the State of Local Marketing A Roadmap for Local Marketing in 215 and Beyond
what, s working (and not) in local marketing Marketing has probably changed more in the past two years than the previous fifty, and the variety of ways to communicate with buyers continues to grow year after year. From local newspapers, yellow pages and events to Facebook, Twitter and geo-targeted local search, brand marketers and small business owners alike have more decisions to make today about advertising than ever before. Brands that sell through a distributed network of local affiliates (agents, dealers, franchisees and sales reps) face an even greater challenge. When corporate marketers take into account the wide range of communication channels available in each of their local markets while also trying to satisfy the needs of dozens, hundreds, or even thousands of local affiliates, marketing becomes an indescribably complicated puzzle to solve. To gain insight on the current state of local marketing and to better equip the brand marketers we work with to plan for the future, Brandmuscle surveyed hundreds of local dealers, agents and franchisees across a wide range of industries. We asked these local affiliates about their marketing habits and had them identify what s working or not and compared the results to trends we identified by tracking over $2 billion in co-op and channel investments made by our clients over the last three years. The results that follow paint a picture of a rapidly changing local marketing landscape that is challenging (and frustrating) for both affiliates and the brands they represent. We found instances of tried-and-true marketing tactics that are still very effective and many that are not. In addition, we discovered that newer marketing channels in the social and digital spaces have the potential to deliver excellent results, but require more time, effort and education than brands may have anticipated and need to explore further. 1
Traditional Media Remains an Important Part of the Local Marketing Landscape 2
Traditional media Traditional media (newspapers, magazines, radio, television, yellow pages, coupons and billboards) continues to play a significant role in local marketing, but the landscape is unquestionably changing. In our survey, satisfaction rates varied widely, and concerns about price were cited for all. Billboards and coupons received high marks for effectiveness, while radio and television generated somewhat positive reviews. The same can t be said for print, with newspapers, magazines and yellow pages trailing in satisfaction when compared to all other channels. Tactic % using Satisfaction INDEX Pr i m a ry Reason Not USED %Total Spend $ 213 % increase in Spend 211-213 Billboards 45% 111 Cost (78%) 5% 1% Coupons 83% 118 Cost (36%) 4% 3% Daily Deals 29% 86 Cost (39%) % % Magazine 45% 67 Cost (67%) 4% 1% Newspaper 63% 71 Cost (76%) 15% -4% Non-Traditional 47% 82 Cost (49%) 1% % Radio 65% 14 Cost (85%) 12% -3% Television 5% 1 Cost (93%) 6% -1% Yellow Pages 61% 73 Cost (67%) 1% -1% Satisfaction Index Methodology: The Satisfaction Index compares the satisfaction with each individual media tactic with the average satisfaction for all media tactics. Overall, 65% of respondents were somewhat or very satisfied with the media tactics they use so the index benchmarks each tactic against the 65% level of satisfaction. Radio & TV Radio & TV are a mixed bag when it comes to overall performance, and cost is partially to blame. 65% of respondents using television and 68% using radio were somewhat or very satisfied with the results. For the vast majority who do not use either, cost was the primary reason for avoiding them. Coupons Coupons performed well in terms of overall satisfaction and were the most widely used tactic on our list with 83% of respondents using them and 77% of those saying they were either somewhat or very satisfied with the results. The news wasn t quite as good for daily deals like Groupon, with just 29% of respondents using them and nearly one in four stating they were least satisfied with the results. Daily deals also topped the list of tactics that affiliates felt were too risky (14%). People are drawn to discounts. Depicts remarks that were provided by local affiliates. 3
