DigiMinded

Loopt Takes a Crack at Foursquare and Gowalla with Digital Scavenger Hunt

While thousands of Americans were quietly nursing their two-day New Year’s hangover, I was racing through the streets of downtown San Francisco with one eye on my iPhone and the other frantically searching for people in colorful holiday-themed costumes.

Which, if you replace the words “searching for” with “avoiding” doesn’t sound all that far from my morning commute.

But, this was not rush hour. I was participating in the Loopt Holiday Scavenger Crawl – supposedly part scavenger hunt and part pub crawl, though during the activity itself there was certainly more hunting than drinking. The premise was similar to the website SCVNGR.com (also covered by TechCrunch a few months back) in that it was – you guessed it – a scavenger hunt with mobile phones.

Participants were given game instructions and the phone number of a “Loopt Agent” to serve as the starting point for their journey. After adding the Agent as a Loopt friend, they used clues from their journal to determine where in downtown the Agent was currently located. After finding the Agent (the holiday costumes helped) they would be required to fulfill some kind of task (some examples were making a stranger laugh, reciting something Irish and calling your mother), which would earn Loopt buttons, drink tickets for the after-party and/or nothing, depending on whether the Agent had any supplies left. (By the second hour, inventory was quite low.) Answering a riddle based on the location would then get you the remaining digits of the next Agent’s phone number, and the cycle would repeat itself until the time was up.

The game itself would have benefited from working out a few kinks and simplifying the rules, but it was engaging and fun. Prior to the event I had downloaded Loopt once when I first purchased my iPhone and never touched it again, but by the end of the scavenger hunt I felt that I had a strong understanding of its features and interface. I’m not sure whether I’ll use it or not – despite my love of technology I’m not much for apps that broadcast my actual location – but there are certainly participants who may increase their usage after the event (a couple of my friends already have). A few events alone aren’t going to cause Loopt to overtake Foursquare, but it was refreshing to see some creative marketing. I’ll be interested to see what they do with the website LooptGames.com in the future.

Above everything, though, there was one previous lesson that came back to me with a smack in the face that day: iPhone batteries die damn fast when you’re using them non-stop. Ouch.

Dorthy.com: The Advent of Goal-Based Search?

The time of New Year’s resolutions is upon us. Come January 1, millions of Americans will vow to shrink their waistlines, and my gym will become a haven for the masses of fair-weather gym-goers. Spin classes will start filling up several minutes before start, crowded locker rooms will ensure the intrusion of personal space bubbles, and I will have to start fighting with passion and fury for my elliptical.

Not that I’m bitter or anything.

My personal feelings towards New Year’s resolutions aside, a personal goals startup called Dorthy.com just relaunched its site with an interesting concept that could prove useful to 2010 goal-setters.  The site allows you to create “dreampages” for each of your goals, whether it’s “to lose weight”  (Dorthy’s recent New Year’s resolution study reported that 63% of respondents were vowing to shred pounds in 2010) or “Sail around the world.” The dreampage serves as a central location for the planning, sharing and tracking of the goal.

Dorthy (which I forever want to keep spelling as Dorothy – perhaps I watched the Wizard of Oz one time many times as a child) certainly isn’t the first goal-setting website in existence.  However, its primary differentiator is that in addition to providing a place where users can articulate their goals and discuss them with like-minded users, it also provides frequently updated content from search engines around that topic – articles, blog entries, videos, etc. Dorthy claims that 50% of searches on the web are repeated by the same people day-after-day, and they can eliminate the need to keep re-Googling by providing a central location where users can return to find new resources regarding their goal.

Let’s briefly put aside the fact that it’s significantly easier to type a search in my browser toolbar than to go to Dorthy’s site, log in, and navigate to the dreampage in question. Let’s also dismiss that the website is rather clunky in its current alpha version, and that the content on my dreampage for “find a pair of skinny jeans” (screenshot below) wasn’t altogether relevant to my goal (note the video about a guy who puts on a cursed pair of ugly jeans that turn him into a mega-sketchy guy).

