Sweden has come far when it comes to online advertising: More than 50% of all advertising investments were in online advertising in 2018. Mobile advertising in particular is showing rapid growth. At the same time, advertisers are struggling to find ROI in online advertising activities.
Meanwhile e-commerce has stirred up the retail industry. New opportunities of business are thriving, and the customer journey looks quite a bit different than just 10 years ago. Sweden is a country that has become increasingly digital, but e-commerce surprisingly accounts for only 9.8% of total retail sales. When it comes to grocery retail, the figures are even lower: Only 2% shop for groceries online in Sweden.
It seems like we still love our physical stores, but have retailers forgotten how to make customers walk through their doors?
With these huge investments made in online advertising and an enormous potential for driving clients to physical stores, Schibsted wanted to research the effects of mobile advertising on actual grocery retail purchases. In January 2019, Schibsted started a project with Retail Academics Research Institute and ICA, which is Sweden’s leading grocery retail chain with shops ranging from local convenience stores to huge hypermarkets.
We wanted to go all the way with this research — from exposing the mobile ad on our news Web sites to actually seeing what it delivered for the bottom line for retailers. With precise geographical targeting, we could get the local grocery stores’ offers out in their local areas. But doing this research on our own would make it full of bias. We needed a trustworthy, academic, and independent partner. This is why we chose to work with Retail Academic Research Institute, which is the top retail insights and consulting business in Scandinavia.
In Sweden, local grocery offers are typically delivered weekly and through mail flyers, which still make up 10% of total advertising investments in Sweden. We are very traditional when it comes to consuming grocery offers. Television commercials, SEM, and in-store activities are other ways of marketing offers. This is where publishers that reach seven out of 10 Swedes weekly through our news Web sites have a huge potential of reminding and informing our readers of relevant grocery offers.
Earlier research proved mobile advertising works best when the message is not too complicated. Therefore, we only have one or two seconds to make an impression with mobile banners for our readers. Research also shows the well-known brands tend to perform best on sales driving marketing with mobile advertising.
The research we conducted was extensive. We tracked sales at six ICA Maxi Hypermarkets for just under three months. Using an academically proven research method, we isolated the effects on sales and store traffic and could exclude seasonal variations, weather, salary, and other factors. The data collected came from more than 700 interviews, 2,000 surveys, and 5,000 store receipts.
The results were groundbreaking and presented to the grocery retail and FMCG industry in summer 2019.
By switching our readers’ mindsets to find local offers at our news Web sites, store sales grew by 14% for the advertised products in addition to other marketing activities. The total amount of sold items also increased by 15%, proving mobile advertising actually drives sales.
Further, the results showed there was a big difference in age groups. Consumers up to the age of 49 years had a significantly more positive attitude toward mobile ads and a higher purchase intent than those over 49 years of age. This kills the perception that mobile advertising only works for the really young crowd and that retailers need to start addressing this huge group of potential consumers.
In addition, research showed the mobile ads also increased store traffic marginally, yet good enough to convince a highly “non-digital” group of retailers to start investing more in mobile advertising.
Innovation for publishers does not always have to start with offering new ad formats. Instead, it can be used in innovative ways for research to prove what our news Web sites actually deliver in ROI for our advertising clients.