Billboards Billboards ranked well for overall satisfaction with 72% of affiliates stating that they were either somewhat or highly satisfied with the results. However, just 45% of the affiliates we surveyed use billboards. Expense is what prohibits wider adoption according to the majority (78%) of respondents. print ads aren t as effective now in the digital age. print The news wasn t positive for traditional print media newspapers, magazines and yellow pages which ranked the lowest for satisfaction across all tactics our respondents considered. Unique to print media is that the majority of respondents were either very or somewhat dissatisfied with the results. However, all was not lost in this category; respondents cited investments in ethnic newspaper ads, community newsletters and out-of-the-box strategies like sticky notes on newspapers as working well. NON-TRADITIONAL Non-traditional advertising methods such as cinema ads, gas pump toppers, pizza box toppers and vehicle wraps had fairly decent adoption (47%) but lower than average results, with just 54% of respondents saying they were somewhat or highly satisfied with the outcome. That s not to say that non-traditional methods shouldn t be attempted, but due to their somewhat experimental nature, results may be more hit-and-miss than average. 4
How Brands Can Help Local Affiliates with Traditional Media: Since traditional media often comes with a higher price tag for local affiliates, tactics should be carefully evaluated in the media mix by looking at the overall goals of your local marketing campaigns. Considering traditional media options within the context of your desired reach will help to determine if costs can be reduced. For example, many local businesses cited cost-effective examples of success using ethnic and community-focused media. Educate affiliates on overall media placement strategies and when to use certain media tactics. Encourage affiliates to look for ways to use traditional media in nontraditional ways such as sticky notes on newspapers, ethnic newspapers or radio remotes. Make sure affiliates understand your national or regional media plans so they can maximize the overall message by running complementary local placements. Remember that creative plays a critical role in the success of traditional media. Since many affiliates may only be able to afford smaller ad units, develop creative with strong offers to cut through the clutter and meet their needs. Offer tips and tools for measuring media placements (e.g., call tracking numbers) so affiliates can track the effectiveness of their ad spend. Billboards are typically used for awareness because production costs often dictate that affiliates cannot afford to swap out creative on a regular basis; billboard creative should be reflective of a more general message. Local radio and TV have a shorter time frame to be retained by customers; repetition of local business names and a strong call to action can help boost retention of your marketing message. 5
Local Affiliates Are TARGETING CONSUMERS with Direct Mail & Email 6
Direct Mail & Email Local affiliates are enjoying the targeting and personalization benefits of email and direct mail. Both tactics rate within the top third for overall satisfaction, but complexity was cited as a barrier to entry for email. Tactic % USING Satisfaction INDEX Primary Reason Not USED %Total Spend $ 213 % INCREASE in Spend 211-213 Direct Mail 81% 115 Cost (7%) 7% -1% Email 72% 117 Too Complicated (56%) 1% % Direct Mail Direct mail is popular among local affiliates, with 81% using it and three out of four of those (75%) saying they are somewhat or very pleased with the results. Respondents overwhelmingly stated that direct mail is more effective at retaining existing customers than at attracting new ones. The primary reason some affiliates avoid using direct mail is cost (7%). Direct mailers tend to be brought into MY STORE more than any other item. Email Email is widely used by local affiliates (72%) and our survey found that the majority of respondents using it (76%) are either somewhat or very satisfied with the results. Many cited personalization and the ability to measure performance as important ingredients to success. What s stopping 28% of affiliates from using email? The majority of those who avoid email (56%) feel it s too complicated or time consuming. Our most effective marketing activity was an email blast offering a discount. 7
How Brands Can Help Local Affiliates with Direct Mail By targeting advertising messages to specific individuals, homes, or geographic areas, local affiliates can reduce the waste often associated with mass media. Direct mail can be used for both prospecting and retention, while email is better served for retention and referral marketing. Door-to-door campaigns offer an effective way to canvass an area and are productive for local businesses to use after service calls or installations, grand openings or expansion into new areas. Provide opt-in programs to help reduce costs for local affiliates, and take advantage of bulk printing or negotiated discounts on shared mail programs. These types of programs also provide brands with the ability to control the message and delivery timing. Help affiliates to better understand their key target demographics and the importance of updating customer lists and data. Provide training and guidance on CAN-SPAM and email marketing best practices to ensure affiliates are following the necessary rules and regulations. Supply door-to-door kits and guidelines to ensure that affiliates are conducting campaigns in a way that complements your brand messaging. Provide recommendations for things like uniforms, identification tags, what types of marketing materials to distribute, and the types of neighborhoods or areas to canvass in. & Email: 8
