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Will Retailers Dump CPC for ‘Cost-Per-Visit’ Advertising?
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The ability to measure the influence of digital media on offline activity and the increasing integration of the digital and physical worlds is a compelling and even profound development with significant implications, writes the LSA’s Greg Sterling.

According to the Interactive Advertising Bureau, digital ad spending by retailers represents 21 percent of all online ad revenue. It’s the largest single industry category worth almost $16 billion in 2016.

Several companies are now courting retailers and their agencies with “Cost-Per-Visit” (CPV) ad models that charge, as the name suggests, only for store visits. Once companies were able, using mobile devices, to start measuring store visitation it was only a matter of time before CPV models appeared.

Earlier this year, GroundTruth (formerly xAd) was the first to introduce CPV for mobile marketers, arguing it offered search-like purchase intent. Placed is providing third-party verification of actual visits.

Almost immediately thereafter, Retale introduced a similar “guaranteed visits” model for retail advertisers (with Placed also providing validation). Here the company doesn’t charge on a per-visit basis, but guarantees a pre-determined number of visitors for a price. The common theme is that the advertiser only pays for customers in store.

Blis also offers CPV, based on predictive location data. And Empyr has introduced a “cost-per-revenue” model charging marketers or retailers only when an in-store sale actually occurs. We’re likely to see more per-sale models like this emerge over time.

The CPV Moment Arrives

All of these developments happened within the same month, more or less.

The reason clicks became the key metric of early online advertising is because they could be tracked and measured. Now that real-world actions are measurable, it makes sense that new models and metrics emerge in response.

According to GroundTruth and Blis, retailers have been enthusiastic about the CPV model, which shifts the risk to the platform from the advertiser. With CPV, the danger of non-viewable impressions and fraud are also minimized or eliminated.

GroundTruth said in August that it was seeing high demand for the CPV model among retailers and brands. The company reported that “8 out of 10” brands exposed to the CPV concept responded positively. The company also said that it then had “over 100 active campaigns” projected for Q4.

But Is CPV Viable?

Some ad agencies I’ve spoken about the viability of CPV have expressed skepticism about whether CPV will take hold, seeing it as a novel marketing or PR move more than a long-term new advertising option. But this view seems to be contradicted by signals from retailers themselves.

Google, which is measuring store visits and sales lift, suggested that valuable online actions could be missed in a pure CPV model. That flips the critique of Cost-Per-Click (CPC) on its head. One of the reasons that Google started measuring offline visits and actions is because it showed how AdWords were doing a lot more for advertisers than was being captured in online-only metrics.

At first blush CPV seems wholly desirable for retailers or any marketer that does most of its business offline (e.g., fast-casual restaurants). When retail and services are combined, well over 90 percent of transactions are offline, but increasingly influenced by digital. So it appears almost a no-brainer.

The CPV Process

Implementing CPV, however, is a bit more complicated, as some of the agency skeptics pointed out to me in various phone conversations.

For example, how do the platforms exclude existing customers who would have visited the business anyway? Do location accuracy challenges make this model vulnerable to fraud or bad location? What about price: how do retailers and brands determine what’s the right amount to pay for a visit?

GroundTruth, Blis and others invested in CPV have responses to each of these questions. But these and other questions represent push-back in response to any claim that CPV is an inevitable “CPC killer.”

The ability to measure the influence of digital media on offline activity and the increasing integration of the digital and physical worlds is a compelling and even profound development with significant implications, including for “traditional” digital media metrics and ad models.

*At the Place Conference in New York on September 18, two sessions will tackle CPV and whether it will disrupt current ad models, at least in the $16 billion retail category. They feature all the companies at the center of CPV (GroundTruth, Placed, Retale, Blis) as well as some of the skeptics who represent hundreds of millions in annual ad spending (Ansira, GroupM, Sapient-Razorfish, Media Horizons).

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Partner Spotlight: Q&A with RSi’s Ansa

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Partner Spotlight: Q&A with RSi’s Ansa

Question 1: How long have you been at RSi and what is your role?
For the past three years, I have been responsible for creating and scaling Ansa, a web-based solution from RSi – Retail Solutions, Inc., that has enabled over 75 of the world’s largest CPG companies and their agencies to build, measure and maximize the performance of their shopper marketing campaigns running in support of the nation’s leading retailers. I am responsible for all aspects of business development, partner and agency relationships and the overall revenue growth of Ansa.

