Survey: Multi-Location Brands Continue to Shift Digital Budgets to Local

Street Fight’s latest survey of multi-location brands reveals they continue to shift digital marketing spending to support their local branches and resellers. Many still find some traditional media more effective than most digital tactics and focus their digital efforts on the corporate e-commerce site or company branding. But an aggressive group of budget shifters are increasing spending across a variety of digital advertising and marketing vehicles, based on their own success.

The results from our June survey of 250 local marketing managers and decision-makers at large at multi-location companies bear out a continuing trend towards local marketing spending. Last year, just over 60% of survey respondents said they spent less than 30% of their digital marketing on local. That figure is 56% in 2018. And, as shown in the figure below, while half are maintaining that local mix, well over a third say they expect it to increase, with almost one in 10 planning to expand it by 15% or more. (Forty percent said they’d increase their local mix last year.)

The respondents who are increasing their local mix are similar to the overall base of respondents in terms of size, number of locations, and industry. Since they’re moving dollars around, we wanted to know where, so we asked how their spending on six digital marketing tactics and customer sentiment analysis was likely to change this year.

Like the overall respondents, the vast majority of marketers increasing their local mix were either maintaining or increasing spending on each of the tactics. But the budget shifters were far more likely to say they were increasing spending across the board. On average, half the shifters said they were increasing spending compared with something over a third of all surveyed. The biggest differences were in paid search (57% of the shifters were increasing), local sites and presence management (50%), and customer sentiment analysis (44%). More said they were increasing search spending than social, the top category for the overall base.

To identify best practices, Street Fight compares self-reported effectiveness with spending, technology usage, and other marketing operations issues. We asked respondents, “How effective would you say your company’s digital local advertising and marketing is at the following objectives?”

In the figure below, the green bars represent how many of the entire survey base rated their efforts as “very effective.” The orange bars show the portion of the ones that said they were increasing their local mix.

In this case, it’s more likely that the correlation of effectiveness and spending represents cause and effect, rather than a best practice. That is, I’d interpret the fact that the mix-shifters were about half again as likely to rate their efforts “very effective” at the objectives as the reason why they plan to spend more locally.

Let’s look at some other characteristics of the budget-shifters, to understand what’s making them effective:

• They’re similar to the average in that they use a broad variety of traditional and digital marketing and advertising. Everybody uses email; where the budget-shifters are different is that more of them regularly use online display advertising outside of social media. They’re also more likely to use streaming video and re-targeting techniques.
• That said, more of them still rate direct mail, television, and print among their top five most effective tactics. Over 30% put their social media company page(s) on that list, and nearly as many add their local or branch office sites. That’s more than have email in their top 5, even though email tops the list for the average respondent. In contrast, more of the shifters rate online display ads as effective
• They collect a broader variety of customer data than their peers. Notably, they’re more likely to use third-party sources, including shopping data, location data, and media ratings.
• They also use more tools and services to manage and evaluate their local marketing and advertising. More of them use reputation management and listings management services, and more use a third-party digital dashboard.
• The newer local technologies they’re interested in exploring are similar to those of the overall base. Mobile payments and wallets are higher in their top 3, and more are interested in addressable TV ads than average. Location data and mobile push offerings also often make the list.

Finally, with Facebook controversies swirling and, now, its stock tumbling, let’s compare the mix-shifters’ attitudes toward Facebook as a marketing platform. It turns out they’re pretty similar to those of their peers. They’re slightly more uncomfortable but will continue using Facebook as previously (40%). But just like the others, only 3% said they’d stop using it.

David Card is Street Fight’s director of research.

Click here for a free copy of this year’s State of Hyperlocal report.