Why local will win for brands in 2020

Tiger Pistol Australia CEO Troy Townsend
By Tiger Pistol Australia CEO Troy Townsend | 28 January 2020
Troy Townsend

Local Area Marketing isn’t new, so why are so many businesses increasing their local advertising spend across digital? It’s because with changes in technology and consumer sentiment, local advertising is more powerful than many big national brands care to realise.

For starters, there’s a trend towards #supportlocal and #buylocal. While it’s intended to be a grassroots attempt to support small businesses, it does change the way that consumers look for brands – they’re looking nearby first, with Google reporting a 900% increase in searches that contain “near me” over the last two years.

Location is powerful, especially with mobile

With more than half of website visits now taking place on mobile, pulling out your phone to search for something while shopping is as normal as going shopping itself.

Over the past decade, most brands have tried leveraging this by dipping their toes in a local approach, typically using Search. It makes sense, knowing that when customers are searching for something they’ll often be in the vicinity to purchase there and then.

But Search isn’t the only way to tap into this opportunity. Local advertising on social media and digital display can also be powerful, especially when combined with location-based out-of-home (OOH) advertising.

Media platforms shifting towards local
Big brands are feeling the pinch of having so much competition for impressions at a national level, and are demanding more from their digital spend. Recognising this, along with the customer trend toward engaging with local businesses, Facebook and Google have introduced tools to help brands tap into their most engaged audience.

Facebook now offers some sort of local solution across its full suite of products. At the most basic level, it offers Location Pages as well as Brand Pages, allowing individual stores to have their own Facebook page. According to the data, 72% of brand engagement happens on the local Pages as opposed to the brand Pages. On the more advanced side of the coin, Facebook offers Local Awareness Ads which target a specific local audience. With these, you can create specific offers which are distributed via Messenger, driving foot traffic, and closing the loop with a deal-based conversion offer.

Google has a similar offering to Facebook’s Location Pages with its Knowledge Panel – the section that appears to the right of search results with information on the searched business. Other products such as Google Local Inventory Ads (LIA), allow brands to display live stock levels of products in a store nearby. These have been in market for over two years but remain totally underutilised by brands across APAC. Even YouTube has a local product!

It’s easy to understand why these products have been overlooked. The idea of not only having to create hundreds of pages and local campaigns but also having the correct infrastructure in place across POS systems and CRMs to be able to have all the data to run these campaigns, means running localised campaigns often gets put in the ‘too hard basket’.

Managing local advertising at scale

Third-party tools are helping brands catch up and making it simpler to execute a local strategy, by automating many of the tasks and simplifying the connection points between systems.

Rather than manage each ad individually, these tools allow you to create and run hundreds of personalised ads in the same time as it takes to do one version, tailored not just for location, but audience and offer.

Early adopters of this technology are already reaping the rewards of its simplicity, creating innovative campaigns, and expanding the meaning of local campaigns. For example, instead of a global soft-drink brand directing people to buy at their nearest supermarket in Australia, they ran hyper-local campaigns targeting high-populated transient locations like train stations and universities, directing users to their nearest vending machine, seeing a 12 pt uplift in units sold.

If brands take the time to set up for local now, it will only continue to add value, with things like dynamic pricing being on the cards in the not so distant future. For example, if you’re a beverage company, you could promote a popular beer, and have its price change dynamically based on state or local events, driving each audience to the nearest local bottle shop, all over Australia. Your ad could even give them directions there if they’re on their mobile.

It’s not just about location, it’s about personalisation
Google data shows that 66% of people want ads personalised to their location. But even with all of this focus on location, remember that geography is just one part of Local Area Marketing. The reason people respond so well to local advertising isn’t just because the business is nearby – it’s because it feels more relevant.

We know that when brands offer personalised experiences, people are more likely to purchase. By using tailored, local advertising, brands can increase that level of personalisation and drive a higher return on ad spend, getting twice the reach and twice the impression rate.

For example, when Spotlight recently ran their ‘Make it Month’ campaign, instead of running a one-size-fits-all approach, they used their VIP data to create campaigns that spoke to the customers’ known interests and recent purchases, driving them back to their nearest store. Having such a relevant campaign in market resulted in a 25x return on ad spend.

Tracking customers from online to offline
One of the biggest challenges for marketers has always been attributing in-store sales to advertising. How do you know which ads led directly to in-store sales? Now, by running local campaigns, using Wi-Fi signals, tracking cookies or loyalty cards, we can measure people walking into retail stores and tell the business exactly which campaign they came from and what pages they saw.

Making the move to local
If you want to trial local advertising and test its success, one way to do it is by starting with a control group. For example, isolate one SKU across all activity in one state and measure the effect of digital advertising to offline conversions.

Carman’s Kitchen did this, sending hyper-local Facebook ads to nurtured audiences from brand campaigns, which were relevant to where they lived or worked. The results showed the value of driving users into their local supermarket, with an average 18% incremental revenue lift.

Conclusion
Technological advances now allow brands to tailor campaigns to a level of hyper-local personalisation that was previously impossible. Such campaigns have consistently shown this approach improves budget efficacy, relevance and gets a higher return on ad spend. It’s a win-win-win for brands, and marketers who don’t do this in 2020 will be missing a major trick.

Troy Townsend is CEO of Tiger Pistol Australia, a tech-led performance marketing agency.

 

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