10 Takeaways From #LSA14 On The Future Of Local Advertising

Where is the local advertising space headed? How will local marketers succeed in an increasingly fast-changing and competitive marketplace?

At the Local Search Association‘s 2014 annual conference (#LSA14) last month in Huntington Beach, California, hundreds of local advertising leaders gathered to explore what’s next in local and the steps that both local providers and advertisers will need to take to succeed.

Here are my top 10 takeaways from the conference on the core opportunities and challenges that local marketers and advertisers should be considering.

1. Leverage An Integrated Approach In The Last Mile

The path to purchase today is no longer uniform: each person navigating the local space is doing so in different ways, depending on their unique habits and specific circumstances.

In my conference keynote, I described our industry’s efforts to put this new, multi-platform world into context through the adoption of the term “Last Mile Advertising.” Just as the telecom industry used “Last Mile” to define the final leg in communications connectivity to consumers, local search can be described as reaching consumers in their “Last Mile” on the path to purchase — right before they call, click or visit a business.

As the graphic above shows, we see three key components in the Last Mile universe: Seek, Discover and Consider. Consumers today are entering the “Last Mile” through any three of these segments. They are then moving between one or both of the other segments before taking an action, or simply moving through just one of the segments before making a purchase.

Unlike in the past, the “Last Mile” in the path to purchase is fluid and unpredictable. In order to drive purchases, local marketers need to offer comprehensive, integrated strategies that reach consumers wherever and however they travel through the “Last Mile.”

2. Take Advantage Of Big Data To Win

Telmetrics President and LSA Chairman Bill Dinan talked about how big data coming out of local is providing tremendous insights for consumer connections and conversations. Dinan said the ability of marketers to use big data to reach consumers right before they make a purchase represents the next frontier in local.

Local marketers today should take time to analyze the data they receive through their media campaigns, social media activities and other efforts to glean key insights into what excites their customers and motivates them to move forward with a purchase.

With these insights, local marketers can develop more targeted and effective advertising that benefits both local businesses and consumers ready to make a purchase.

3. Build Digital Sales Proficiency To Have A Measurable Impact

With the consumer path to purchase increasingly leveraging digital and mobile platforms, local businesses today expect that those selling local advertising are proficient in digital.

However, the general perception is that sales reps do not demonstrate the digital knowledge that local businesses are looking for. Google‘s Kristin Coit put it bluntly: “I’ve spoken with thousands of small businesses.  They describe [the sales process] as the Wild Wild West … It’s overwhelming for them.”

Coit, who serves as head of directories and web hosting partnerships, channel sales North America at Google, said Google is helping its partners become better informed about digital through its Trusted Digital Media Advisor program.  The program better equips local marketers to sell both Google products as well as their own digital products.

As a kick-start to the program, check out these 13 video series on the digital fundamentals. By studying up on digital, our industry’s sales reps will be able to effectively develop, sell and implement local strategies that work in today’s changing marketplace.

4. Take The Complexity Out Of Products

Ginny Sandu, senior product manager, mobile and local advertising for Bing Ads, talked about the importance of eliminating complexity for local businesses as they develop more holistic advertising approaches. But he also stressed that at the end of the day, local businesses are looking for advertising products that drive calls and walk-ins, and enable them to measure of ROI of their efforts.

As Sandu put it, “We could make things, easier, simpler, and cheaper for small businesses, however when the rubber meets the road, you want to make sure your advertisers are getting the ROI they are looking for.”

In developing Bing’s new local advertising platform, Bing Ads Express, Sandu said that the key was finding a balance between automation to make digital ads easier for local businesses, while also providing them with a certain level of control over their ads.

5. Start With A Pilot Program To Prove Yourself

Alexis Nahama, VP of Marketing at VCA Animal Hospital and a national advertiser, stressed that local marketers that offer pilot programs are more credible than those who claim to have the “perfect” solution for a client. He said that pilot programs help the advertiser get comfortable with new approaches and products, while also delivering incremental ROI back to their business.

Nahama also said that personal relationships are key in developing trust between local providers and advertisers. To that point, he suggested that local marketers avoid cold calling and working without a list of references.

No matter how effective a solution may be, local marketers today must prove themselves with a local business before they themselves and their product can be taken seriously.

