1. Rethinking path to
and from purchase
Prof. Koen Pauwels

2. From impressions to expressions
• “A lot of us remember when the role of the
CMO was much simpler. Information flowed in
one direction: from companies to consumers.
When we drew up our plans and budgets, the
key metric was consumer impressions: how
many people would see, hear or read our ad?”
Joe Tripodi, Chief Marketing and Commercial
Officer, Coca-Cola, 2011

3. Like
TV Sales
Paid
Search
Unlike
Price
Distribution
Websites
Visits
Now online media even drive toilet tissue sales!
Srinivasan, Rutz
and Pauwels 2015

4. Reaching the right customer with the
right offer at the right time …

5. Past Metaphor: The purchase funnel
Purchase LoyaltyConsiderationAwareness

6. Consideration
Initial
Consideration
Set
Moment of
Decision
Loyalty Loop
Post Purchase Experience
Ongoing process
Active Evaluation
Information gathering, shopping
McKinsey 2009
The Consumer Decision
Journey
Has the Web made the funnel fat?
Purchase LoyaltyAwareness

7. And how about path from purchase?
• Prospective customer may postpone purchase
because they feel overwhelmed or uncertain
• Satisfied customers unsubscribe because they
feel overwhelmed by marketing/’relationship’

8. But do consumers really
• Switch brands near the end
of the purchase process?
• Change their feelings online ?
• Have these feelings best
captured by online metrics ?

9. It depends
So what is the evidence?
1) From individual search data
2) From aggregate metrics
And what future research do we need?
3) Including controlled experiments

10. Search for cameras (Bronnenberg et al. 2016)
• Consumer finds choice in mid to late search,
stays close to mean of early search attributes,
later narrows search for each attribute.
• % of search/site visits represents % of choice
• Consumer revisits the chosen product
• Generic search more at start, but only 7%
Branded Search more often later: up to 97%

11. But Search varies across categories
Cars, insurance: search starts
3 months before purchase
(Lecinski, Google 2011)
Groceries: search, if any, on same day as purchase
So when should paid or
owned media work best?

12. and Across Brands
• Ineffectiveness of paid search for
Heralded as ‘Paid is dead’
• But paid and multiple touchpoints synergy
should be key for less familiar brands such as

13. Explained from theory (Pauwels et al. 2016)
• Goods differ in knowledge consumers need:
a) Experience good: deep, trusted info (Nelson 1974)
b) Search good: fast info by search (Erdem et al 1999)
• Low familiarity lifts need for cross-channel media:
a) Tough to build brands online (Erdem 1999, Sandom 2010)
unfamiliar brands need online + offline media
b) Familiar brands leverage within-online synergies

14. With marketing effect implications
Experience goods
(services)
Search goods
(products)
Unfamiliar
brand
Elasticity: Owned > Paid
Synergy: Cross > Within-online
Synergy: Cross-channel >
Within online synergy
Familiar
brand
Elasticity: Owned > Paid
Synergy: Within online > Cross
Elasticity: Paid > Owned
Synergy: Within online > Cross

15. Driven by reach & trust of media
Source: Nielsen (2013) survey across continents

16. Our findings confirm hypotheses
• Owned > paid media if high enduring involvement
(e.g. fashion, GMAT testing) but paid > owned if
need only at specifictime (e.g. furniture, toaster )
• Cross-channel synergy higher than within-online
synergy for unfamiliar brands, within-online
synergy highest for familiar brands
• Earned media highest elasticity across conditions

17. and give managers specific advice
Experience (Service) Search (Product)
Unfamiliar
brand
Owned (and Earned) key to purchase
Spend on offline media for synergy
Owned key to Purchase
Spend on offline media for synergy
Familiar
brand
Owned key to purchase
Spend within online for synergy
Paid (and Earned) key to purchase
Spend within online for synergy

18. Initiated by:
Content
Separated
Content
Integrated
Firm
Email, TV
PR, product
placement
Customer
Retarget
SEA
Affiliate
SEO
OK, but which paid online actions?
DeHaan, Wiesel and Pauwels 2016

19. Integrated: the category (TV) the
consumer comes to the site for
Separated:
other
categories

20. Content Integration best in later stages

21. and differ by conditions :
• Among Content-integrated ads:
Affiliate sites if high involvement
(e.g. shoes, fashion, cars, alcohol)
Paid search, price comparison site if
high need NOW (e.g. refrigerator)
• Among Content-Separated (e.g. retargeting)
When mood of website matches your offer
21

22. Implications for marketing?
• Positioning and targeting less important as
consumers rely less on marketing.
• Let the market sort out user segments
• Metrics like Customer Lifetime Value (to justify
customer acquisition costs) less useful
• Instead of brand perceptions, preference,
loyalty, track online metrics (Simonson 2016)

23. But no perfect mindset metric:
Online metrics
• Unobtrusive
• At time of interest
in the category
• What? Where?
• Often platform-owned
Classic Surveys
• Representative
• At regular intervals,
providing time series
• Why, to what extent?
• Often Customized

