The Home Depot Earns 8X In-Store ROI with Mobile Display Ads

Home Depot got powerful results when it used location extensions for display ads to
reach home and garden enthusiasts on mobile. The brand reached consumers in their
intent-rich moments—when they were looking for outdoor garden products—and brought
them into nearby stores.

The Home Depot® became the world’s largest home improvement retailer by giving
consumers just what they need in their I-want-to-buy-it moments.

With the rise of mobile, Home Depot has had to rethink the way it meets the needs
of those consumers. "Consumers are walking around with supercomputers in their
pockets," says Umut Dincer, Director of Online Marketing for Home Depot. "They
expect more of us in their moments of need—so now we’re using mobile technology to
deliver on those expectations."

Even with the growth of e-commerce, most of Home Depot’s consumers still prefer to
come into local stores: 94% of the company’s sales take place there. “In-store
consumers simply buy more,” says Dincer. "They find products they need that they
may not have thought of when they were at home. It’s also where our consumers will
find our ‘secret weapon’—our 385,000 friendly sales associates who can help them
find exactly what they need."

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The Home Depot team has worked closely with Google to optimize their omnichannel
strategy. They have crafted a robust local strategy through mobile search ads and
measured the impact of these ads through Google data to measure store visits driven by ads, as well as store sales data
to track transactions influenced by mobile. That’s how they learned that in the
past year, over 1 in 3 people who clicked on a mobile search ad had visited their
store and 36% of their in-store revenue during peak periods was driven by mobile.

Reaching Local Do-It-Yourselfers

With these insights in hand, Home Depot decided to complement its local search
strategy with Google’s new mobile location extensions for display to bring more
consumers into stores. Location extensions for display are interstitial and banner
ads that show local store information like address, phone number, and directions,
generated dynamically.

Early in 2016, Home Depot tested the ads with a popular in-store category: outdoor
garden and lifestyle products like plants, mulch, and patio furniture. Home Depot
wanted to:

• Reach people who were interested in gardening and outdoor goods
• Show them that products they wanted were available at a nearby Home Depot
• Help them find that nearby store

Home Depot customized the ads to reach consumers who were within 15 miles of a Home
Depot store. And not just any consumers: The Home Depot team combined local
targeting with Google’s audience data to show these ads specifically to
do-it-yourselfers and home decor enthusiasts.

The ads ran for four weeks in the areas around Home Depot’s 20 highest-volume
stores. Consumers browsing nearby on their smartphones saw dynamically-generated
mobile ads designed just for them, with colorful visuals, directions, and details
about their nearby Home Depot.

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"We know that our busy consumers are looking for answers quickly," says Dincer. “We
used Google’s most relevant products—in this case location based ads and
technologies—to be there for our consumers at just the right time when they were
looking for garden products that we sell.”

“Mobile location extensions for display really proved their worth very quickly.
We’re able to reach do-it-yourselfers who are close to our stores and make a
just-in-time connection that brings them the information they really want in their
I-want-to-buy-it moments.”

Measuring Impact

Reaching the right audience with relevant information was only the first step for
Home Depot. They also needed to measure the results from online to offline to get a
holistic understanding of how omnichannel shoppers move across channels on their
path to purchase.

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Home Depot used Google store sales data to measure how their mobile messages drove
in-store transactions from the shopper. “In the past, we had relied on traditional
metrics like impressions, clicks, and online sales to calculate the value of
mobile. But Google store sales data lets us see much more clearly the impact mobile
has on our bottom line,” says Dincer. Home Depot now tracks what it calls
micro-conversions (like clicks-to-call, requests for directions, or store visits)
and also macro-conversions (actual store sales) to help attribute the value of
every engagement to their bottom line.

“Some of the internal data we have occurs at a quarterly level, but Google’s data
comes in at a regular frequency, which feels more real-time, and makes it a lot
easier to activate against,” says Dincer. “It really helps us create a more
holistic story of the consumer journey and see where our marketing fits in there.
With store sales data, we can aggregate online and offline KPIs and better optimize
towards truly enterprise-wide goals.”

“In the past, we had relied on traditional metrics like impressions, clicks, and
online sales to calculate the value of mobile. But Google store sales data lets us
see much more clearly the impact mobile has on our bottom line.”

Results

By the end of the test’s first week, Home Depot could see that the the ads were
working. And by the end of the four-week test period, the company was seeing more
than 8X in-store ROI from their mobile display ads.

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In fact, 93% of the sales created by the ads happened in-store,
with the remainder happening online.

The results were so good that Home Depot quickly expanded the gardening and outdoor
goods program to 2200 stores nationwide — and again saw 8X in-store ROI. Currently,
Home Depot is also planning to expand the pilot to other categories, like paint and
related merchandise.

"Mobile location extensions for display really proved their worth very quickly,"
says Umut Dincer. "We’re able to reach do-it-yourselfers who are close to our
stores and make a just-in-time connection that brings them the information they
really want in their I-want-to-buy-it moments. We learned long ago that we serve
our consumers best by matching their intent and giving them the relevant
information they need. The results have been great.”