Marketers who aim for a national audience may believe that they can effectively reach their target by using media formats like broadcast TV. But a significant number of these advertisers also allocate a portion of their media mix to local marketing initiatives. Doing so has both challenges and rewards.
Currently, about 66.18% of brands spend some amount of their ad budgets on local marketing campaigns according to Balihoo. Nearly 20% of these companies allocate 25% of their budgets to this effort. Another 35% spend between 1–5% of marketing budgets on local channels. The businesses most likely to engage in local marketing have $1 billion or more in revenue. The companies “are 49% more likely to invest in local marketing” than companies that have only $100-$250 million in revenue.
What do these businesses expect in exchange for this expenditure? It’s all about ROI. Marketing execs are looking for an ROI that’s equal to or higher than what they get in the national campaigns at least 81% of the time. In general, 56% of national marketing campaigns and 42% of local marketing campaigns are subject to ROI metrics. Over half of these businesses look for an ROI of 3 to 1 or lower on national campaigns. However, 24% of national marketing campaigns and 36% of local marketing campaigns are expected to generate an ROI of at least 4 to 1.
These advertisers face challenges in achieving this goal though. Many are using spot TV, out-of-home placements on billboards and radio. But they’re also exploring new formats like search and location-based networks to expand their local reach. As they emphasize their local campaigns, the top 3 problems marketers cite this year in the Balihoo survey are lack of budget (39.7%), tracking and metrics (38.6%) and lead generation (31.4%).[Source: Research Micro Study. Balihoo.com. 2012. Web. 4 Jun. 2012]