BrainTrust Query: Where Is The Localized Advertising?
RSR just recently completed an analysis of several retailers’ localized advertising capabilities. We found two schools of retailers among those we evaluated: one set has taken a broad-brush approach to all kinds of digital channels and another has chosen to focus in and get deep (and local) in a few areas.
We defined the localized advertising perspective as a call to action that leverages the shopper’s physical location to provide a local element, for example, the nearest store’s address or phone number as part of the call to action.
The first set of retailers — the broad-brush kind — have set up at least a minimal presence in just about every digital channel there is, dabbling with in-video advertising, to mobile advertising (including in-game advertising), to the basics of display advertising and online fliers (along with the newspaper inserts). For these retailers, they have taken the approach: "It’s better to be a little bit everywhere than be really good at any one specific thing." The end result from a localized advertising perspective is that these retailers have opportunities to be much more localized, but don’t tend to take advantage of those opportunities. They may have the hooks (the ability to display a flier by zip code, for example), but the hooks remain unused (one flier for all zip codes).
The second set of retailers have specialized when it comes to digital advertising. They don’t have all the communication channels covered, but in the channels they’re in, they’re in deep, using Twitter links to drive shoppers to specific events in specific locations, mobile site takeovers and banner ads that offer up the nearest store, and digital promotions or offers that target shoppers in a certain geographic proximity to the store. But even then, shining examples — especially those with a strong tie-in towards driving traffic to stores — seem to be few and far between.
Discussion Questions
Discussion Questions: Are retailers missing opportunities by not taking advantage of localized advertising? Should retailers try to cover all digital communication channels first or go deep in a few before going wide?
Like politics, all retail is local. If the primary point of marketing is to initiate an action, making the message relevant to a nearby location would appear to improve the likelihood of an action. The obvious challenge is that this is a more complex (read expensive) approach. There are platforms, like Click Write by Loudclick, that provide the capability of combining a parent/local combination to maintain the overall brand while providing location-specific messaging. My sense is that this is where retail marketing is going.
What were the goals of the retailers that took a “broad brush” approach? I find it hard to believe that they were just dabbling. Were they experimenting to see what resonated with consumers?
When dealing with digital advertising, one size does not fit all. The lower cost of digital welcomes experimentation, evaluation and adjustment. The techniques used by the broad bush retailers can be effective for some retailers. Deep dives into Twitter and location-based services may be effective for some, but not for others.
I have to disagree with the basic premise of the study and the conclusion that “shining examples…seem to be few and far between.” At my company, we encourage clients to experiment with digital media to find what fits, to engage consumers on different levels, using different tactics.
The easy answer is “it depends.” How much budget do you have for R&D? What is your brand positioning (innovator, solid follower, traditionalist)? Who’s your target consumer and what technologies do they use? Marketers can go crazy trying to dive into the latest and greatest shiny object. Every marketer needs a framework to decide whether they are in “test and learn’ mode, immediate ROI mode or can put a bit in every bucket.
I believe local matters for retail — that is what my company does — and as is noted here, “local is where it all comes to the store.” I think the challenge in a digitally enabled, multi-threaded path to purchase environment is not to take local completely literally. Retailers need to figure out what is true local communication vs. personalized communication and where those intersect. As the line between clicks and bricks continues to blur and the role of the store evolves, retailers will be smart to start thinking about what “local” means and how their store fronts can evolve to community hubs.
Perhaps we need to consider localized advertising more carefully. It’s been sold with an almost moral force. (“How could you NOT be doing it?”)
But it may be a bit like highly targeted web advertising. Web targeting has delivered only minimal value for the broad channel. And web targeting has not proven valuable enough to change the miserably low CPC prices.
So I question any universal belief that ads SHOULD BE localized. Research shows that people in Washington State aren’t so different from people in Florida and they make their retail choices for the same reasons — only sometimes wanting different product.
In a sense, they’re identical for the big issues. Does the cost of advertising the smaller issues turn into enough profit to make it worth the cost? Not often.
Even the examples quoted here suggest that it’s only when there’s a really good reason to localize the advertising (e.g. a store opening, a local discounted price) that it pays out.
The core to success in retail is localization; that includes product assortment and marketing. If digital is the way to go in your local marketplace, then all avenues must be explored. Localization also connects you to your customer a lot faster than broad based marketing campaigns.