6. Leverage Verticalization To Compete

Industry analysts Neal Polachek and Greg Sterling led a panel of vertical focused companies that see significant opportunity to compete by building richer and more engaging experiences within their categories. While the likes of Google and Yelp own local horizontally, numerous start-ups are springing because many local verticals are still up for grabs.

As local verticals gain popularity among consumers, they will provide a strong value proposition to local businesses in their specific categories. For example, in various U.S. markets, many restaurants partner with OpenTable to allow customers to make reservations online.

With verticalization, local marketers have the opportunity to find and create new platforms for local businesses to advertise. Local businesses that fail to advertise with these emerging vertical platforms may be left behind competitors that engage them early on.

7. Embrace A Mobile-Led, But Comprehensive, Approach

Gian Fulgoni, executive chairman and co-founder at comScore, discussed the emergence of the “digital omnivore” in the U.S. marketplace. He noted that there are now 156 million smartphones and 82 million tablets in the U.S., growing at rates of 24% and 57% year-over-year.

Fulgoni said that this rapid growth in mobile is significantly impacting how consumers are shopping for products and services. Top retailers today now see one-third of their monthly audiences come exclusively from mobile platforms. And the opportunity to drive consumers from mobile searches to in-store purchases is significant. Fulgoni noted that almost 80% of mobile searches end in a purchase, with nearly 75% of purchases occurring in-store.

Yet despite rapid growth in mobile, Fulgoni said that local marketers should recognize that mobile should not be an exclusive focus. He stressed the importance of considering mobile as a leading component of a multi-platform marketing strategy that may also include traditional media like newspapers, TV and magazines, which are still popular with consumers.

8. Shift Towards A Client-Centric Model

Radicle Consulting’s Paul Plant led a global leadership panel of executives from Sensis, YP, Zap Group and Trudon that discussed how local providers are shifting their focus from thinking primarily about their own business and products. Instead, many local providers are becoming increasingly open to partnering with competitors — all in an effort to help their clients succeed.

The panel overviewed how their companies are working to simplify a broad and complex set of internal and competitor products and apply them directly against customer needs. As a result, local advertisers will benefit because they will be delivered with the best tools in the marketplace that drive their advertising objectives, regardless of the provider with which they are partnering.

9. Build & Innovate — For Yourself

Steve Wozniak, the Silicon Valley icon and co-founder of Apple, stressed that the best innovations come from people who build the technologies for themselves. “I designed Apple II because it was what I wanted for myself,” he said. “The Tesla, Elon Musk designed the car for himself.” In looking at young talent, he told attendees to search for “the person who is a builder — who has built successful solutions in the past.”

As the local advertising space continues to evolve, our industry must find and empower talent to build products that they themselves would want and use, rather than focus on developing platforms that cater simply to vague consumer trends or business goals. In today’s increasingly personalized marketplace, that approach is the only way to create a genuine experience that truly resonates with consumers.

At the conference, LSA announced the winners of our inaugural Ad to Action Awards, a new awards competition we developed to foster new ideas and stimulate thinking to bring to market the best local advertising products. The awards highlighted new and innovative advertising products within eight submission categories that demonstrated the greatest potential for driving local business sales and providing memorable experiences to consumers. We were impressed by submissions that demonstrated creatively and passion and drove meaningful results in the marketplace.

10. Drive Strategy With Predictions

In the closing session of our conference, industry analysts Neal Polachek, Greg Sterling and Matt Booth discussed the importance of making predictions when developing local strategy, and then evaluating and learning from those predictions down the line.

As a start, Polacheck and Sterling shared their predictions for local in the coming years:

• “Google will build and push new SMB products to augment SEM”
• “The focus will shift from consumer acquisition to customer retention”
• “Amazon will score big with SMBs beyond Amazon Web Services”
• “Legacy vertical sales organizations will offer digital solutions (e.g., American Tire Distributors)”
• “Facebook will field a local SMB sales channel”

The trio then opened the conversation for others to share their predictions as well:

• “Traditional SMBs will be fully integrated into local search”
• “Delivery timing will continue to be pushed up more and more — with same-day delivery becoming more mainstream in the next few years”
• “We will achieve real-time integration with local inventory by 2016”
• “Digital advertising companies will fail. Those focused on transactions will succeed”

While some of these predictions on local will pan out, others won’t. Nonetheless, in order to effectively compete in the local space, local marketers will need to take risks by making predictions about the market and acting on them.