What I found most interesting is that Dorthy relies on three fundamental assumptions about search and human behavior:

        1) Goals are fundamentally social. This one comes as no particular surprise – it doesn’t take a psychology degree to understand that talking about one’s goals makes one more likely to achieve them by adding a layer of accountability. Additionally, there’s a classic “gym buddy” concept – when others share in your goal, supporting and motivating each other, the goal becomes easier to accomplish. Dorthy simply takes this community aspect of goals and gives it a home on the web (which, granted, 43 Things and others have been doing for years).

        2) Goals are linked to search. It makes sense the search engines service as a primary starting ground for researching and achieving goals. If I decided I were to run a marathon, I would start by researching training schedules and other aspects on Google. If my goal was to visit Peru, I would also begin my search for travel information, flights and activities on search engines. But the question is – how far in the goal process does this relationship last? Once I’ve already determined my training timeline and found the perfect running gear and my goal race, I’m less likely to be constantly searching for new marathon information

        3) Search behavior can be changed. Ahha, the concept that the good people of Microsoft bet their piggy bank on (a fraction of it, at least). Dorthy relies on the concept that it’s possible to retrain people to stop searching for things on Google and instead log into their website for updated content. Never say never, of course, but this one seems the most far-fetched. The problem is that Google is just too darn easy, and search behavior is too deeply ingrained. Breaking habits is always the marketer’s greatest challenge – not an impossible one, but nothing to sneeze at.

Regardless of whether Dorthy.com succeeds are not, it serves as another example of the growing connectivity of the internet. Search and social are being more greatly intertwined – there are countless examples of this, from sharing resources on Facebook to real-time Twitter results on Google’s search results page. Whatever developments come next, 2010 is almost certain to be a fascinating year.

It’s a great time to be in the digital world, folks.

The Fattest Guidebook You've Ever Seen

Ladies and gentleman, this post is special. Not because it's long overdue (which yes, okay, it is), but because I am writing it from my hotel in the Old Quarter of Hanoi, Vietnam.

There are a million things I could say about this crazy, hot and wonderful place (not the least of which is the fact that the food hasn't made me sick yet - yay!). However, in this post I'd prefer to focus on how I got here.

I state in my "About Me" section that I'm an information addict. I love taking masses of information and researching, categorizing and compiling all of it into something that makes sense and is meaningful. A trip like this is my favorite kind of informational challenge. From flights to hotels to sights to culture shock, there are a lot of variables. And with my love of planning (plus this being my first time in Asia), this meant research, research and more research.

It also gave me the opportunity to test run two tools I've been intrigued by. TripIt enabled me to easily compile my 8 flights and 4 hotels into an easily readable format. Allowing users to simply forward their itineraries is honestly brilliant - it makes itinerary creation a breeze. Nothing beats convenience, especially for the busy traveler. The second big win with TripIt is the community aspect. I could easily share my itinerary with the friends I was traveling with as well as other people with a vested interest in my whereabouts (i.e. Mom and Dad).

Gliider is a much newer tool, and currently is in invite-only beta status. It's a Firefox add-in that helps you compile and organize the travel information you find while surfing the web - which definitely appealed to my needs. The add-in requires you to create trips for each destination, each of which will contain folders for categories such as Flights, Hotels and Shopping. As you find useful information on a destination's topic, you can simply drag and drop the text into the appropriate folder. You can then revisit each folder at a later time. I found this particularly useful while researching and comparing hotels.

While both tools played a helpful role in my trip planning, both left me with a minor feeling of "now what?" They aren't perfect, and there many other features that could  be added to these and other tools. However, they continue to cement the essential role that the Internet plays in travel. Beyond booking flights and hotels, it allows members of the travel community to share their experiences, and for other members to research and make decisions based on this pool of experience. The Internet (and TripAdvisor) is the reason we found the Hanoi Astoria Hotel, with it's charming staff and central location. It's the world's largest guidebook, on steroids.

Now, I'm off the computer and back to the humidity - after researching a couple of sights, of course. Xin chào!

