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com
CONTACT a Yahoo! Account Executive today to learn what Search and Display can do for your business.
Copyright 2007 Yahoo! Inc. All rights reserved.
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The Internet has had a major impact on the consumer shopping experience. While consumers have the
option to purchase online, the majority of shoppers turn to the Internet to pre-shop for information
about products before they head into the store to make a purchase. They have begun the shopping
process without you or your sales team having even met them. And research demonstrates that these
pre-shoppers who are exposed to online advertising may be among the most valuable customers for
a retailer.
From April 2006 to January 2007, Yahoo! partnered with comScore to study the impact of search
marketing and display advertising on consumer shopping behavior and the in-store sales of
major retailers. The study involved more than 175,000 panelists and compared the behavior of
those exposed to online advertising versus those who were not exposed. The resulting in-store
purchases were observed at five major retail stores from diverse segments including major national
department stores, a major apparel retailer, and one of the worlds largest sellers of office products.
The campaigns generated more than $10.5B in total revenue for our advertisers, of which $2.4B was
incremental revenue.
Following are the results of the study.
The JC Penney website is our shopping hub
for consumers whether theyre planning to buy
online or in-store. Therefore, we are continually
focused on developing online marketing and
merchandising programs that help us understand
the relationship between our customers online
engagement and our in-store sales.

Dave Abbot
Vice President of Marketing
JC Penney

Research Online, Buy Offline:

The Impact of Online Pre-Shopping on Consumer Shopping Behavior
Copyright 2007 Yahoo! Inc. All rights reserved.
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continued | page 2
continued
In-store sales start online.
Years ago, shopping was an in-store event. Today many people are going online to research products and
pre-shop before they even step foot in a store. In fact, according to BIG Research, 89% of consumers
making in-store purchases in key retail categories have conducted online research prior to purchase.
2
This
pre-shopping behavior, while relatively new, has
become a common activity prior to a variety of
purchasesboth large and small. According to
the study, when pre-shopping consumers are
exposed to online advertising (search listings
or display ads or both) they engage at a deeper
level with your web site, viewing an average of
6 more pages than those not exposed, a 53%
increase.
In the study, these more highly engaged, online
advertising exposed consumers demonstrated
a much stronger propensity to make a
purchase, resulting in a 43% lift in total revenue,
of which 88% of the sales revenue generated
from the online advertising budget was from
consumers that purchased in the physical store.
Additionally, this online advertising exposed
consumer may be your most valuable
consumer, as a Forrester Research study noted
that 45% of consumers who research online buy additional products in-store when they buy the product
they researched online.
3
The results of this study demonstrate that those exposed to online advertising
spend an average of 29% more on their in-store purchase than those who are not exposed.
Online advertising drives in-store
sales at a 6:1 ratio to online sales.
Most retailers know that online advertising drives
online sales. According to this study, online
advertising drives in-store sales at a much higher
rate than online sales, indicating the value of online
advertising is perhaps many times greater than
currently recognized.
$1
OnIine advertising drives in-store saIes FlG 2

$6
ln-Stor
Rvnu
Onlin
Rvnu
6 to 1

Li Vs. Ccnrc Crco

1 Research Online, Buy Offline: The Impact of Online Pre-Shopping on Consumer Shopping
Behavior, Yahoo! and comScore, 2007
2 BIG Research, 2007
3 Forrester State of Retailing Online, 2007
Copyright 2007 Yahoo! Inc. All rights reserved.
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When factoring in only online revenue,
the cost as a percent of revenue
for online advertising averaged
approximately 11%. When you factor
in the full impact of online advertising
on in-store purchase behavior, the
cost as a percent of revenue for
online advertising is more accurately
calculated at 0.5%.
4
Search marketing plus
display advertising can drive higher return.
This study examined the individual impact of search marketing, the individual impact of display
advertising and the synergistic impact of an integration of search and display.
Search marketing has a greater impact on in-store sales lift, three times that of display advertising.
When consumers in the study were exposed to search only, on average they spent $16 in the store for
every $1 they spent online. However, the number of consumers reached via search is much smaller than
display, creating a relatively small pool
of pre-shoppers with a relatively high
propensity to purchase in-store.
Display advertising has a greater
impact on total in-store sales volume,
with three times the reach as search
marketing. Consumers exposed to
display advertising spent an average
of $6 in the store for every $1 they
spent online. In other words, display
advertising drives three times the in-
store sales volume while search drives
three times the in-store sales lift.
While both search marketing and online display advertising can demonstrate significant value in driving
sales, our study showed that the sales impact of an integrated search and display campaign is significantly
stronger than either channel used in isolation. This study demonstrates that exposing consumers to both
search and display can result in significantly higher lifts in site engagement, in-store purchasers, their
average order size, and subsequently the total in-store sales revenue.
continued | page 3
continued
TraditionaI
Search CPR
OnIine Ad Spend
!ncrementaI OnIine
Revenue
HoIistic
Search CPR
OnIine Ad Spend
(!ncrementaI OnIine
+ OffIine Revenue)
0.5%
FlG 3 OnIine Advertising can be a highIy cost
effective way to drive in-store saIes
C
o
s
t

P

r

R

n
u

& 4
11%
Search &
DispIay
Search DispIay
Lift in !n-Store
Purchasers
43% 2c% c%
Lift in PaQes Viewed 68% -c% o%
Lift in $ Per Purchaser:
!n-Store
83% 2c% %
Lift in !ncrementaI
!n-Store DoIIars
9D% -o% o%
Search pIus dispIay drives significantIy
higher saIes and onIine engagement

FlG 4
1 Research Online, Buy Offline: The Impact of Online Pre-Shopping on Consumer Shopping
Behavior, Yahoo! and comScore, 2007
4 Cost assumptions made based on YSM pricing for top retail search terms.
advertising.yahoo.com 866-924-6676 retail.search@yahoo-inc.com
CONTACT a Yahoo! Account Executive today to learn what Search and Display can do for your business.
Copyright 2007 Yahoo! Inc. All rights reserved.
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Implications for Marketers
The results of this study indicate that the availability of product and retailer information online, as well
as exposure to online advertising, is fundamentally changing the way consumers shop. Its important for
retailers to understand the full impact their online presenceas well as their competitors presencemay
have on consumer in-store behavior.
Retail marketers now have the tools needed to more accurately measure and compare online marketing
ROI to more traditional media ROI. By factoring the in-store sales impact, you account for the full value
of your online marketing program. This includes displays strength in reach and searchs strength in lift.
Retailers should carefully evaluate their online marketing mix to ensure an optimal integration of both
search and display. Marketers should consider increased usage of behaviorally targeted online display ads
for maximum impact.
Our online marketing tools can provide a significant opportunity for your ads to get in front of the right
consumer at the right time with the right product. As these research heavy consumers engage with your
products online, you can influence their eventual in-store purchase. In order to maximize the opportunity
for consumers to pre-shop your products, retailers need to think beyond e-commerce when designing
their websites and advertising landing pagesthey should consider the needs of consumers for pre-
shopping destinationsengaging and informative websites that offer in-depth product information,
consumer reviews, a variety of visuals, product comparison tools, opportunities to check local in-store
inventories online, and other interactive tools that provide consumers ways to engage at a deeper level
with your brand and your products.