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Google Closing The Loop With New “Offer Rewards” Program

Greg Sterling on March 27, 2012 at 12:19 pm

Google has for a long time been looking for ways to connect the dots between online ads and offline transactions, where most conversions take place, to provide marketers with a more complete picture of ad performance. Click to Call is one example off this effort. Google Wallet is another. However the data Google collects through Wallet is incomplete.

Starting today Google is testing a more comprehensive approach to offline purchase tracking that involves consumers registering a credit card to receive automatic rewards — thereby enabling tracking from the online promotion to offline redemption. The program is called “Google Offers with Rewards.” It’s an extension of the current Google Offers program.

As a basic matter it aims to help Google Offers merchants generate repeat business with a loyalty mechanism. It also provides analytics that will give merchants greater clarity on the efficacy of Google Offers. But it’s also part of Google’s larger online-offline analytics project.

A small number of Bay Area businesses are participating in what was characterized to me as a trial:

These businesses have all run Google Offers. Google will be emailing the consumer-buyers of those Offers with a loyalty opportunity (see image above). The idea is after some number of visits the consumer will get the designated reward. Merchants will have flexibility to determine conditions of the reward (e.g., number of visits) and the value of the reward itself.

In the scenario on the graphic above, the user will get an $8 “rebate” on her credit card bill after two visits to Sonoma Chicken Coop. In order for that to happen, however, consumers first need to register a credit card with Google and use that credit card in the store.

During the trial period MasterCard is the exclusive payment card. However Google will allow any credit card to be used in the future.

The user saves the offer to her account. If there’s no card registered with Google, it will prompt users to do so at the time. The offer is then automatically applied to the in-store transaction later, whether or not the user remembers the existence of the offer.

The in-store transaction information is later sent by MasterCard to Google, which then shows aggregate data to merchants. Offers saved vs. redeemed will be like the offline version of impressions and clicks.

I asked Google about disclosures and privacy and they said they were going to offer very clear disclosures and be very mindful of the financial and privacy issues. (It’s another area for critics to potentially assail the company.)

Assuming the program is a success and expands to all Offers merchants Google would have created a potentially powerful loyalty mechanism in its Offers program. Google and merchants will also gain significant data on offline consumer response and purchase activity that they wouldn’t have had.

The benefit to consumers is that there’s no paper or even electronic coupon to redeem or show at the register. The clerk or salesperson doesn’t have to enter any codes or otherwise track redemptions. The discount is automatically delivered on the credit card statement after the store visit. It’s nearly “frictionless” for everyone involved.

Google sees this registered credit card offline purchase paradigm expanding to other types of ads in the future. The initial goal is to deliver obvious value to consumers and get them to opt-in to the program. The delivery of the value in the form of a rebate on the credit card statement motivates consumers to use the registered card for the transaction.

Google is then able to track an online promotion all the way to the point of sale and capture extremely valuable data for itself and advertisers. In the future multiple types of ads may utilize this functionality. Right now, however, it’s being tested in the context of Google Offers. But search-based Offer Ads or even display ads could feature this type of arrangement in the not-too-distant future.

If Google is successful in getting consumers to participate — which they will for tangible rewards — it will have created a very powerful capability for both advertisers and consumers. And it will have truly “closed the loop” between online promotions and offline purchases — the “holy grail” for digital marketers.

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About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.