No Conversion Left Behind: Why National Brands are Shifting Dollars to Local
December 19, 2016
It’s expected that businesses are going to spend $15 billion per year on mobile, location-based advertising by 2018. While smaller businesses are expected to increase their local marketing budget by 8% from 2013 to 2018, it’s national brands that are making the biggest shift to local with an estimated 37% increase from 2013 to 2018.
It almost seems counter-intuitive for a brand to grow from a small idea to a powerful enterprise only to focus in on smaller customer bases in their marketing. But hyper-targeted advertising is becoming more prevalent among big and small brands alike. Why? Consumers have come to expect a personalized marketing experience. Consider the statistics below:
- 66% of people want ads customized to their location.
- Only 16% of brands don’t do any store localization at all.
- In local search, national brands are showing less often than small business in 4 out of the 5 tested industries.
- 70% of national brands have invested heavily in local marketing.
As consumers continue to expect personalization and relevancy, local marketing will likely be one of the key factors in determining the success of a brand. Though local marketing requires more resources to implement — especially in the beginning — it’s ultimately what makes advertising more relevant to the consumer.
By focusing on relevancy to the customer, national brands are able to drive a higher ROI per dollar and are ultimately seeing better results in the process.
What can be gained from local marketing?
Particularly for enterprise and national brands, local marketing can require a higher level of problem-solving compared to generic, national ads. But the payoff for doing so can be huge, largely because local searchers are often the most likely to take action.
When an online user conducts a search for a local brand, product, or service, they are usually doing so because they are ready to visit the store and make a purchase. Consumers who conduct a local search — especially on their phone — are some of the most motivated buyers out there:
- 78% of local mobile searches result in offline purchases.
- Half of all mobile searches are performed in the hopes of discovering local results and more than 60% of those lead to a purchase.
- 50% of consumers who conducted a local search on their smartphone visited a store within a day.
- 18% of local searches on smartphones lead to a purchase within a day (compared to 7% of non-local searches).
- 4 in 5 consumers want ads customized to their city, zip code, or immediate surroundings.
Brands that are most effective at local marketing are able to successfully capture these users’ attention when they’re most interested, and they provide the user a clear path to becoming a customer.
Example: Big brands Extra Space Storage & Public Storage consistently rank well in their local markets
Extra Space Storage has more than 1,400 facilities nationwide and Public Storage has more than 2,200 facilities nationwide. They are the two largest brands in the self storage industry, and they have each devoted large portions of their budgets to localize their efforts.
A 2015 study compared national brands and small businesses in Google’s Local Stack across seven industries. In 6 out of the 7 industries, small businesses dominated the Local Stack and national brands were rarely placed in the top three spots. Self storage was the industry that bucked the trend thanks to the local marketing efforts of Extra Space Storage and Public Storage.
Both brands have managed to have:
- Moz Local Scores consistently in the 80s or 90s
- Domain Authority scores consistently near 70
- NAP (name, address, phone number) listed on all major citation directories
- Positive reviews for each of their locations
These factors allow them to consistently rank well in online local searches, which is certainly a contributing factor in their revenue of $782.3 million (Extra Space Storage) and $2.3 billion (Public Storage).
Extra Space also implements a variety of hyper-targeted marketing tactics. They adjust bids and ads across channels based on the customer’s device, location, and time of day. Some of their local marketing strategies include:
- Using location-based solutions to show users where the nearest facility is in the ad, which boosted ROI by 184% and increased click-through rate by 77%.
- Targeting mobile users within a given radius of a facility, which boosted ROI by 269% and increased conversions by 234%.
According to Scott Jensen, the senior director of interactive marketing, “Digital marketing allows us to operate on a local, neighborhood level, considering the needs of individual communities, yet do things at a much greater scale.”
How enterprise brands can reap the benefits of local marketing
Local search marketing can be trickier for enterprise brands with 50 to 1,000 storefronts. But with organic search, social media advertising, paid local search, and display advertising tactics, big brands can still dominate local marketing. Some of these tactics include:
- Localize creative marketing, search ads, and online landing pages. This can be as simple as updating the location based on your target customer base and as complex as creating separate landing pages with unique title and meta tags, appropriate Schema, photos, Google Local Map, and an optimized URL.
- Automate paid search campaigns across all locations. Set individual budgets for each storefront that reflect the market and your business’ goals. This step will go a long way in maximizing your local marketing ROI while minimizing the effort to do so.
- Try display advertising to hyper-target customers by interests and geography. Location isn’t the only factor you can use to hyper-target your customers. Paid search and social media advertising both allow you to target customers by factors like age, gender, interests, and more.
- Be proactive about your links, citations, and reviews online. Ever since Google’s Local Pack shrunk from 7 results to 3, these factors will be some of the most important for small businesses and national brands alike. Identify store locations that need more links, updated citations, and online reviews.
- Build citations around the internet and clean up all existing citations. Focus on NAP (name, address, phone number) and aim for high-authority websites like Google+, Bing Local, Foursquare, and Yelp. Add new listings, clean up duplicates, and verify that all citations are accurate.
- Ensure that your store locator and store locator results pages are mobile-friendly. Mobile customers will likely be looking for these pages, so make them easy to find and easy to use on a mobile device.
- Consider social media advertising to tailor specific messages to local demographics. With hundreds of thousands of targeting combinations and 89% reach accuracy (compared to the average online reach of 38%) for narrowly target campaigns, Facebook provides an unmatched ability to unite customers with the brands they are most likely to shop.
A key step for succeeding in local: Test your metrics
Testing is a critical step in any marketing plan, and it is particularly important in local efforts. Many users conduct searches on their phone and then visit the physical location to make a purchase, which doesn’t provide a definite connection for data-loving marketers.
To measure the effectiveness of local marketing efforts:
- Measure conversion rates of non-sales calls to action. When measuring the conversion rates of local searchers on your website, remember to look at the rates for smaller calls to action, including links like “Find a Store,” “Contact Us,” and “Phone Calls.” Concentrate on the full process of customer acquisition to identify pages with low conversion rates and to view the full customer cycle for mobile users.
- Measure ROI with a variety of metrics. It can be all too easy to look at sales as your only metric for measuring ROI. Instead, try creating a waterfall flow of consumer behavior to determine ROI. Look at impressions, clicks, store visits, in-store conversion rates, and average order size to more accurately estimate the success of your local marketing efforts.
Local marketing can lead to better results with fewer wasted dollars
Hyper-targeted marketing with a local context is much more relevant to the consumer than generic, nationwide advertising. Especially on mobile devices, where highly motivated customers expect to see customized content, localized marketing can lead to a drastically higher ROI — even for brands with hundreds or thousands of storefronts.
Brands who implement hyper-targeted marketing efforts are seeing better results with fewer wasted dollars, especially when they use tools to quickly launch 10,000 micro-relevant campaigns.
Paid search software can improve your KPIs, remove 90% of manual tasks, launch tens of thousands of powerful digital campaigns, and increase Adwords Quality Scores by up to 35%. That’s not to mention the ROI these efforts will have for your business.
The most successful national brands recognize the importance of thinking local in their marketing. By localizing your creative marketing, paid search ads, and landing pages and by targeting customers through display advertising, your brand can drive a higher ROI per dollar.