Report: More Than 70% of Franchisees Use a Digital Agency

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Franchisees or licensees of national companies (and their co-op spending) represent an important segment of the local digital marketing ecosystem, and a new report from BIA/Kelsey reveals that many of these businesses have begun to both accelerate their adoption of digital media and platforms, and also to work with digital agencies as they craft messages in new formats like video display ads, sponsored content, and native ads.

The report, which is part of BIA/Kelsey’s Local Commerce Monitor, found that 70.6% of franchisees are currently working with a digital marketing agency, up significantly from 50% the previous year. And over 51.8% of those surveyed who used an agency were working with a fairly small one (with less than 50 employees).

The survey also found that nearly two-thirds of franchisees use Facebook, making it the most popular medium for advertising or marketing — far outpacing direct mail, Google ads/services, email, and other media.

Interestingly, despite Facebook’s widespread popularity, it performed more or less at the middle of the pack in terms of perceived return on investment. While 65.3% of franchisees said they got excellent or extraordinary ROI from Facebook News ads, sponsored content was the highest scorer, with 87.2% of the franchisees polled touting the medium’s ROI.

“What people say they do, and what they get ROI from can often be vastly different,” Celine Matthiessen, VP, the company’s VP of analytics and insights told Street Fight. “We find that what people say they do and what they budget for can often be different as well.”

She said that franchises spend about a quarter of their budget on social media because “there’s always that need to be where consumers are.” But she says most franchisees still haven’t figured out exactly what the ROI is for social.


Meanwhile Matthiessen said that franchisees are adopting mobile platforms more rapidly — in particular, they significantly more likely than other SMBs to be using newer mobile services like tap-to-pay, responsive design, and beacons.

“When we look at our full survey of SMBs, only 3% say they use beacons, but when we look at franchisees segment, it’s 26%,” said Matthiessen. “They’re also using mobile tap-to-play at nearly twice the rate, and close to 60% use responsive design.” Other changes of interest in mobile from 2014 to 2015 on franchise use of mobile: mobile websites went from 13% to 25%; mobile location aware ads from 6.1% to 16%; mobile enhanced listings in an app (Like Yelp)  from 6.9% to 18.8%.

The growing prevalence of beacons and tap-to-pay in the survey is notable because it indicates that — at least among franchisees — these technologies are starting to become more mainstream.

The report, which surveyed 119 respondents, is segment of BIA/Kelsey’s wider Local Commerce Monitor that looks at small and medium-sized businesses with the company’s research partner, Ipsos.

David Hirschman is a co-founder of Street Fight.