Challenges & Opportunity In Local Advertising

More national advertisers are using online local advertising to generate leads and drive offline sales. The strategies for successful local online advertising are not the same as general online or search advertising and measuring results can be challenging. That’s why so many national advertisers, agencies and online advertising resellers are reaching out to partners to help them create and optimize their local online advertising strategy.

In conjunction with Greg Sterling of Sterling Market Intelligence, Marchex recently conducted a study of national advertisers across the United States who sell products and/or services through local outlets, dealers, franchises or branded stores to gain an understanding of their local online advertising strategies and tactics, challenges and best practices, as well as how they are measuring their results and return on investment (ROI).

It wasn’t all that surprising that the majority of these national advertisers – 73%, in fact – were doing digital or online marketing and nearly half of the respondents indicated they were doing some form of local online targeting. But despite the growing demand for local online marketing, geo-targeting by those surveyed rarely dipped below the state level and 45% indicated they did not use different messaging or tactics for different geographic or local markets. What’s more, the data also shows that while more than 50% of marketers are trying a number of different local sources including search engines, directories, local search engines, newspapers and vertical Web sites, managing the campaigns and generating volume are challenges.

Measuring effectiveness

This approach also hints to their difficulty in accurately measuring effectiveness. While 47% reported that at least a quarter of their in-store sales were a result of their online marketing, they cited the difficulty in measuring ROI and difficulty connecting offline sales to online marketing as two of the top challenges they are facing.

With general confusion regarding strategy, tactics and measurement, national advertisers and their agencies need to examine a set of best practices that can make or break their local advertising strategy. Virtually every local advertiser is looking to maximize ROI, increase local leads and sales, and reach a more targeted audience. And especially in our increasingly fractured local advertising market, a sharp strategy is required to accomplish all these goals.

Strategies you should know
If you’re handling your local advertising campaigns internally, a review of the following strategies will help you find an effective mix. And if you’re working with an advertising agency, ask whether they have the capability to execute these strategies for your locally focused campaigns.

1. Diversify traffic sources beyond paid search. Search accounts for 30% of consumers’ sources of local business information. That’s a lot—but print directories account for even more: 31%. And Internet Yellow Page sites, local search sites and cell phone marketing account also account for 31%. That’s why having an advertising solution that reaches consumers using these additional online sources is essential to maximizing your marketing’s reach.
2. Utilize localized landing pages for each location or market—and track everything. Each location, market or service area needs to be tracked separately—so you can reach your customers where they live. What’s more, landing pages should use calls-to-action that are tailored to the type of leads desired: i.e., calls, form submissions, coupons. Include local phone numbers, and specifically list the locations/service areas where you offer your products and services. By leveraging call-tracking and tracking everything on your targeted local landing pages, you gain a wealth of information about your current and prospective customers.
3. Pick the lead types and measurement techniques best suited for your business. Customers are interacting with your Web sites in many different ways: some would rather pick-up the phone while others schedule appointments or use coupons, and some will print maps and visit your store locations. Be sure to track trends by geography or local market. Use call analytics, Form-to-Phone, and other measurements to determine lead quality and ROI.
4. Tailor paid ads to local markets and use local phone numbers. It may be obvious, but it’s worth saying: use copy that specifies that physical location. We find greater success using messaging that suggests the value of buying nearby, along with location-specific offers and geo-modified keywords. Targeting should occur by state, region, city, and DMA. When creating ads, think about all the locations that local consumers might use to find businesses in their area to avoid missing out on potential customers.

Local online advertising is forecast to grow nearly 48% to $12.6 billion in 2008, according to Borrell Associates. Despite this high growth, the fragmentation and granularity of local advertising creates challenges for national advertisers, resellers and agencies. However, when you have these strategies in your arsenal, you’ll know where to optimize—and how to evaluate solutions that your partners present to you. That’s a strong foundation for seeing real results.

To receive a summary of the survey results and sample RFP questions, please visit www.marchex.com.