Question 2: How does RSi help solve marketer challenges?
Shopper marketers’ biggest challenge is to connect their online campaigns to in-store results. RSi’s Ansa solution provides the intelligence they need, based on daily, store-level POS-data from the largest US retailers in order to plan, target, and measure the impact of their shopper marketing campaigns. Retail Solutions Inc. has partnered with the leading ad networks in Shopper Marketing, such as Blis, to make Ansa’s automated analytics available for the world’s largest CPG companies and their agencies. To measure and maximize their digital ad campaigns, all they need to do is ask for Ansa inside their next campaign.

Question 3: What benefits does the partnership with Blis bring to buyers as well as the adtech ecosystem?
With RSi’s Ansa solution, building, dynamically optimizing, and reviewing attribution measures for every digital ad campaign has never been so simple. Here is how it works:
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3. MEASUREMENT & INSIGHTS: get access via the online portal to end of campaign analysis just days after the media campaign is over. Visualizations give you a standardized set of analytics, such as sales lift, incremental dollars and units, confidence level, weekly lift, characteristics of high performing stores, etc. Prove and improve your media to help you fine-tune strategies for your future campaigns.

Question 4: What are use cases for the Blis + RSi partnership? (Please provide a few examples from different verticals).
If you are a shopper marketer, maximizing your budgets, understanding performance of your marketing tactics and generating key learnings from those marketing tactics are tasks that are essential to your business.

Running a digital marketing campaign with Blis, and Ansa’s daily, store-level sales intelligence helps make that extremely for the CPG community and shopper marketers specifically.

For existing products, Blis campaigns using Ansa targeting can reach a targeting efficiency of 2:1 vs. campaigns that do not use Ansa store-level targeting thereby ensuring that every dollar is spent driving sales to your most important retailer locations.

Blis campaigns optimized with Ansa typically identify and heavy up investment around 16% of stores that are trending significantly ahead of the average store during a campaign and identify and decrease investment around 14% of stores that are trending significantly behind the average store, therefore ensuring that your budget is being optimized surrounding stores that are over-performing during a given campaign.

After each Blis campaign, Ansa automatically generates measurement of Featured Item Lift and Halo Item Lift at both the total event and week levels. Results are completed 5 business days after the end of each campaign and allow you to learn quickly and improve continuously, all at an amazingly affordable price.

Question 5: What shopper marketing measurement trends do you predict for 2018?
Optimization in-flight based on store sales trends during campaign. Optimizing on engagement, intent and / or clicks may be ok for some campaigns but more and more frequently shopper marketers are tasked with driving sales at their most important retailers. And understanding how their marketing tactics performed 5-6 weeks after a campaign has finished is just not fast enough anymore in today’s fast paced world and puts media providers at a severe disadvantage. By utilizing automated reporting that allows Ansa partners like Blis to understand and optimize their media in-flight based on daily, store-level POS sales data you now empower your media partner to act on supporting the stores that are driving your product sales which can ultimately provide a powerful boost to a shopper marketing campaign.

Question 6: If there was one piece of content you think every marketer should read, what is it?
(Other than this blog post of course!)

Think with Google and Facebook IQ are two fantastic sources of resources. Articles, trends, case studies, POVs, insights, etc… pretty much everything you need to read to keep you up-to-speed in this very fast-paced environment.

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Embracing the Retailer’s Dream Metric: Cost Per Visit

The twentieth-century American engineer and statistician W. Edwards Deming once said, “Just because you can measure everything, doesn’t mean that you should.”

This applies to retailer struggles today as marketing executives need to decide what they should measure and how. Do they care about impressions, views or click-through rates? And once they figure that out, how can they make sure their ad dollars are really working? The Partnership predicts that ad fraud will cost brands over $16 billion this year alone, while Infectious Media suggests that over half of all digital ads aren’t seen at all.