Local Events & Sponsorships Are Connecting Brands to Communities 9
Local Events & Sponsorships Despite living in an increasingly virtual world with online shopping growing at astounding rates, our findings suggest that local affiliates appreciate face-to-face interaction with buyers more than ever. In fact, local events captured the highest rank for overall satisfaction across all the tactics considered, with 8% of respondents stating they were somewhat or highly satisfied with the results, and 71% saying the same about community sponsorships. Overall, 79% of respondents said they participate in local events. The primary reason others avoid events is because they are too complicated or time consuming (46%). Tactic % USING Satisfaction INDEX Primary Reason Not USED %Total Spend $ 213 % increase in Spend 211-213 Local Events 79% 122 Too Complicated (46%) 4% 2% Community Sponsorships 71% 18 Cost (42%) 11% 4% Community events and sponsorships put us in the community and let People know we care. Local events give me the opportunity to talk to the local community about our services and products. 1
How Brands Can Help Local Affiliates Execute Successful Events & Sponsorships: Leverage events and sponsorships to develop a consistent presence in local communities and to help local affiliates establish a reputation as a trusted local provider. Local events and sponsorships can be relatively inexpensive when compared to other traditional tactics, and can serve as an effective tool for local affiliates who want to close sales on-site or gather leads. Sponsorships should be used to build awareness and to promote the business name within the community, but they require a longer time to nurture compared to more direct tactics. Provide guidance on the types of events or sponsorships that will align best with your local affiliates and corporate brand (e.g., home and garden shows or women-focused events). Consider corporate-level partnerships that your local affiliates can help execute; for example, local charity events, minor league sports or community festivals. Provide affiliates with access to timely and relevant marketing materials such as pre-packaged Point of Sale (POS) kits to drive awareness and draw customers to booths. Create pre-packaged event kits to make participation easy for affiliates. Provide access to logos, ad and email templates, radio scripts and other branding elements that can be easily customized to generate awareness pre-show and to capture and convert leads. Encourage affiliates to use social media to promote their participation in local events and sponsorships. Provide training materials and event best practices. 11
Local Affiliates Need Help With Digital Marketing & Social Media 12
Digital Marketing & Social Media Despite all of the hype surrounding digital marketing and social media, adoption rates among local affiliates are still relatively low. Overwhelmingly, affiliates feel these tactics are just too complicated or time consuming. However, those who use these channels are quite pleased with the results and cite the low cost to execute and ability to measure results as positives. Somewhat surprisingly, our study revealed that nearly one in four respondents still do not have a local website. With websites playing a foundational role in supporting other digital tactics like paid search, online display and mobile marketing, it s clear that there is a digital divide between local affiliates who have embraced digital marketing and those who don t have the knowledge or time to invest in making them work. Brands that fail to invest in helping local affiliates build a digital foundation will face even greater challenges in the future as digital media takes center stage. Tactic % USING Satisfaction INDEX Primary Reason Not USED %Total Spend $ 213 % increase in Spend 211-213 Online Display 52% 17 Too Complicated (43%) 3% 1% Paid Search 6% 111 Too Complicated (46%) 1% 6% Website 72% 111 Too Complicated (55%) 3% 3% Facebook 63% 19 Too Complicated (61%) % % Twitter 43% 93 Too Complicated (59%) % % Online advertising, particularly Facebook and other social media venues is where people are most available/ exposed Due to the amount of time they spend on their screens. 13