24. MSI best paper (Pauwels and van Ewijk 2013)
1) How much do classic funnel metrics and online
journey metrics explain and predict brand sales?
2) Does it differ by involvement and brand spent?
3) How can managers affect metrics that matter most?
36 brands in 15 categories: durables (cars), services
(internet, energy, travel, lodging, insurance), food
(cheese, butter, snacks, candy, dairy, beer, soft drink)
non-food (tissue, sanitary napkins) packaged goods

25. All variables endogenous in the Dynamic System
Accounts for
short and long
term effectsVolume sales
Environment
Marketing
Price Promotion
Distribution Advertising
Classic
funnel
Loyalty
Preference
Awareness
Consideration
Intention
Online
Journey
Owned
Paid
Earned

26. General Results
1) Classic funnel still matters, but online journey
metrics substantially add to sales explanation
2) Classic Awareness drives search clicks and site
visits, but is also driven by these online metrics

27. Classic ‘mid-funnel’ less effective
0.28%
0.02%
0.07%
0.20%
0.17%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
Awareness Consider Preference Buying
intention
Loyalty
Consider, Preference, Buying intention and Loyalty matter less than Awareness
Consumers need to be aware, then look online!
How to read? If
awareness
increases by 1%,
volumes sales
increase on
average by .28%

28. Moderators: involvement, online spent
• Online Journey metrics matter more:
a) The higher category involvement
b) The higher % of brand budget spent online
‘Best’ combination of classic funnel
and online metrics is
category and brand specific

29. Integrate slow moving attitudes and
fast online actions (Pauwels & van Ewijk 2013)
Web visits
KNOW
COGNITION
Aware
Consider
Buy
LIKE
Click
Visit
AFFECT
Prefer
Loyalty
Experience
& Express
DO
Search

30. TV best offline action to lift online behavior, even
outperforms online on pageviews & social media
.17 .17 .17
.25
.19
.74
.07
.95
.71
.51
.41
0
.70
.20
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
TV Online
How to read? If
TV expenditures
increase by 1%,
# website visits
increase on
average by .25%

31. Marketing effects vary by stage
• Display ads in early stages funnel, search
throughout the journey (Abhishek et al. 2012)
• Content-integrated ads same traffic impact as
content-separated, but much better conversion
(DeHaan et al. 2016)
• TV ads lift branded search, conversion, eWOM,
page views (Joo et al. 2016, Pauwels & van Ewijk 2013)

32. And continue to show trade-offs
• Persuasiveness drops 10% with each 1M
extra views if provocative ad (Tucker 2016)
• Digital does not change “richness versus
reach” tradeoff - just alters the parameters.
• There is still a role for paid media
• But pointless to persuade consumers about
quality: they go to others (Simonson 2016)

33. Initial
Consideration
Set
Moment of
Decision
Loyalty Loop
Post Purchase Experience
Ongoing process
Active Evaluation
Information gathering, shopping
Implying new marketing objectives
Get consumer familiar
with your brand
Advertising general,
contextual or
category-based.
Incidental contacts
with earned media
(PR and Social)
Re-confirm purchase: listen to feedback via earned media
Resist temptation to over-contact lest customer unsubscribes
Ensure you are found and respected online: when consumer drops by
website, help with info access, paid ads focus on behavioral targeting
Persuade consumer
With Promo, Ads

34. Did funnel hips really get larger ?
• Pauwels & van Ewijk (2013), Simonson (2016)
argue that mid-funnel metrics less predictive
of purchase and less sensitive to marketing
• Instead the more trusted opinion of others is
key and now readily available in social media
• Tested in large scale stock market study with
daily mindset metrics, owned + social media

35. Owned media works top & bottom
Stock
Returns
Stock
Risk
Owned
Positive WOM
Advocacy
Intent
Aware
Negative WOM
Colicev, Malshe
and Pauwels,
Revising for JM

36. Helps get route awareness, not intent

37. Why do we need experiments?
• Self-selection bias: it’s not just that consumers
have to click on a search or display ad, they
also have to visit the website displaying the ad
• Context matters: on which site, device, where
with which creative, extent of exposure, …
• Personalization technologies allow us to show
multiple messages, and then choose best one

38. Real-time feedback: the multi armed bandit

39. Consumer behavior changes online
• Going from more to less mobile device (phone
to PC) doubles conversion (DeHaan et al. 2015)
• Talking about purchase on social media
increases store traffic (Pauwels et al. 2016)
• Social media critics buy more (Weiger et al. 2016)
• Touching product on device feels like owning it

40. Touching feels like ownership
Touchscreen devices give this touch (Basel 2016)
So Focus decision on concrete product attributes
For fast moving goods, interface touch suffices

41. Future research needed on
• Mapping of classic to online metrics
• Under which conditions do consumers change
thoughts, feelings and decisions online ?
• What are the implications for consumers,
for managers and for society ?
Questions?

42. • Contact me at koen.h.pauwels@gmail.com
• LinkedIn/Twitter handle: koenhpauwels
• My blog: https://analyticdashboards.wordpress.com
• Professional Facebook page:
https://www.facebook.com/pages/Smarter-Marketing-
with-Analytics-Dashboards/586717581359393
• And check out my practical book:
It’s not the Size of the Data, it is How You Use it:
Smarter Marketing with Analytics & Dashboards
Want to learn more?