Comparing Enterprise and SMB Attitudes on Local Tech

Selling hyperlocal marketing technologies and services to both multi-store brands and local merchants might seem to be the best way for a would-be provider to reach scale. When you boil it down, they’re trying to achieve the same objectives, right? Of course, it’s not that simple. According to recent surveys, both types of marketers are shifting budgets to digital — particularly to social media and email marketing — and they both say they’re interested in exploring the same two newer technologies. But it’s also useful to note where they differ.

To help suppliers understand marketing trends and customer attitudes, Street Fight is writing a series of reports based on two first-half executive surveys. Street Fight’s Local Merchant Report 2017 is the first, based on a survey of 250 small and medium-sized businesses with physical stores. And I’m in the midst of the analysis of our just-completed 2017 Enterprise Local survey of 250 big brands and retailers that do local marketing in support of their branches, franchises, and resellers. I presented some data for comparison at Street Fight Summit in Brooklyn a couple of weeks ago.

Both the brands and the local merchants are increasing the digital portion of their marketing spending. Over half (57%) of local merchants surveyed said that was the case, and 40% of the enterprise local marketers agreed. Both types rated social media and email as their most effective marketing tactics overall, with the small businesses being most enthusiastic. They tapped social media as the top area in digital for budget increase, with email and their local website close behind. Likewise, more than half of the enterprise local marketers said they planned to increase spending on social media, followed closely by local sites and paid search.

The groups don’t differ that much in this area. The small businesses started the shift away from traditional media to digital marketing more aggressively than the big brands, and they’re doubling down on their most effective tactics. The brands are now moving more rapidly, but continue to use a broader variety of marketing and advertising. The rank order of the digital tactics identified for budget boosts varied somewhat between groups, but only low single-digit percentages of either group said they were cutting back on any digital category. Rather they were either maintaining or increasing spending on all of the digital marketing categories we asked about.

And both groups have similar new hyperlocal tech topics on their radar screens. The figure below illustrates which newer marketing technologies the respondents were interested in exploring. We presented somewhat different choices in the two surveys, as appropriate.

The most noteworthy takeaway from this analysis is that both the enterprises and local merchants said they were very interested in real-time location data and mobile push advertising, which can go hand-in-hand. Intriguingly, relatively small portions of either group said they were using mobile marketing regularly. Of course, most social media and search usage is done on mobile devices these days, so the survey respondents may have been mentally de-emphasizing mobile as they reach mobile audiences by default. But I’ve also seen evidence that enterprises have been using location data to-date mostly for customer analysis, rather than for explicit geo-targeting. These new survey results imply a more aggressive approach to hyperlocal targeting on the horizon. 

Where the results show different attitudes is in the next group of technologies. The enterprise local marketers cluster around a group of four at the top: in addition to location data and mobile push marketing, a similar portion of them identified addressable TV advertising and programmatic ad-buying. (We didn’t ask the small businesses about programmatic.) TV advertising is the one traditional local channel that’s holding up for the big brands. Most still use it and many find it effective. As the infrastructure for targeting TV ads by set-top box slowly develops, and as over-the-top video proliferates, this will be a prime area for ad spending. “Programmatic” can mean different things, but ideally equates with buying audiences rather than media, whether via real-time bidding in exchanges or not. Suppliers will want to identify which aspects of programmatic are most appealing to a given buyer, whether it’s an operational, pricing, or audience-scaling issue.

Digital wallets and payments was the third most popular new technology for the local merchants, yet it didn’t register highly for the enterprises. It’s likely that the small businesses have their eyes on mobile payments, the responsibility for which lies outside of marketing or advertising at a big company. US consumer adoption of smartphone payments and wallets has been a little disappointing. I’ve written before about how loyalty programs could help jump-start the use of wallets, but agencies and other service providers may face a tough sell here.

Finally, it’s worth observing that perennial hot topics like beacons, ‘bots, and voice are probably farther off than the pundits suggest. Street Fight is a big believer in the impact of voice on search and discovery, but I’ll concede that marketers are putting off serious investment on the technology for at least 18-24 months.

David Card is Street Fight’s director of research.

Click here for more on the Street Fight Insights report, The Local Merchant Report 2017.