Social Media Unlike traditional forms of media, social media requires more time and attention. Affiliates need to create and post regular updates with engaging content to be effective. They also need to monitor these channels and be prepared to engage in online conversations. Based on our survey, many local affiliates just don t have the bandwidth or resources required to do it themselves. With 63% using Facebook and 43% using Twitter, adoption rates are lower than we would expect. Affiliates pointed to the complexity and time required to maintain these channels as the primary reason they avoid them (61% and 59% respectively). The good news is that affiliates who use social media are quite satisfied with the results, particularly those with annual marketing budgets under $1K. Of those using social media, 71% of the local affiliates using Facebook and 61% using Twitter said they are either somewhat or highly satisfied. Earlier we revealed the strong performance of highly targeted and localized, one-to-one traditional marketing tactics like local events, direct mail and email. Social media, particularly Facebook, would seem like a logical next step for building one-to-one connections with local consumers online, particularly in support of retention and referral programs. Facebook is the most effective thing we ve done but we are not able to invest the time that we would like. 14
I want to do more with online searches. It bugs me when we Are low on the list and I see our competitors in banner ads. Online search coupled with our website generates the most leads; SEO has been effective to aid this. PAID SEARCH & ONLINE DISPLAY Similar to social media, adoption rates are lower than we would anticipate, especially when compared to the relatively high satisfaction rating affiliates gave these tactics. Overall, 6% of our respondents are using paid search and 73% of that group are somewhat or highly satisfied with the results. Likewise, 52% are using online display and 7% are somewhat or highly satisfied. Again, complexity was the primary complaint from affiliates who aren t using these tactics: 46% deemed paid search too complex, while 43% said the same about online display advertising. Websites Websites had the highest adoption rate of any digital tactics considered (72%), but it s important to point out that while adoption is high in comparison to other tactics, it reveals that one out of four respondents still do not have a website. More than half (55%) said complexity is the reason they don t have a website. However, those who do have websites are finding value in them with 73% stating they were satisfied. 15
MOBILE As part of our survey, we asked local affiliates to briefly describe their most effective marketing activity and why they felt it succeeded. While mobile adoption rates are very low, a handful of respondents cited examples of success with mobile campaigns. Affiliates view mobile primarily as a fast and inexpensive way to connect with existing customers rather than as a method of generating new business. A TEXT BLAST TO MY CUSTOMERS WORKED WELL AS A REFERRAL PROGRAM; BROUGHT CUSTOMERS THROUGH THE DOOR. texting IS CHEAP AND GETS THE MESSAGE OUT BUT CAN ONLY REACH PREVIOUS CLIENTS. 16
How Brands Can Help Local Affiliates BUILD AN ONLINE PRESENCE: Consumers are shifting the way they make purchases with some reports estimating that as many as 8% begin their search for products and services online. In addition to being found, an online presence can also provide customers with a heightened level of confidence in local businesses. According to our study, the primary reason local affiliates avoid online marketing is because it is too complicated or time consuming. Marketers are in a unique position to help local affiliates make the journey to online marketing, which is often more cost effective and measurable; two key considerations when attempting to maximize the ROI of smaller budgets. Provide training and best practices to prepare local affiliates to use new media and coach them on how to properly engage with customers online. Online display ads can extend the value of and build upon traditional media placements. Encourage affiliates to take advantage of existing media relationships and supply matching online creative pieces. Encourage local affiliates to negotiate for value adds or complementary display ads on newspaper websites or streaming radio sites. Content is critical to the success of local websites and social media. Provide your affiliates with access to suggested content, promotional materials, and relevant messaging they can tailor to meet the needs of local audiences at different stages of the sales cycle. Does your co-op program provide incentives for online media? Consider reviewing your program and make adjustments if necessary. 17
