Suppose you are a digital marketer and you work for a retailer. There’s a good chance that about 90% of all purchases will not be made in your webshop, but in an “old-fashioned” offline shop. Now, if that is the case, what will be your main focus for the coming years? Exactly: connecting online with offline,
Update by Boris Jurriens, Social Media Strategist
You want to guide digital media efforts based on what has the most value: offline behavior. In this article you will discover which steps you need to make to ensure that your business results improve significantly through the use of digital media.
What is ROPO and why is it important?
If you aren’t a retailer, you may ask yourself: ‘What is ROPO?’ ROPO means: Research Online, Purchase Offline. In short, it is about the effects of what people do online on their offline (buying) behavior. Why is that important if you have physical stores? Well, that has to do with the following:
- The ‘offline world’ is huge. 90,4% of all purchases still take place in an “old fashioned” store.
- The ‘online world’ is also big. We spend a lot of time there. On average, no less than 4 hours and 44 minutes a day. Partly for this reason digital media investments continue to grow.
Both worlds are strongly connected:
of all buyers look for product information online before they make a purchase
of all non-grocery purchases is influenced by digital interactions
is the uplift in physical store visits through digital interactions
If you have a physical store, then you have a problem
Online customer journeys are easy to map. Online conversions can be attributed to digital campaigns using different models. But if someone goes to a physical store to make a purchase after an online orientation, then you totally lose sight of this person. In digital (paid) media, we call it a black box:
You won’t get the most out of your digital media investments, because far fewer conversions (such as store visits and sales) are allocated to digital media, whereas digital certainly has had an influence on the conversions. So that’s an undervaluation that leads to suboptimal media planning and optimization. For that reason, connecting online and offline with the aim of demonstrating the true value of digital media is one of the most important focal points for digital marketers who work for retailers.
Good news: there are solutions!
Roughly speaking, these solutions relate to measuring and attributing store visits and offline sales to digital media. Below you find an overview of the solutions per channel:
The added value of these solutions is that they provide real-time insight into the actual impact of online channels. Advertisers can actively manage and optimize results that have real business impact instead of directing on secondary metrics (think about reach of online micro-conversions). Bottom line, every euro of digital media budget delivers more.
Curious how these solutions work for Facebook? I previously wrote an article about it (fair warning: it’s in Dutch, but Google Translate can probably help you out nicely).
Our vision on ROPO
Many of these solutions are fairly new and still developing. However, the first test results are promising. This, in combination with the increasing demand from advertisers, will ensure that the technology will develop faster. Our vision on ROPO within digital media is therefore:
A CONNECTED WORLD IN 2021
‘Well that’s cheesy’, you may think. And you’re right. But it perfectly reflects what we mean. More specifically, it means:
- Customer journeys are 100% transparent. The black box which we discussed earlier is not a big issue anymore. Based on measured (offline) behaviour, real-time insight can be gained into what happens after, for example, an online impression or click.
- The effectiveness of online performance campaigns increases because the actual value of online channels is demonstrated and can be optimized for this.
- Online, offline: it doesn’t matter anymore. Brands optimize online for omnichannel sales and revenue. Whether it is generated via the online or offline channel no longer matters. A sale is a sale, and turnover is turnover.
- KPI integration. As a result of these developments, brands will coordinate the objectives of different departments (such as retail and media) more closely. That also applies to budgets.
IPIO: When ROPO has grown up
The above is of course something that will happen in the future. The technology is not yet ready-to-go. Implementation is complicated. And many departments are involved. Consider legal departments due to the use of personal data and marketing intelligence due to the provision of sales data. This ensures that implementation is not just a matter of fact. For that reason, Greenhouse works with a ROPO maturity model. For one thing, this model is like a roadmap towards the end goal: one connected world. On the other hand, the model provides insight into where a brand stands in its ROPO maturity. This model is called IPIO.
IPIO stands for:
- Implementation (phase 1) This phase is all about implementing the technologies. Consider, for example, linking the latitude and longitude of stores to a Facebook page.
- Piloting (phase 2) The technology is new. This phase revolves around tests that answer the questions: does the technology work and is the data reliable?
- Incrementality (phase 3) Influencing offline behaviour is only valuable if it produces store visits or offline sales that wouldn’t take place. This phase must answer the question: do online media yield extra results?
- Objective & KPI (phase 4) If it appears that digital media produce incremental offline results, performance campaigns should be optimized and settled on both online and offline sales. From that moment only one question remains. How do you generate sales as cost-efficiently as possible?
Does a brand go through all these steps? Then the highest level of ROPO maturity is reached. One connected world.
ROPO is one of the most important focal points of 2020/2021 for retailers. New technologies make it possible to demonstrate the true value of digital media and to significantly increase the impact on business results. Because implementation takes some time, it’s wise to take the first steps towards the Holy Grail. The sooner you are a winning brand.