For all that Google knows about us, it still lacks a comprehensive picture of how we spend our money in stores.
Though e-commerce is booming—sales are estimated to hit $61 billion in November and December alone—more than 90% of shopping still happens in physical stores, according to the search company. Shoppers often start online, doing research before buying something. For items costing $1,000 or more, shoppers take an average of 45 days to make up their minds; for purchases less than $50, it takes them 10 days on average.
In order to prove the value of the online ads it sells, Google has been working for years to quantify for retailers how the ads ultimately lead to real-world sales. Now a new metric it plans to roll out in the coming weeks will let advertisers track consumers’ visits to stores. This measurement will allow Google, long suffering from falling ad prices, to show more direct links between online ads and offline sales. Early testers like PetSmart learned that 10% to 18% of clicks on search ads resulted in a store visit (a healthy figure, according to a Gartner research analyst.)
There are a few limitations to how the search giant measures store visits. Using shoppers’ smartphone locations, Google estimates store visits based on the proximity of users to a given retailer’s store location, but only if they clicked on the store’s online ads within the last 30 days.
Google provides advertisers with aggregate data rather than details on specific individuals. But people might still be unnerved to learn of its ability to link online and offline activity. Google can track store visits if location history is turned on within a user’s smartphone settings and the user is logged into Google services on her phone. Many people are likely unaware that Google can do this tracking because location history is on by default on iOS 8 devices. (In contrast, Android users have to opt in to the setting unless they’ve turned on location tracking in the past.)
It’s also a relatively complicated process for retailers to get started. The feature is only available to existing advertisers that have multiple store locations and receive “a large number” of clicks and store visits. The retailer has to set up multiple campaigns for its various locations, notes Sephi Shapira, CEO of mobile marketing firm MassiveImpact. “The approach in my mind has to be more streamlined and more scalable,” he says.
Also, the store-visit metric doesn’t track actual purchases, though Google is testing a way to further connect the dots using retailers’ purchase data (as Facebook is doing with Atlas using data brokers.)
“There are still issues with point-of-sale systems and things like that before fully closing that loop,” says Michael McGuire, research vice president at Gartner. “Google wants to get that attribution from the online ad, not just the fact they’re driving you to the store,” he adds. Theoretically, the company could solve the problem with Google Wallet, but with only an estimated 4% share of digital payment transactions, that has been a disappointment so far.