Retailing The Inside Story Online and Social Promotion May Represent Fruitful Areas for the Future, But It's Complicated to Say the Least No one can argue that the Internet, and particularly social networking (or social), represents fertile opportunities for retailers seeking to increase their traffic and/or conversion rates through promotion. In order for any promotion to have a chance at success, it must have significant coverage (as defined within this chapter), and the Internet, particularly social, offers great coverage potential. A report released at the end of 2011 by Nielsen found that social networking and blogs account for one-quarter of all time spent online. Nearly 80 percent of all Internet users visit social networks, with Facebook being not only the most visited of all social sites as of June 2012 (more than three times as many unique monthly visitors, at 800 million, than the next most popular, Twitter with approximately 250 million, and more than 10 times that of MySpace, 70.5 million, and Google+, 65 million), but also the U.S. website Americans spend the most time on per year. But the coverage (or even reachalso defined within this chapter) afforded by social and other forms of Internet promotion aren't necessarily enough to ensure a retailer's promotional spending is fruitful, particularly for all but the pure-play e-tailer (one whose entire business occurs online). Sure banner ads and click-through media, particularly those that are pay-per-click (PPC) wherein the advertiser (i.e., retailer) only pays for an advertisement once it is clicked, offer great efficiency, but traditional brick-and-mortar retailers can't track promotions via click-through rates. Tracking the metaphorical journey of an online promotion to a physical retail store requires significantly more planning and thought. One result of the Great Recession of 2009 is that consumers are searching for, clipping, and redeeming more Internet coupons than ever before; 92 percent more coupons are clipped than in the years prior to the recession, and of those clipped, significantly more are actually redeemed within stores (a 360 percent increase in redemption since the end of the recession). This is great for all types of retailers as a recent study by Experian Marketing Services found that online coupons translate into significantly larger transaction sizes than average. The problem is identifying where the consumer was exposed to the coupon or other promotional materials. Unless a brick-and-mortar retailer varies the types of coupons or promotional offers across every avenue a potential customer might use to come in contact with the retailer's promotion (e.g., using a 10-percent off coupon on Facebook, a buy-one-get-one-free certificate via email, and a free alterations package via Twitter), that retailer will be unable to determine which medium is best for generating the desired action (e.g., sales). Alternatively, the retailer could attach different codes or identifiers to each coupon based upon where the coupon is placed online in order to track where the customer came in contact with the promotion, but as we discuss throughout this chapter, promotions are not simply concerned with discounts and coupons. Greater difficulty for all but the pure-play retailers arises when one wants to understand whether the addition of a new series of banner advertisements on Facebook or blog sites boosts one's sales figures. For example, True Value Hardware Company had been running a $5-off campaign on all purchases over $25 since 2007, and while the campaign led to significantly larger transaction sizes within its stores (an average of $40 without coupons and $46 with coupons), it was unable to understand which coupon placements were best given particular promotional objectives (e.g., which sites were best to use in order to increase traffic within its downtown, urban stores versus its more rural stores) and which were actually failing to generate significant increases in traffic for the money invested. As a result, True Value turned to RevTrax tracking solutions, whose expertise is tracking and measuring the impact of digital media and promotions for brick-and-mortar retailers. Yet, that is unlikely to be enough in the long-run, particularly if True Value seeks to understand the impact of its non-sales-promotion oriented campaigns. More recent digital solutions, like ClearSaleing's Barometer, are beginning to be developed in order to fill perceived gaps left by the existing tracking software systems (e.g., their focus primarily on online couponing and discounts). Introduced at the end of 2011, Barometer is one of the earliest software-platforms that seeks to tease-out the individual effects of any one marketing or promotional activity with the use of simulation software. Using three individual indices as a base for its software (i.e., economic, social, and firm-specific factors), Barometer controls for general market factors that might increase or decrease a firm's sales in the absence of any promotional activity, and once done, factors in the realized difference in sales to determine the effectiveness of any one promotional campaign. Keeping with the home improvement example, assume that a home-improvement retailer opts to begin a new banner advertising campaign. If the housing market is growing at 2 percent and the retailer's sales are growing at 3 percent, it knows that it is outperforming the market, but it's unlikely to know exactly what portion of the gain is due to the banner advertisements. Barometer seeks to isolate these factors by applying advanced statistics and modeling to the data and calculations and segregating the influence of a company's advertising and marketing efforts from the impact of broader industry and market conditions. Only then can it begin to understand the effectiveness of the banner advertisement itself. As the preceding discussion highlights, online promotion represents a significant opportunity for retailers in the future, given the dramatic increase in online usage within the United States; however, it does have its pitfalls when it comes to effectively measuring how impactful a retailer's promotional spending is on its bottom line. Retailers of the future will be looking for young and inspiring minds to address these problems, and perhaps you, the reader, will be the one to come up with a better solution.

Title: Online and Social Promotion May Represent Fruitful Areas of the Future- Read the article. There are some pitfalls to online promotions. How would you measure the impact of this marketing tool? What is one way to measure promotion? How do you think online promotion will change in the future?