Survey: How National-to-Local Marketers Plan to Grow Their Digital Budgets

Big national brands and merchants have been increasing their focus on local marketing, and hyperlocal digital is becoming a bigger part of their strategy. Street Fight recently surveyed decision makers at these national-to-local marketers and found that nearly half of them spend a third or more of their digital marketing budget in support of their franchises, branch offices, and distributors. They’re more biased towards traditional marketing at the expense of digital than small business marketers, but they’re planning on growing digital budgets. And the majority told us they planned on increasing spending on social media and mobile marketing, with email, display, and local websites also tapped for a boost.

For this study, in January and February Street Fight surveyed managers and decision makers at over 200 medium-to-large companies that market locally. Over one-quarter of the respondents had corporate revenue of over $2 billion, and a third were supporting more than 500 stores or partners, with a mix of retail, financial services, and other industries.

As you’d expect, these marketers use a variety of traditional and digital marketing techniques for their local operations. They rated email as their most effective local tactic, but deemed many other digital means less effective than direct mail, local print, and local TV and radio. In fact, many said they didn’t use common digital marketing technologies regularly to support local business. This likely indicates they’re using digital marketing primarily to drive traffic to their corporate website at the expense of local stores. That’s a missed opportunity suppliers should address.

Nearly half (45%) said last year they spent over 30% of their digital budget locally and a quarter spent over 50%. The majority expect that mix of spending to stay the same, but 40% said it would increase somewhat (30%) or substantially (9%) this year. That’s very healthy, with few expecting any cuts.

As shown in the figure above, most of the national-to-local marketers are planning to increase digital spending on social media marketing and on mobile marketing. Over 40% will up spending on email, display advertising, and local sites, and over a third on paid search. Across the board, very few respondents said they planned any decreases: only 6% said they are going to cut back on paid search, the most vulnerable budget.

The national-to-local marketers that said they were going to boost digital budgets don’t fall into neat buckets. Big companies, retailers, financial services, etc., did not show particularly distinctive patterns of response. The companies that said they were growing their digital spending the most include:

• Those already using mobile in support of local (26%)
• Those that said they were very comfortable working with startups or smaller marketing partners (21%)
• Those that said local media was important for their marketing (23%)

There was a lot of overlap among those groups. And that group of heavy local spenders – the ones that spent over 50% of their digital budget locally – also behaved similarly to the rest. They were a bit more likely to tag display and search for increases.

We asked the survey respondents which of a list of relatively new digital technologies their company was most interested in exploring in the near term. As shown above, even though local mobile marketing is, at best, nascent with this group, they’re pretty excited about mobile push offerings. Nearly a third seem likely to invest in real-time location data, and over a quarter are looking at buying ads programmatically across digital and traditional media. Meanwhile new technologies like beacons, AI, and wearables still seem to be a way off.

The biggest national marketers — respondents with over $2 billion in revenue — favored those top two also. More of them (40%) were into real-time data and next-generation point of sale systems, and they tended to rank mobile wallets and geo-fencing higher than their smaller counterparts.

As I wrote recently, these big brands’ top pain points centered on tools integration. Nearly half (43%) of the respondents said making different marketing technologies work together was difficult, and 39% complained about data analytics tools. Suppliers of marketing technology and services – even startups and little guys – can take advantage of national-to-local budget growth by helping marketers:

• Coordinate traditional and digital analytics and ROI metrics; tie in traditional media
• Get deeper into mobile in support of local branches and distributors
• Build off existing social media and email marketing programs (another good traditional media integration point)
• Understand how local search is evolving, especially on mobile devices

David Card is Street Fight’s director of research.