Fortunately for retailers, there’s a new metric in town—one designed to eliminate waste and increase sales. With a cost-per-visit (CPV) model, retailers pay only when a consumer sees an ad and visits a specific location. Here are four ways retailers are benefiting from this cutting-edge new metric.

1) Increased Foot Traffic

With the National Retail Federation predicting eight to 12 percent e-commerce growth this year alone, no one can deny the rapid rise of online sales. However, 85 percent of consumers still prefer to shop in brick-and-mortar stores, where 94 percent of all sales are generated. That’s why it’s vital for retailers to keep their physical stores alive and continue to enhance their in-store experiences.

With the explicit goal of bringing visitors into physical store locations, CPV is a metric for retailers wanting to increase foot traffic—and pay only for successful conversions. While there are many ways to boost in-store visits, today’s leading location data solutions use predictive location modeling. With Blis Futures, we choose to charge on a CPV-basis because we are completely confident in this approach.

2) Greater In-store Sales

Driving consumers into brick-and-mortar locations may also encourage consumers to buy more than they anticipated. It gives retailers the opportunity to upsell consumers so they need to make sure they clearly advertise their promotional pricing, point-of-purchase displays and loyalty programs. Once you have a potential customer in the store, you can push tailored messaging in real-time and create personalized promotions. As anyone that has ever been into a Target retail location can attest – you may go in for one specific item but end up unable to leave the store for less than $100! So only paying when a consumer sees an ad and then visits a physical location reaps multiples rewards for a marketer.

3) Branding Opportunities

When retailers buy ads on a cost-per-visit basis, they don’t pay if the consumer sees the ad but doesn’t come into the store. That means the retailer also benefits from ad views and branding. In fact, a consumer may see the ad and make a purchase online rather than in-store, but the marketer still pays nothing for that conversion. At Blis, we are willing to take that risk and allow marketers “free” branding messages. Our confidence in the technology behind our CPV metric allows us to think of marketers first.

4) Risk-free Investing

CPV transfers the risk from buyer to partner, so retailers don’t have to worry about wasted ad spend: They’re making a completely risk-free investment. With free branding and zero downside, retailers have nothing to lose.

When Blis became one of the first tech partners to offer the CPV model earlier this year, we sent a critical message to both retailers and the wider industry: We’re ushering in a new era of transparency and accountability in advertising.

Check back again next week when we switch gears to discuss how retailers can use mobile to boost engagement, retention and acquisition.

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Closing the Retailer Purchase Loop: Solving the Challenge of Attribution

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Closing the Retailer Purchase Loop: Solving the Challenge of...

You’re on your way to work when you pass a billboard featuring Nike’s newest running shoe. That reminds you: you just signed up for a half marathon, so you’ll need some new gear. You start googling top-of-the-line running shoes on your phone. You forget about the race until days later when looking at Facebook on your laptop, and there they are: the same shoes that caught your eye. Still, you won’t purchase them until you try them on. So what a pleasant surprise when, on your walk home, a banner ad appears across your phone: “You’re 3 minutes from a Nike store,” it says. Why not stop by?

If you go into that store and purchase those shoes, which ad was it that led to the conversion? Was it the original billboard, the social media ad, or the location-based banner? Perhaps a perfect combination of all three?

These questions reflect the challenges every marketer is currently facing when it comes to attribution. Today, a typical path to purchase is no longer a straight line to the point of sale. It looks more like a latticework of ads both online and offline, on our devices or in our neighborhoods.

Yet despite this added complexity, brands can begin to solve the mystery of attribution and determine the value of each marketing touchpoint. They just need to follow the footsteps.

Understanding Footsteps to Purchase

Brands can get a better understanding of which campaigns are boosting their ROI by taking a look at how digital ads directly relate to foot traffic.

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Brands don’t strive for accurate attribution just for the sake of it. They want to know what’s causing conversions so they can do more of it—and cut out what might not be working at all.

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What if advertisers discover that no matter what distance, more people seem to be purchasing the energy drink from Walgreens than CVS? Perhaps next time, they can put a greater share of their ad budget into targeting those near Walgreens.

By solving some of the mysteries around attribution by finding which campaigns are driving sales, advertisers can continuously optimize their campaigns. And that means less waste and a greater bang for every marketing buck.

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