The Post-Napsterization Era: What Will Music Look Like in Another 10 Years?

 Last week the Pew Internet & American Life Project released a fascinating overview of the history and current state of the online music industry, 10 years after the birth of Napster. The full report is well worth a read, but here are some of the highlights:

• Consumers have demonstrated that they’ll generally get what they want when it comes to the digital music world, and they want their music to be free (or almost free), portable, mobile, varied (access to any song ever recorded), and remixable

• While digital sales have grown, they still make up only about a fifth of total album sales. However, 15% of adults admit to using P2P applications to download files – and the number of computers with P2P software installed keeps increasing.

• The recording industry failed miserably in their approach to digitalization. They should have turned a threat into an opportunity by buying Napster, but instead they tried to battle with lawsuits that didn’t work. Clearly people are still illegally downloading music.

• The demographics of music buyers were shifting before Napster’s launch. There was a noted decrease in music-buying by the 20-24 year old set noted in early 1999.  Research showed that music was still important to this demo, but at the time there was a disconnect between the importance of music in their lives and their need to own it.

• Most artists did not see P2P applications as a true threat to the industry. In fact, many of them choose to capitalize on it and were quite successful, such as Nine Inch Nails and Radiohead.

• DRM is dying, as indicated by the fact that Apple stopped using it with iTunes downloads at the end of 2008.

The point that I found most interesting, however, was the last paragraph:

“Looking ahead, as users’ engagement with cloud computing activities becomes more pervasive and seamless, there may come a time when the difference between downloading and streaming music files becomes moot….As more and more internet users acquire smart phones and high-speed wireless connectivity improves, music consumers get ever closer to the “celestial jukebox” dream of any song at any time that started during the days of Napster…Ultimately, whether you’re storing a library of music files on your home computer or streaming songs through your iPhone, it all becomes the same: instant access to the music you want.”

The concept of ownership is changing in our digital world. Historically, the definition of possession was rooted in tangibility. I knew that I owned a book because the paper copy resided in my bookcase, and I knew that a CD belonged to me because I could hold it in my hand. However, the content itself was not inherently tangible – only the medium in which it was packaged. If I don’t have a physical copy of a song, what defines my ownership of it? There are a few aspects, but the primary one is that I can listen to it whenever I want, in whatever form I want. I can play a song on my computer, on my iPhone, or on a burned CD in my stereo. I control when and how the content is delivered to me. That is the fundamental difference between downloaded and streaming music today.

However, as the report states, it is a logical conclusion that as technology continues to improve that divide may no longer need to exist. There will come a time when technology will be a virtual jukebox: I can listen to any song I want, as many times as I want, with only a click of a button. I won’t be limited to a library of songs that I’ve individually downloaded, or a streaming service with limited playbacks. Music discovery applications (such as Pandora today) will allow me to be as hands-on or hands-off as I wish in my listening choices. The concept of music ownership will cease to exist because I will have access to every song ever recorded, in whatever form I wanted.

Music has been heading in that direction for some time, and many subscription model services like Rhapsody and the current incarnation of Napster already look like an early form of this vision. However, there is still quite a distance to go, particularly impeded by legal issues with the record companies. Therefore a clear distinction between streamed and downloaded music still exists today.

The music industry may change in a completely different way by 2019. It will certainly require a business model that consumers, music services and record companies all agree upon. But regardless of what form it takes, music will contain to be an integral part of our culture, and the users control the game. The technology will adapt itself however we see fit.

Enough about Twitter: Let’s Talk ChaCha (Not the Dance)

Once upon a time, I briefly moonlighted as a ChaCha Guide. Not for the money, mind you – ChaCha pays a mere $0.10 to $0.20 per question answered. At the time I was an avid ChaCha user, and simply wanted to gain insight into the types of questions others were asking.

For those of you who don’t know, ChaCha is a free mobile answers service that allows people to ask questions in conversational English and receive answers via text message within 5 minutes. Users ask a question either by phone (1-800-2CHACHA) or text message (242242), which is then routed to a Guide with “expertise” on that subject. The Guide uses search engines and other resources to find the answer to the question, and then the answer is returned to the user in the form of a text. Prior to buying my iPhone I found it quite useful for getting answers to a host of questions.

