better you can manage. The old saying that “knowledge is power” is true, especially when it comes to knowing where your sales are coming from, who is clicking on your ads, how often, when they convert, etc. AI is going to help track and create reports that help retailers better understand the process and make better decisions.

gordon arnold
Guest
Birthdays, weddings, spontaneous gifting, holidays and social events have a way of confounding the automated report generators we are discussing today. The misinformed reporting has a tendency to annoy consumers with offers that are in no way being considered. This fault is exponentially cascaded as time goes on by flooding consumers with irrelevant pop-ups and banners. Google is in a race to stay relevant at a time when medium and large companies are taking ownership of customer interfacing through the use of newer and faster applications that perform to consumer priorities. While the retailer efforts do make it easier to shop and buy, there are glaring opportunities for third party marketing efforts where little is done to recognize these needs. To cut costs companies review inventory turn, shortages and non performing offerings. Finding and removing a loser is easy and getting easier. What is difficult for electronic pencil whip purchasing departments is to find out why they failed and what is selling in the market that they are not aware of. The needs of any… Read more »
Jeff Miller
Guest
Before answering the questions posed, I just had to re-read the wonderful buzzword filled sentence – “Google Attribution, which uses machine learning to provide data-driven insights about each step in the consumer journey.” Just needed to add VR and it would have hit the trifecta. This is for sure a game changer, but will take some time for brick and mortar retailers to really understand and use this data even if the data is 100% accurate. If this was any other company outside of Google or maybe Amazon, I would have serious doubts about the accuracy of matching ad viewership to POS sales data via credit cards at this scale. Google is far from perfect, but more transparent in my mind than Facebook, who always seem to be apologizing for incorrect metrics. There are also some serious blind spots I can see. people who use cash people who use other payment sources perhaps like Apple Pay who may not make that data available to Google purchases like cars where credit cards are not often used… Read more »
Cate Trotter
BrainTrust

I don’t think this is completely changing the game, but it will help retailers respond better to changes that have already happened. This seems like a great step towards better omnichannel strategies. For some time we’ve been aware that some shoppers use physical stores like showrooms and that what they see drives online purchases, so it’s great to be able look at that from the other side and see where online ads are driving in-store purchases. I think there’ll also be some interesting data for retailers from this, which might help better target their Google ad efforts.

wpDiscuz
Braintrust
"This will take the guesswork out of effective ad channels. I am a big fan of better tracking throughout the shopper journey."
"Having the ability to track the ROPO (research online purchase offline) journey sounds like science fiction."
"Using payment data for attribution cuts retailers out of the mix and will reduce what retailers received from brands for promotion."

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