planning YOUr ROADMAP FOR 215 EDUCATE affiliates about new media & BEST PRACTICES Teach local affiliates the basics of new media and provide tools and guidelines to help them manage social media and online marketing programs. Reinforce the importance of having an effective media mix and testing to reduce risk. Explain why reach and frequency are important and how consistency and strong calls to action will improve performance. Activate local MARKETING PROGRAMS Offer affiliates an easy way to opt into pre-packaged programs for things like direct mail, email and paid search to help lower the cost and effort required. Create tools like event kits to help affiliates capture and convert leads before, during and after the show. Provide access to templates in a variety of sizes and formats. Include strong creative options in smaller ad sizes to break through the noise without breaking budgets. analyze LOCAL MARKETING EFFORTS Provide access to tools like call tracking or promo codes to help affiliates measure effectiveness. Track co-op and MDF disbursements by requiring proof of performance to close the loop on ROI. incentivize & reinforce LOCAL success Closely monitor and reevaluate your co-op and MDF programs to ensure funding reinforces the use of tactics and behaviors that deliver the best results. Capture and share your local affiliates success stories to encourage repeatable wins. 18
survey results 19
MEDIA USAGE MEDIA SATISFACTION Use Don t Use Satisfied 83% Coupons 79% Local Events Coupons 77% Email 76% 75% Email 72% Direct Mail Website 72% Paid Search 73% Website 73% Billboards 72% 71% Community Sponsorships 65% Radio Facebook 63% Facebook 71% Newspaper 63% Community Sponsorships 71% Online Display 7% 61% Yellow Pages 6% Paid Search 5% Television 47% Non-Traditional Door-to-Door 62% Twitter 61% 45% Non-Traditional Magazine 45% Yellow Pages 43% 29% Daily Deals % 2% 4% 56% Daily Deals Billboards Twitter 65% Television 52% Online Display 68% Radio 58% Door-to-Door 8% Local Events 81% Direct Mail Dissatisfied 6% 8% 1% 54% 48% Newspaper 46% Magazine 44% % 2% 4% 6% 8% 1% 2
CO-OP SPEND & % increase 211-213 -4% 2% -3% 15% 211 212 4% 6% 1% -1% -1% 1% 5% 213 1% 1% -1% 2% % % 3% 3% % er N io Rad pap s ew ion vis e Tel ail ty uni ps shi tm ec Dir or ons Sp ds oar b Bill ch e ga Ma y is ed Ev cal lin On s s ent pla zin ear ds Pai e Pag llow Lo Ye m Com n- No ail al tion di Tra s ite pon Em Cou bs We media usage & 213 co-op spend 8% 83% 81% 79% 72% 72% 71% 65% 6% % Usage 63% 63% 61% 6% 52% 5% 47% 4% 45% 45% 5% 4% 43% % Spend 2% 11% 7% 4% 4% 1% 15% 12% 1% 3% 6% 3% 1% % 1% % % s pon Cou ail ts ven tm ec Dir L le oca ail Em te ips bsi rsh o We s n Spo nity u m Com io Rad k boo e Fac N er s e Pag w llo pap s ew Ye ch ear ds Pai On lay isp D line ion vis e Tel No nal itio rad n-t ds oar b Bill e zin ga Ma ter it Tw 21
MARKETING BUDGETS 2% 1% 17% Under $5 $5,1 - $1, $51 - $1, $1,1 - $2, $1,1 - $5, $2,+ budgets compared to prior year 22% 52% 8% 7% Increased more than 1% Decreased more than 1% Increased more than 2% Decreased more than 2% % DON T use PRIMARY REASON NOT USED % SATISFIED Billboards 45 55 Too Expensive 72 28 111 4 4 5 Community Sponsorships 71 29 Too Expensive 71 29 18 7 9 11 Coupons 83 17 Too Expensive 77 23 118 1 1 4 Daily Deals 29 71 Too Expensive 56 44 86 Direct Mail 81 19 Too Expensive 75 25 115 8 8 7 Door-to-Door 58 42 Too Complicated 62 38 95 Email 72 28 Too Complicated 76 24 117 1 1 1 Facebook 63 37 Too Complicated 71 29 19 Local Events 79 21 Too Complicated 8 2 122 2 3 4 Magazine 45 55 Too Expensive 44 56 67 3 3 4 Newspaper 63 37 Too Expensive 46 54 71 19 19 15 Non-Traditional 47 53 Too Expensive 54 46 82 1 1 1 Online Display 52 48 Too Complicated 7 3 17 2 2 3 Paid Search 6 4 Too Complicated 73 27 111 4 4 1 Radio 65 35 Too Expensive 68 32 14 15 14 12 Television 5 5 Too Expensive 65 35 1 15 14 12 Twitter 43 57 Too Complicated 61 39 93 Website 72 28 Too Complicated 73 27 111 3 Yellow Pages 61 39 Too Expensive 48 52 73 2 1 1 TACTIC 28% Stayed about the same % use 1% 15% 11% data SUMMARY % NOT SATISFACTION % CO-OP SPEND 211 212 213 SATISFIED INDEX 22
About Brandmuscle Offering a comprehensive local marketing automation platform backed by 24/7 on-demand support, Brandmuscle helps national brands capitalize on opportunities and local market conditions with brand-compliant, customized marketing across all mediums and formats. Headquartered in Chicago with offices in Cleveland, Austin and New Jersey, Brandmuscle employs over 65 talented professionals, serves nearly 2 of the world s leading brands and manages over $2 billion in channel marketing investments each year. Brandmuscle has appeared on Inc. Magazine s 5 5 Fastest-Growing Companies in America List multiple years, and is the only software provider ranked Best in all categories of Gleanster s 214 Local Marketing Automation Vendor Benchmark report. For more information about Brandmuscle, call (866) 464-4342 or visit www.brandmuscle.com.