Vice President, Strategic Sales Development , Business Development
A white paper from Marchex published earlier this year is raising is great questions, and offering even better answers, to the national brand-local advertising model. Marchex used data from online campaign, digital sourced leads, and interviews with business leaders to observe some interesting trends in “national-local” advertising and business.
The data tells a few interesting stories, especially that importance of coordinating national and local campaigns. The auto-insurance industry gives a prime example of a national brand where business is done primarily with local affiliates. We all know Allstate, Geico, State Farm and so on, but when we’re ready to purchase we go straight to our local representative. And that local relationship is no small pittance. $178 billion of business is done locally with auto insurers, according to Marchex. To put that in context, we do $186 billion in business with all e-commerce categories combined.
And advertisers have taken note – ad-spends on the local level are expected to increase 20% by 2017.
So this national-local model is easy enough, right? A national auto insurer can run its national campaign to spread awareness while local affiliates can buy spots on radio, in local publications, etc. But that model turns out to be toxic to the overall business model because local affiliates end up competing with themselves. And while competition is usually good, Marchex finds that this form of competition can double the cost of a lead.
The solution is simple, national brands need to coordinate with their local affiliates. So an insurance ad running in Norman, Oklahoma can follow its usual branding strategy with a reminder to visit your local affiliate. Of course, in crowded urban areas, which one? As Marchex notes, mobile devices are somewhat alleviating the problem by allowing consumers to find their nearest dealer.
A good national-local strategy involves a lot of elements. Just like their consumers, businesses are present on a multitude of formats. Online search ads, digital banner campaigns, social media, radio and television are just a few of the tools local advertisers use. And leads generated on one platform might cross over to another. Marchex notes that anywhere from 81% to 89% of consumers who see digital campaigns prefer to get in touch over the phone.
And what does Marchex have to say about our local business owners? They’re overwhelmed by digital and don’t consider themselves internet-savvy. That doesn’t mean they don’t want to get involved in digital, they just need a helping hand. For example, while Google search ads can be an effective tool in driving local traffic, 40% of the calls generated from those ads are wronger numbers, spam or customer service calls, reports Marchex. The solution is to diversify online assets.
Read the white paper here.