Posted: Wednesday 1st June 2016 in News, Paid Media, Thought Leadership.

Local Inventory Ads (LIAs) are a new ad format from Google that could be set to redefine the marketing landscape as we know it, bridging the gap between digital ad spend and offline consumer activity.

The digital landscape is continually changing which is dictated by shifting consumer trends. Google data tells us that Mobile is the go to vehicle for research and ‘on the go’ consideration and purchase:

• Google ‘near me’ searches have increased 34x since 2011
• 80% of ‘near me’ searches are on mobile devices
• There has been a 120% YOY growth in mobile shopping related terms
• 60% of consumers who search for something local on their phone visit a store within 1 day, and 18% then go on to purchase

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Interest in ‘near me’ searches. Source: Google Trends

 

 

 

 

 

 

 

 

 

 

What are LIAs?

On the face of it LIAs are relatively simple. Designed to drive in-store footfall, they are local stock-driven product ads, served to consumers with assumed in-store purchase intent. This provides retailers with an opportunity to take advantage of the huge amount of ‘near me’ Google search traffic that previously may have been out of reach.

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Local inventory ads

 

 

 

 

 

 

 

 

 

 

 

 

Significant impact

Ultimately we believe LIA activity could have a significant impact on a retailer’s bottom line, and could be particularly fruitful for retailers with limited search activity or a compelling in-store proposition. LIAs provide an opportunity to increase in-store footfall and offline sales, and develop the vitally important relationship with customers through a great in-store experience and personable customer service.

The potential impact of this channel is only limited by the number of store locations, product range and availability and subsequent qualifying searches within 30km.

According to Google:

  • 50% of the public have used a mobile device to purchase from a brand they wouldn’t usually consider
  • 63% of instore sales are influenced by digital activity

We expect LIAs to grow these stats and becoming increasingly influential to retailers’ in-store performance.

What we’ve seen so far

At time of press cost per click for LIAs was slightly below that of their PLA (Product Listing Ad) counterparts; however industry adoption and competitor strategy will dictate future cost. If offline budgets previously ring-fenced for above-the-line activity are utilised, cost and adoption could increase dramatically. Stringent feed specification requirements for each of the four feeds (seen below) do mean that this is unlikely, in the short term at least.

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This raises the question of budget management. Who is going to cover this? Digital marketing managers may be reluctant to spend on a channel that may not see direct attributed returns; at least not until accurate online/offline measurement is nailed. The channel then opens up much needed conversations around overall and complimentary cross-functional marketing budgets, covering both above- and below-the-line activity. One brand, one goal, one pot.

The real value of LIAs needs to be measured at a top level against the wider objectives; beyond digital in isolation. Store visit estimations are provided as a metric by Google using various touch points and assumptions. However, a robust insight test should be considered in parallel to any launch to validate value and subsequent strategy for each retailer.

For retailers to understand if LIAs need to become a mainstay in their marketing mix, they will need to know the following:

  • Would these consumers have visited your store anyway if you were not using LIAs?
  • Are you gaining market share from the competition?
  • Are these new customers and what is their lifetime value?

Vital early adopter advantage

LIAs provide the first step to a single marketing budget to cover both online and offline, allowing retailers to capture new, ‘in market’ customers, driving store footfall and potentially stealing market share. Early adopters could gain a vital advantage, understating the value to their business and capitalising on low competition and costs to establish dominance within the LIA space.

LIA is a channel tailored to mobile users and designed to increase footfall and offline sales. If someone is on the high street and looking to purchase, LIAs provide an unmissable opportunity to target them.


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