Online vs. Offline Conversions and the ROI of SEM
A new Google-sponsored comScore study found that searchers still make most search-related purchases offline. The study also shows that the minority of online purchases occur in the initial Internet session; the majority occur in subsequent sessions.
Consumer Vs. Business
The new study looked at conversion rates for various consumer categories over the 2005 shopping season. I believe that it is safe to infer similar if not more pronounced such behavior for business purchases because the latter typically have longer, more involved sales cycles, often involving more people.
Offline Conversion and Search ROI
Ignoring offline purchases can grossly underestimate the effectiveness of online marketing efforts. The ROI of SEO and keyword advertising can easily be double what online purchases suggest where there were as many offline purchases as online. If an online marketing program is close to breaking even solely from online purchases, it would take only a small offline conversion rate to make it profitable overall.
Purchase Latency
The other key issue raised by the research is the critical delay between awareness and purchase. Except for simple and/or impulse purchases, it’s very unlikely that your customers buy from your website when they first find it. If your online conversion measurements don’t take this into account, you will underestimate search marketing ROI. Measuring delayed purchases is further complicated when the searcher is not the buyer, a common occurrence in business-to-business transactions.
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