Perception vs.Execution:Examination of Local BusinessStrategies RevealsGaps to Act On
National advertisers have proclaimed 2012 “The Year Of Local.” According to Borrell Associates, the local digital space will grow by 18% in 2012 and surpass newspapers, thelong-standing champion, as the top recipient of advertising dollars in the local sector.However, the rapid evolution of the digital marketplace hascreated unique challenges for brands, who are showing gapsin their business strategies to act on the opportunities in frontof them. Among the toughest challenges are the ability tounderstand everything as it emerges, parse what is relevant andact on the elements most meaningful to a business. One area ofincreasing relevance for many national advertisers is the mannerin which they advertise to the local digital marketplace.
The local digital space is experiencing swift growth.Consider the following:
•Google states that 20% of all searches have local intent, andthat number jumps to 40% when conducted on a smartphone.•Foursquare, the location-based user check-in service, reached1 billion check-ins as of September 2011.•A 2011 comScore study indicates that 50% of consumersselect a local business based on ratings and reviews of others.•A 2011 Harvard Business Review study concluded that eachstar rating added to a Yelp review equaled a positive revenue impact of 5% to 9%.GMS Local, a service of GroupM and a provider of local online services for national brands,recently completed a research project to identify and provide answers to the challenges thatbrands face in the digital marketplace. According to the research, 70% of national brands report spending greater than the nationalaverage of ad budgets on local versus national initiatives. The findings show marketers areextremely bullish about their current and future investments in local advertising, particularly in localonline media. However, this enthusiasm does not manifest itself into adoption and trial of localonline programs.
There is a large gap between the perception marketers have of their localposition and the reality of what they actually implement.
Why is there such a large disparity? Isit simply uninhibited optimism, or are there deeper educational components of the local space thatneed to be addressed? This white paper explores this dichotomy in further detail and recommendsways for brands to close the gap by accelerating their efforts in the local online arena.
Local Digital/Online Defined:
All web-based and mobile destinationsthat enable traditional,brick-and-mortar businesses to represent themselves. These local digital environments caninclude online businesslistings (including Yellow Page directories and Search Engines),community and social reviews as well as daily deals and check-in services.Local digital enablesbrands to design and build storefronts that create and shape consumer online brand experiences.
The research was conducted using a comparative study method, including a survey of marketing executives and managers from national brands in the United States with 500+ brick-and-mortar locations in diverse industries and verticals. Two-thirds of respondents were from the traditional retail space (clothing, electronics, mass merchants, etc.), and the remaining respondents came from a diverse group of industries including grocery, restaurant, health and beauty, insurance and hospitality, among others. Survey questions utilized local digital marketing averages and best practices from national data in order to gainreaction and comparative “self-assessments” against those averages by participating respondents/brands.The research was conducted between September and November 2011.