Media Companies Are Betting on Hyperlocal, But Will Brands Follow?
August 17, 2012 3 Comments
Google, Nike Making Plays But Most Marketers Will Need Better Payout to Shift National Dollars to Regional
It’s rare these days to hear a positive story about the newspaper industry, but I recently learned of the Pembroke and Pembroke Docks Observer, a newspaper in South Wales that decided to bet its future on a hyperlocal strategy. It focused almost entirely on covering local news, local people and local events while soliciting community-generated content — a package not provided by the larger county or national titles. It was rewarded with a doubling of its circulation.
Its owners say their success comes down to remaining local, personal and relevant to their community. That idea has a lot of merit for national brands in the U.S.
We are programmed to play nationally. The national 30-second spot in an “American Idol” or an NFL game is king. While there is clearly an efficiency and value in maintaining a national presence, however, it’s become even more important to engage consumers in order to truly grow brands — or disrupt your competitors. It’s also becoming harder to do. Being relevant locally, as the Pembroke and Pembroke Docks Observer discovered, can be a powerful recipe for growing market share.
“There’s no such thing as a national customer,” a client once said to me. “Just lots of local ones.” And it takes insight into local tastes, local demographics, local issues and local competitors to be relevant and win the consumer. Organize national, act local is starting to get some traction. But the media are leading the way.
Media properties’ local targeting is increasingly offering more precision. Hyperlocal websites are providing local content and localized national advertising platforms by individual towns.
Google recently announced last month the ability to buy search by ZIP code, and again bet on local yesterday when it said it had agreed to buy Frommer’s, including 350 travel guides and a website covering more than 3,500 locations.
Addressable TV is beginning to scale. By end of year, we will be able to target by individual household in 22 million homes. And the large national radio groups have become highly effective on-the-ground local marketing partners on-air, off-air and online.
The question is whether major national and international marketers will invest the time and money to take advantage.
Some sophisticated marketers are moving in that direction. Walmart has introduced a Facebook app customizing marketing for each of its nearly 3,600 U.S. locations, including a dynamic social billboard that serves as an electronic circular with details of sales, special product deals and recipe suggestions. This is a smart local program to move the huge national chain closer to its community.
Nike has been creating city-specific epicenters to spark buzz and credibility for its brand. Its global online reality web competition series “The Chosen” was fueled by local grassroots skating and surfing events. In the U.K., Nike held a 15-day challenge for runners across 48 different post codes in London, using some nifty technology to measure and rank their performance.
The increasing ubiquity, not to mention portability, of mobile media will almost guarantee that all marketers will need a mobile media strategy. And central to that strategy is the ability to embrace location-based messaging and promotion.
National brands are experimenting there. L’Oreal promoted its Vichy line using timeRAZOR, a mobile app to promote and schedule one-on-one beauty consultations at Duane Reade locations in New York, an effort that led to a 150% increase in sales for that promotion.
Search is clearly another major opportunity, with the BIA/Kelsey Group that local searches on mobile phones will exceed local searches on desktop computers by 2015. Perhaps the iPhone’s Siri, which uses Yelp’s reviews, will start to offer brand recommendations in the not-too-distant future.
But ultimately most marketers will need a better payout to shift national dollars to local, posing a riddle for the media companies betting so much of their own money on a local strategy. Data will have to be the compass for media sellers and buyers alike. Mobile ad network xAd recently published data showing that locally-targeted mobile display ads deliver 5% to 8% click-through rates, compared to 0.6% for typical mobile display ads.
There’s no doubt that local will be an increasing play for national marketers. It’s what brands need to do to engage consumers and grow. However, it is going to be more challenging for marketers to execute and more costly and complex to orchestrate. But the possibilities are exciting.