Well, to start with, digital advertising isn’t local or personal. Anything digital is contrived and, while it may be targeted, certainly isn’t personal. Local advertising is well and good. Go into most Applebee’s and you will see memorabilia for local high school and/or college sports teams. Most local pubs localize their feel by identifying with the communities in which they are located. I personally think that retailers should connect with their locality and customers by reflecting the interest of those customers. This includes involvement in local fundraising events. Digital has nothing to do with any of this and in fact may alienate consumers by “pushing” when they should be “hugging”!
Shouldn’t this first question be, “Are national and regional B&M retailers missing opportunities by not taking advantages of localized advertising?” This recognizes that retailers which are exclusively online, eBay advertisers, and those which depend on craigslist and classified ads are excluded from the conversation, along with retailers that have limited locations and must use only localized advertising by default.
The question is further narrowed by how homogeneous the stores are from one local area to another. Would localized advertising carry the same message across all stores, with the only difference being that it would appear in grassroots-type ad media? Or, like McDonald’s franchisees who are famously responsible for inventing and promoting new menu items, would the local ads be for products available only in limited areas — in which case localized ads are the ONLY choice? Seasonal and regional specialty items also require localized ads for national chains, such as hunting supplies at Walmart during hunting season and near hunting areas. Electric fans promoted by Target in regions experiencing heat waves.
So regarding the first question, we’re down this: Are national or regional B&M chains missing opportunities by not taking advantage of traditional localized advertising media to promote offers that are available across all of their homogeneous locations? That’s because every other type of offer has been ruled out as already using traditional localized advertising. I don’t believe they’re missing any opportunities at all in traditional media, because most if not all are already using them to advertise localized offers.
Now to the second question regarding the use of digital channels for advertising for any kind of offer from any kind of retailer. For football fans, this process for national and regional advertisers should resemble a quarterback probing the defensive secondary with various passing routes in the flat, across the middle, hooks, flys, and screens. And then, once he has determined some tendencies in the secondary, he goes deep. For smaller retailers, non-geo-sorted digital communication channels such as Facebook and Twitter are useless, and they must rely on digital media such as craigslist, Groupon, and eBay & Amazon (which are self-sorting).
People carry different concepts of localized advertising.
Targeting individuals is very different from connecting with communities, but both are localized advertising.
Targeting individuals uses individual interests. It is based on past behavior and derived from local segments.
Connecting with communities uses shared interests. It re-creates the original store concept of intimacy through assortment, neighborhood event support, local philanthropy, and the like.
Regional retailers have the advantage over national chains. They are in a position to know their segments better and are authentically part of the shared interests of communities.
All this is well and good. But are retailers missing opportunities by not harnessing localized advertising? That is answered by the local competitive situation. Markets with strong local players make attention mandatory, while markets dominated by big box retailers can breathe more easily.
There is more focus than ever on “glocalization”, especially overseas. Here in the US, retailers can look “local” in their advertising without additional expense. Overseas, multinational companies are finding local advertising needn’t actually be “local”, just appropriate for the market.
I like to see more broad approaches to marketing and advertising, followed by deeper dives into the productive channels to begin to monetize the efforts more measurably. There are some really cool campaign management tools now that can take the “gut feel” out of this work.
With technology like meta-tagging, hyperlocal, and other focused ways to get advertising into the niche, I’m surprised that anyone would do this any other way that targeted, localized advertising.
The blanket approach is great for exposure, but terrible for everything else.
And it seems contradictory to the basic principle of marketing — to build relationships with those that will be loyal to you and your product.
Localized advertising is not fully developed. Today, much of it is using twitter and sending direct messages. Some of it is spammy as customers are still new to it or don’t know how to opt-out. There is a lot more innovation to come.
So for now you are not losing out on too much. It is important to try variety of digital communication initiatives and collect data. The experience gathered will be critical in refining and defining the on-going strategy. Digital communication offers phenomenal amount of feedback.
Though, it is also important to do any initiative well enough and invest appropriately (funding, time, quality of resources, well thought out and integrated) to collect meaningful data. Otherwise it is a wasted effort. I have spent a lot of time experimenting with social media marketing without strong results. And the learning I have had is that I should have invested more to do justice to the medium.