As a young field marketing manager for a growing restaurant brand I was challenged by seasoned operators to make local ad spend go further. Every idea seemed to be on the table, every price point or promotion made “cents” to them. Local marketing, they believed, could always cost less and deliver more. Local marketing, in their eyes was cheap and immediately effective. My relative inexperience at the time and the bravado of these marketing (I mean operations) experts led my intuition toward trust and belief in the concept that local marketing was in fact cheap and immediately effective. In retrospect, I chalk that season of my professional life up to I didn’t know what I didn’t know.
Just so we’re on the same page… I define local marketing as local advertising tactics used at a community level to build brand awareness, amplify corporate messaging, connect socially with potential customers and reinforce key equities with existing customers. Local marketing tactics may be broadscale in nature or one to one. Very often, local marketing programs serve one of three categories; Civic Pride and Participation, Charitable Contributions or Cooperative Partnerships. Local marketing is delivered through print, broadcast, digital, social or just as commonly, at a one-to-one level in neighborhoods. It would seem there are as many local marketing options as there are brands that need to succeed with them.
Fast forward twenty-five years or so. I still direct marketing strategies designed to strengthen a brands financial position in local markets. On one level, the value I place on local marketing has never been higher. However…the expectations for local tactics and the role they plan in an overall strategy have changed dramatically. To be clear, I believe that for a brand to grow nationally, they must succeed locally. Successful brands understand this. They know sustainable success means winning the local battle is fundamental to winning the war. The paradigm shift for me over two decades is that Local Marketing is a long term investment, not a short term sales fix. Local marketing is essential to success but fraught with risk. It is most certainly not cheap or immediately effective.
The simplest illustration is door hanging vs localized Facebook® or digital display. For many local advertisers, it is still common to advertise locally handing out promotional materials into local neighborhoods and at local events. The argument is the materials are cheap and labor costs are practically zero. False and false. Best case scenario, you can print and distribute door hangers or flyers at .20 cents each. To keep the math simple, a local advertiser can deliver 1,000 impressions in an afternoon. So total spend is $200 to for a 1,000 impressions. Impressions delivered with no measurable level of targetability outside of right time and right place assumptions. Conversely, you can build a custom audience inside Facebook® or Google® that targets messaging to a specific audience based on geography, demographics, shopping behavior and affinities. You can deliver these impressions with much a much smarter level of targeting at a cost (in general terms) of $5.00 per thousand. Said simply, for the same $200, you can deliver 40x the impressions to a much more targeted audience. You also give the potential customer immediate opportunity to connect with your brand through landing pages and quick links to key messages.
Quality of impression and measuring value of an impression are equally important parts of the equation. Topics for another day perhaps? But in short…you can use your own historical data on inquiries, conversion rates and average ticket to estimate ROI on the illustration. I assure you that short term profit from local marketing spend is hard to find. It’s a long term brand promise that needs to be delivered on at unit level. Local marketing by common definition is comparatively the most expensive. It is also the channel least scrutinized from a cost vs return perspective. Instead, marketers rely on the concept that if it’s local it must be a good idea. That concept is generally bad for business. There is a cost and a return on every ad dollar. Successful advertisers learn to value each dollar. That doesn’t mean every dollar serves the same purpose or should have the same ROI…they won’t. It does mean every dollar matters.
My suggestion is to think with a very localized perspective but spend each ad dollar using common “cents” metrics including cost of impression, engagement and take rates along with the most important KPI of them all, ad to sales ratio. As I said, no other media channel gets less cost vs return scrutiny as local marketing. The fact is, it should get the most.