There’s been a quiet emigration in the local technology world away from the mom-and-pop market, with startups and existing players alike moving upstream to bigger brands with bigger budgets. But as technology opens new doors for national companies to message consumers locally, there’s still reticence among brand marketers. During a panel at Street Fight Summit in New York Thursday, executives from Groupon, YP, and the well-funded upstart Brand Networks sat down with AdAge’s Michael Learmonth to talk about the growing interest in local among brands, and the limitations that are holding them back.
“The idea of going from a national publisher and advertising strategy to thinking about marketing at a store level, and enabling managers and franchisees with the ability to publish locally, is scary for brands,” said Jamie Tedford, CEO of Brand Networks, a social marketing firm that’s built a big business helping brands target on Facebook locally. “We’ve seen the social industry go from every barista having a Facebook page, to brands consolidating power, and now it’s coming full-circle with the barista getting their voice back.”
For brands, the emergence of big audience hubs like Facebook and Twitter solves some of the issues around scale that have traditionally kept brand marketers at bay. But transforming the way brands buy media also means changing the way marketing departments are structured and decisions are made – a shift that’s starting to happen, says Rajen Ruparell, SVP Global Sales, at Groupon.
“There’s been a big shift within a retailer’s management structurez in recent years so that they’re much more localized; there’s much more independence,” Ruparell explained during the panel. “Five or six years ago, the [marketing] decisions were made centrally and now we’re seeing a shift in the dynamic, where decisions are being made locally.”
But as money begins to flow and brands start to invest materially in local marketing, measurement – or the lack thereof in local – has become a more pressing issue for ad tech companies. New technology in-store offers some recourse down the road, but there’s still a big gap in what marketers claim and what they can prove in local.
“We’re well past dipping our toe, and the money is only going to flow to an ROI positive place; so that means doing the hard work of tracking [and attribution],” said Tedford. “What makes local seem hard isn’t targeting; it’s the conversion.”
Part of the problem is that the growth of tracking technologies has been stymied by privacy concerns over the ways emerging analytics firms are tracking users well after they close their device. In conjunction with a number of analytics companies, U.S. Senator Chuck Schumer rolled out new guidelines earlier this week to ensure that shoppers are aware that they are being tracked and capable of opting-out.
But many in the industry believe that the privacy issues will fade as consumers become more familiar with the technology. “In the end, the consumer is the judge,” says Ruparell. “If you look back twelve years ago, most of us we’re unconformably putting our credit card online. Our goal post as consumer have change tremendously. And those changes will continue to change.”
As consumer adapt, technology companies are racing to capture the local market. The growth of mobile paired with the emergence of massive consumer destinations capable of aggregating consumer demand, will open new opportunities for marketers. The question is who will win.
“Facebook like every social platform is in the race to own the local graph. We’re all walking around the world with a mobile device, and they want to be the operating system that finds [consumers],” said Tedford. “Facebook’s big bet is that because its app is used most, they can offer not just the location of a user, but eventually, get into Yelp’s and Groupon’s space as well. And ultimately they will play in the search. What they have, that no one else does, is the social layer.”
Steven Jacobs is Street Fight’s deputy editor.
For more coverage of Street Fight Summit, click here…