#SFSNYC: Research Roundtable Shows Nuance of Defining Local and Mobile Effectiveness

Last week’s Street Fight Summit showcased a variety of research on local marketing; mobile advertising and commerce; and small business technology preferences. Analysts showed evidence of mobile’s impact and improving its performance, and reinforced that companies selling marketing tech and services must address ROI and attribution. Though both small businesses and enterprise local marketers say proving marketing effectiveness are top challenges, they may have different definitions of what that means.

The research roundtable panel at the Summit comprised four presentations on recent research initiatives from industry groups and a local-media research firm. Following are some of the key highlights from those presentations:

• Charles Laughlin, an advisor at the Local Search Association, introduced the LSA’s new Tech Adoption Index, based on twice a year waves of surveys of 1,000 small businesses. That survey revealed that just under a third of SMBs have moved customer resource management to cloud-based tools or platforms, with payroll/HR (25%) and marketing/advertising (22%) the next two most cloud-ified functions. CRM was also the category showing the most intent to move. Survey respondents showed a preference to purchasing add-on services from tech companies (62%) rather than local publishers or marketing agencies (36%), and were inclined to buy from a single provider by a similar margin. I’d say those figures represent a pretty solid opportunity for marketing services companies to sell solutions that bundle or at least integrate back- and front-office functions, even though they’ll have to compete with or add value to technology suppliers.
• Maggie Zhang, a Senior Director at the Interactive Advertising Bureau, showed US survey data that indicates mobile commerce may be farther along than you think. The LSA’s consumer survey showed that 34% of online adults made a mobile purchase within the last 12 months, and that of those who did, more than 40% did so on a weekly basis. The IAB’s study shows that it’s a multichannel world, and that “show-rooming” can work both ways. One in three in-store purchases are made after browsing online first, and one in four online purchases followed a physical store visit.
• Greg Stuart, CEO of the Mobile Marketing Association, compared the results of a series of case studies on mobile ad campaigns from big brands like McDonald’s, Allstate, Coke, and AT&T. The studies are rich in detail, and look at what the ideal mix of mobile should be for a given campaign, as well as which are the most effective formats and targeting tactics. One of my takeaways is that doing mobile advertising well is pretty complicated – all those issues are highly dependent on industry and objective (e.g., branding vs. conversion). On average, campaigns get a lot of benefit from a 12% to 20% mobile mix, that leads to an average of 17% lift in branding objectives or a 7% to 25% improvement in sales or profits.
• Corey Elliott, VP of Research and Analysis for Borrell Associates, presented a mix of survey and forecast data. Borrell believes that 2016 was the crossover year, where US local digital ad spending surpassed traditional for the first time. Borrell’s SMB survey shows patterns similar to those of Street Fight’s, including social media and email marketing as top digital tactics. Borrell’s survey also illustrated a potential dilemma for marketing partners: SMBs think it’s easy to figure out to whom to advertise, and to reach a targeted audience. Yet they insist calculating ROI is the marketing objective that’s hardest to establish.

Take a look at the two figures below, from material I presented at the Summit the day before the roundtable. The first is from Street Fight’s Local Merchant Report 2017, based on a survey of 250 small and medium sized businesses with physical stores. The second is from our 2017 survey of 250 big brands and retailers that do local marketing in support of their branches, franchises, and resellers.

As you might expect, budget is the top pain point for local merchants. But notice that proving that marketing drives customers into the store is their next most difficult challenge. And that definition of effectiveness noses out proving overall ROI.

For enterprise local marketers, ROI and/or attribution tops the list of difficult local digital marketing challenges. But as shown by the MMA presentation and by a panel of brand marketers at the Summit, brands have more diverse objectives for local advertising and marketing than SMBs. Many use location data primarily for customer analysis, or use mobile campaigns to drive online traffic or brand awareness. Some departments may demand proof of ad-buying efficiency before effectiveness. That is, how cost-effectively they can buy a given target audience, with the assumption that conversion will follow, fueled perhaps by a different channel managed by another part of the organization. They’ll do their media mix or multi-touch attribution analysis every now and then, but most campaigns will likely be measured by efficiency.

Providers of marketing tech and services will see the most success if they can handle the nuances of ROI in all its definitions, across objective, industry, and size of organization.

David Card is Street Fight’s director of research.

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