Companies selling local marketing and technology and services continue to believe that online-to-offline attribution is the toughest challenge facing the industry, and it’s now their top near-term R&D priority. That’s what we’re hearing from a preliminary analysis of our annual State of Hyperlocal survey of Street Fight readers.
I’ll be presenting other findings at the Street Fight Summit West in Los Angeles tomorrow. So far, we’ve got over 75 respondents to our online survey, from mostly senior management at local tech companies, agencies, publishers, and local data and analytics providers. The results should help companies compare and adjust their R&D spending and marketing tactics, by taking the pulse of their peers as well as comparing their responses with those of their customers and prospects at local small businesses and multi-location brands that we surveyed earlier.
As shown in the figure above, attribution, along with a handful of industry-structure issues are deemed the most difficult challenges facing the industry overall, as opposed to their own company challenges. These attitudes are similar to what we heard in our previous survey. We offered a slightly longer list of choices this time around, but the rank order of top challenges hasn’t changed much. This year, industry fragmentation seems to be a little tougher than the dominance of big companies like Google, Facebook, and Apple. And pricing pressures may have eased just a little bit.
Companies that serve enterprise local marketers are more likely to rate attribution as difficult than those that sell to SMBs. The small business specialists rank the complex or fragmented ecosystem higher. Both groups have identical attitudes about unrealistic technology expectations among either customer base. Agencies, publishers, and data suppliers appear to be more concerned about attribution than do technology providers. The tech vendors rate ecosystem fragmentation and big-company dominance as the top challenges, and equally problematic.
They’re also less likely to be investing their own R&D in the next 18 to 24 months to solve the online-to-offline attribution issue. Unsurprisingly, the data analytics companies and agencies are the ones that drive attribution to the top of the list shown below. Mobile ad tech is their top priority, followed by location data and analytics.
Companies with enterprise customers are strongly prioritizing location data and O2O solutions with their development spending. Those that supply smaller local merchants may be focusing R&D more narrowly on product solutions. Many rated presence and listings management as their top priority. That’s not a bad idea, as local SMBs Street Fight surveyed said the areas they needed the most help were SEO and paid search. Compared with last year’s analysis, social media seems to have been de-emphasized somewhat. While that might be a reflection of Facebook and YouTube dominance, it’s still the area that both multi-location brands and SMBs rate as one of their most effective local marketing tactics – along with email – and the tactic on which they said they were most likely to increase spending. And the vendors confirm they’re still seeing social media spending increase.
The chart above only shows the options that more than 15% of respondents listed as among their top three priorities. Technologies such as chatbots, beacons, augmented or virtual reality, and mobile wallets didn’t rate very high. We also asked which marketing and commerce technologies were so important long-term that they needed investment even without immediate payment. Location data and analytics is the top response so far, with geotargeting and AI analytics next on the list. Voice technology is also showing up, but mobile wallets and AR/VR continue to pretty low priorities.
Voice input has reached critical mass among consumers, and its impact on local search results, key word or phrase management, and listings schema will be profound. Yes, consumer adoption of wallets is low – disappointing in fact. But the combination of wallets, location data, and point of sale data is probably the best path to a solution for online-to-offline attribution. AR/VR interest among marketers is fairly low right now, but over time AR will be a key differentiator in the online-to-offline shopping experience.
David Card is Street Fight’s director of research.