Google Driving In-Store Sales with 'Offer Ads'

Fresh off its anointing as the king of mobile advertising by IDC, Google is starting to expose some interesting mobile advertising case studies. The first of these (or perhaps the latest) is one involving Adidas using mobile offers to drive in-store traffic or "footfalls," as they say in the UK.

A description of the campaign: 

In their ad, the company [Adidas] offered customers 15% off purchases made in an Adidas store of $75 or more. Interested users could store the offer either via email or SMS.

In addition to the coupon, the ad also provided a phone number and map of a local Adidas store, giving consumers all they would need to go in-store, redeem the offer and make a purchase.

Results:

With a click-through rate 28% higher than their past mobile advertising, the mobile Offers Ads campaign doubled in-store coupon redemption and increased the average in-store order value.

Google says that it's now extending offers "to desktop computers" (general PC AdWords). These offer-based ads employ the same CPC model as other AdWords types. Advertisers are charged when users click on these ads/offers. 

There are many interesting things about this. One is the business model: Google could move off it's click-based billing here. It could charge based on leads or a per-user bounty. But CPC pricing makes it simple for everyone. 

Another very interesting thing is the extension of Offer Ads to the PC. This move provides a new way to track online-offline activity within AdWords. While there's not a true "closed loop," the clicking on or capture of an offer will strongly imply (like calls) that users will be going to local stores to redeem. 

Another interesting thing is the way in which mobile ads are starting to influence PC-based ads. I would expect most national retailers and some categories of local businesses to experiment with and advantage of Offer Ads as it rolls out more broadly.