As a ChaCha Guide, I saw a wide variety of questions come in. (The most recent questions are now published on their homepage, so you can check them out for yourself.) The majority seemed to be general factoids, often linked to current events – e.g. “Who won the Laker’s game last night?” Many were also utilitarian in nature, such as “Which bus do I take to get to North Beach from downtown?” or “What do you use to clean flat screen televisions?” Another type of question seemed to be geared towards settling bets with friends – if you’re debating when the first episode of The Fresh Prince of Bel Air aired, you can determine the winner without having to go home and Google it.

However, the queries I found most interesting were the ones that were conversational in nature. It seemed like many of the queries weren’t just about getting the answer to a question – they were also aimed at generating a human connection, something that Google, Bing or any other traditional search engine cannot provide. It may sound odd, but for many users there’s something almost comforting about the knowledge that they can send a text at any time and a human being somewhere will respond within minutes.

What could be next for ChaCha?

• ChaCha has a lot of data on its users. ChaCha collects the string of questions from its users, and pieces the information together to draw conclusions about each mobile number’s owner. ChaCha even has a “genderizer” function that can determine the gender based on the kinds of questions that are asked. Combining algorithmic functions like this and user-inputted values (they can submit their zip code, for example, to receive answers targeted to their location) ChaCha can make solid evaluations of a person’s age, gender, location, interests, and other attributes.
• If done right, ChaCha’s advertising program could be a goldmine. Following from the first point, ChaCha’s user data gives them the potential for serving extremely targeted ads. The key to successful text advertising is that they need to be relevant, conversational and non-obtrusive – and preferably promotional. The thing I like about ChaCha’s advertising platform is that the initial ad only takes up a small amount of characters, and if the user wants to see more info on the ad they can text a code back – it’s entirely in their control. ChaCha can also target by keywords, which seems like the best fit for much of its advertising. If a user asked which restaurant they should go to for dinner, ChaCha could serve them an ad for a local sushi spot with a coupon code. It is important to note that approximately 80% of ChaCha’s users are under the age of 25, so this certainly won’t be a fit for every advertiser, but it could work well for some.
• ChaCha has potential for real-time search. Everyone and their mother has been talking about Twitter and its application to real-time search. With the right tools ChaCha could potentially have a similar function. The main difference is that Twitter is based on broadcast, while ChaCha is based on queries. However, ChaCha still has a measure of what matters to people at a given moment. It knows that 793 people have asked how old Lebron James is and 226 people asked when the next Lakers game is. Sound a little similar to Twitter trends? Furthermore, ChaCha knows the basic attributes of a lot of these people, so instead of just saying what matters to people it could go as far as what matters to what type of people. Clearly the demographic is limited (also much like Twitter), but there could be some serious potential there.

Only time will tell the future success or failure of ChaCha. Its primary criticism is that many of the answers are not accurate, due to the human nature of the responses. And smartphones and their apps, particularly ones like Google Voice Search for the iPhone, could make ChaCha obsolete eventually. But it certainly has a solid user base, and a premise with potential for expansion. I’ll definitely be keeping tabs on this company.

Can E-Books Make it in a Social World?

My mother has discovered the joys of e-books.

I’m much to blame for this, of course. I bought her books 1,2 and 4 of a series because Borders didn’t have the third in stock, and then mentioned that if she didn’t want to wait to have it delivered she could always read it online. She’s now purchased several e-books, and I’ve found it interesting to experience them through her eyes.

I asked her if she felt like they could ever replace paper books for her, and as I expected the answer was no. What surprised me was the reason she cited for it. She likes the format, and doesn’t mind reading books on her laptop – in fact, she finds that the reading is faster when she doesn’t have to flip pages. She enjoys being able to buy books instantly, and also likes paying $9.99 for a book that is only out in hardcover (with a $25 price tag).

The primary reason that e-books won’t entirely replace her paper book collection is because she can’t easily share them with others.

I found that very interesting. It’s true that traditionally books are often a social experience; when we read a fantastic book we often pass it on to friends and family so that they too can enjoy it, and discuss it afterwards. And, with their current form and DRM policy, it is difficult for most users to legally share e-books – much like the issues the music industry has seen during its digitalization.

It’s no secret that e-books are gaining market share. eMarketer reports that Amazon Kindle revenues are on pace to nearly quadruple in 2009 compared to 2008, and accounted for approximately 10% of total North American book units sold in Q1 2009. That’s a big deal for an industry that barely existed a few years ago.

However, the Kindle faces some challenges. Amazon books can only be read on the Kindle device, which currently features a high price point ($359-$489), or on the iPhone (which still claims only about 5% of global smartphone market share). The $9.99 price for many bestsellers has also proved to be an issue for many consumers, who assume that the printing of a book makes up the majority of its production cost and therefore e-books should be much cheaper. And, Amazon has not currently addressed the inherent social nature of books – yes, you can “share” books with Kindle users if they are all on the same account, but there’s no way to digitally “lend” a book to a friend as with a hard copy. 65% of consumers stated that they still have no interest in e-books, and DRM could potentially be a large obstacle in shrinking this number.

It will be interesting to see if Google addresses this when they enter the e-book marketplace. They already have a major competitive advantage over Amazon in that Google e-books will be viewable on all devices with Internet access. Will they be able to grow e-book market share beyond the Kindle’s capabilities?

In most ways digitalization is gravitating towards more social connectivity than ever before. Internet users can easily keep in touch with high school friends that would have been long forgotten otherwise; connect with people with shared interests across the globe; express their opinion to the world and discuss it with others. Yet, the e-book industry in its current form is countering the social makeup of the Internet. What’s in store next for the world’s readers?

Could Digg’s New Model Be the Future of Online Advertising?

Digg announced on their blog that they are implementing a new ad platform with a fascinating premise:

Today, we’re announcing our plans to roll out a new advertising platform — Digg Ads. Digg Ads will give you more control over which advertisements are displayed on Digg. The more an ad is Dugg, the less the advertiser will have to pay. Conversely the more an ad is buried, the more the advertiser is charged, pricing it out of the system.

Digg Ads will appear alongside stories in the river. The sponsored content will look and feel similar to regular Digg content, but will be clearly marked as sponsored. It may link to stories, video trailers, independent product reviews – many of the same types of content you see on Digg every day. The goal here is to give advertisers a way to present content related to their brands and get immediate input on whether it’s relevant to the Digg audience, or not.

This isn’t an entirely new model (Facebook and Reddit have similar concepts), but it’s an interesting one. This is essentially the AdWords model with two twists: transparency and the ability to express a negative opinion of the ad. The average Google user barely understands the difference between sponsored and natural links, let alone the concept of quality score. Therefore, they don’t realize that by clicking on an ad they are effectively “voting” for that advertiser by increasing their clickthrough rate and quality score. Digg is taking this concept and making it completely transparent – and in the same format as the rest of their content, so user relearning will be minimal. Additionally, if users find an ad to be annoying or irrelevant they can “bury” it, which will cause the advertiser to pay more and rank lower on the page. It’s so simple it’s almost brilliant. How many times have you wanted to squash an annoying ad?

The key to this model is user empowerment. It’s the exact opposite of push advertising where consumers accept the fact that they are going to be forced to watch ads in order to view their desired content, regardless of whether they care about the ad or not. Now not only are users being targeted with ads that are more likely to appeal to them, they have the ability to control how much the advertiser pays, and how prominent the ad placement is. It seems that a natural progression from giving users control over their content would be also granting them control over their advertising.

It also puts even more pressure on advertisers to be creative and relevant in their advertising. If users hold the reigns, you need to keep them satisfied – and providing a disruptive experience will not accomplish that. Advertising will need to be increasingly tailored to the website it’s placed on in order to ensure its users will find it relevant and informative.

There will certainly be some kinks to work out. An effective “voter fraud” program will be more crucial than ever, for one thing, since number of votes will determine the media cost of advertisers. But, I think it’s an innovative concept in advertising and I’ll be very interested in how well it performs.

In my book, one thing is for sure: if Google ever adapts a system like this, the “Belly Fat” ads are going to be the first to go.

I Love Me Some Search Options

Oh Google, how could you do this to me? I was already addicted to you and your endless data. I already spoke to you more times per week than my mother and all my friends combined. I already couldn’t imagine my life without your bold primary colors gracing my computer screen. And then you had to go and make my life even….easier?
 
Those statements may be a tad dramatic, but two weeks after the launch of Google Search Options I can officially say that I’m hooked. Approximately one month ago I began my search for Halong Bay overnight cruises, which proved to be tricky. Like most tourist attractions in Vietnam there are endless scam artists and copycat companies, so I wanted to find a reputable operator with positive traveler experiences. I found myself scanning the Google SERP for only the domains of travel forums I recognized, e.g. Travelfish and Thorn Tree.  Given that I have about as much patience as a 2-year-old, this took more time than I desire d. I also became frustrated as I kept coming across posts that were 4 years old – clearly out of date given the dynamic nature of Vietnam’s tourism industry. I could have gone to Advanced Search to further refine my search, but instead I decided to give up for the time being.

Enter Search Options. This time after searching for “halong bay cruises” I was able to easily display results from only forums that were posted in the past year. In a much shorter period of time I ended up with a list of 3 reputable cruise operators within my price range based on traveler experience. Wham, bam, thank you Google.

Now, Search Options is far from perfect. I would prefer to see more result types than just Videos, Forums and Reviews. Forums and Reviews support the research end of the buying cycle, but what about users who are close to the time of purchase? What about coupon sites? Shopping sites?  Now, not all of these would make sense in the context of searches (particularly ones around people and Wikipedia articles). But, Google could do something similar to Bing  (though not as spammy) and use related search data to provide relevant categories. Additionally, I would prefer to have a date option between past week and past year (you’re missing 51 weeks in there, Google).

Regardless of its imperfections, I tip my hat to The Big G for this feature – namely because it shows real insight into the way consumers make decisions. Users react very differently to separate types of media – particularly in the area of trust. A Forrester report indicated that 60% of consumers trust product ratings and reviews from other consumers, while only 21% trust forum posts.  A separate Nielsen study echoed this with 61% of consumers trusting reviews, while only 34% indicated trust of search engine ads. Depending on the nature of the search query, it makes perfect sense that a user is often looking for specific types of websites – and Google just made it that much easier to find them.

I’d love to see more features along these lines from Google and other engines. While search is not broken, there is still significant room for improvement of the user experience. Search features should always be firmly rooted in an understanding of the way users behave and the type of information they seek. It’s certainly been an exciting couple of weeks for search given the announcements at Google I/O and Searchology – what could be next?

Summer Travel Online and the Recession: It’s Not So Bad After All

Compete and Google recently released a joint study on the consumer outlook and trends for summer online travel bookings. Despite the recession, things are still looking up for online travel. While we’re no longer seeing the 30+% growth rates of 2008, bookings recovered significantly after a bad Q4, with a 17% year-over-year growth in March. In fact, March achieved more online travel bookings than any other month in history. This trend is expected to continue throughout the summer booking season, with only 14% of consumers stating that they plan to cut back on travel this year.

A few of the other highlights from this study:

•  Not surprisingly, the amount of money spent on travel is the area where consumers expect the economy to have the biggest effect. Runner-ups are the number of trips taken, duration of trips, and the amount of time spent shopping for deals or promos.
•  Consumers are frequently traveling to destinations closer to home (27%) and destinations that they’ve previously been to, either in the past year (45%) or more than a year ago (50%). Unfortunately the study did not provide a year-over-year comparison for this data, so we can’t determine how the answers may have changed during the recession.
• Like virtually every other online travel study has found, the Internet continues to be a key component for travel research and booking. 46% of respondents rely on the Internet for travel more than in the past. 
• One of the most common recession beliefs of online marketers is that consumers are taking more time to research their purchases than in the past. Interestingly, the Compete study didn’t show much of a difference. In 2009 will spend 2.6 weeks researching prior to booking summer travel (compared to 2.5 weeks in 2008), and the time between booking date and travel date has decreased from 15.8 weeks to 15.5 weeks. This isn’t nearly as great as an effect as I would have expected.
• The most appealing deals are discounts for advance purchase, free “extras” or “add ons,” and free nights for multi-night trips. The least appealing are credits toward future purchases, discounts for bundle packages, and gift cards to partners or affiliates.

While nothing in this study is truly groundbreaking, it does provide some interesting insights regarding the effects of the recession on summer travel. The key takeaways are that consumers are still booking vacations but are more price-conscious, and promotions are crucial. Consumers especially respond to special rates that reward them for booking early, as well as promotions that add value to their travel for the same cost, such as free breakfast or tickets to attractions. Now more than ever it is imperative that travel marketers be creative in the value that they are providing to consumers.

Thinking Before They Buy: The Role of the Internet in Consumer Research

I realized today that I am one of the very people that the search marketer in me is somewhat perplexed by. My space heater broke this morning, and given that my apartment’s built-in heater is useless and it was so cold in my bedroom that I could see my breath, I felt the need to begin researching a new purchase immediately. So, what did I do?  Half-asleep and freezing, I went to Google, searched for the first store that I knew would sell them (Bed, Bath & Beyond), and clicked on their paid listing without thought. (Unusual for me –  the knowledge of CPCs is so ingrained that I rarely click on paid ads without reason, even if it’s on a branded term and not one of my clients.) I searched through the products on their site, selected one that satisfied me based on its reviews and features, and made plans to purchase it at my local store (after costing them the price of a click, albeit a cheap one). I had an immediate need for the product (coldness), and before going to the store I did what came naturally to me: I researched it online.

One of the holy grails of online marketing for brick-and-mortar retailers is understanding the relationship between the online and offline activities of its consumers. Bed, Bath & Beyond will never know that my particular purchase originated with a Google search, and they aren’t alone – few, if any, companies have found an accurate and comprehensive method of measuring this kind of behavior. However, the information that is available indicates that this relationship is strong enough that it cannot be ignored.

A study released by Google and Compete via webinar in October attempted to evaluate the relationship between paid search clicks and in-store retail behavior by monitoring clicks to leading retail websites and surveying consumers who clicked about their post-search purchase behavior.  Among other things this study found that, depending on the vertical, up to 43% of online shoppers purchase in-store. (This percentage was highest for mass merchants and lowest for sporting goods retailers, which is likely influenced by the availability of offline locations.) Another Google study on consumer intentions found that the Internet will play a role in 86% of holiday purchases, and 54% of consumers are likely to research a product online and then purchase it in-store this season. And yet another study, this one published by Nielsen Online, found that even with the fairly low-consideration purchase of pet food, 44% of respondents had visited a website with the intent of learning about pet food. Additionally, 64% of consumer electronics buyers who visited a local store to research their purchase also researched it on the Internet. This data combined with sheer logic indicates that a significant portion of consumers are doing exactly what I did: searching online and buying in-store.

A good online marketer will not be frustrated by this subset of consumers, but will aim to understand them and use this knowledge to their advantage. Regardless of whether a customer goes straight to your store or costs you a click first, they are still a customer. Eliminating as many barriers to purchase as possible will result in success in both e-commerce and brick-and-mortar. Borders is one company that does this well – if a customer wants a particular book today, they can search for it on Borders.com, read the description to make sure it’s what they want, and then see which local stores currently have it in stock. It’s quick, easy, and saves them an empty-handed trip to the store – thus utilizing their website to increase the overall probability of purchase.

Given the state of the economy, it’s more important than ever that retailers focus on understanding and leveraging the online and offline behaviors of their customers. What are some other ways this can be done?