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National Advertisers in a Local World
By John Keister | September 26, 2007
“All advertising is local.” We are increasingly hearing this from yellow pages publishers, radio stations, newspapers, major search engines and others. But what does this mean in the online advertising world? And how do national advertisers like State Farm, Office Depot and REI fit into this online local advertising landscape?
Borrell did a study that showed in 2005, U.S. Local Advertising spending (YP, Newspapers, billboards, etc.) was approximately $140 billion (offline and online combined). 70% of that spend was done by truly local businesses, the rest was done by national advertisers targeting local markets. Total online advertising in 2005 (national and local combined) was about $4 billion. These statistics tell us two things: (1) national advertisers are an important driver of the local advertising industry; and (2) there is an enormous amount of potential growth for local online advertising as the offline spend of local and national businesses continues to migrate online.
National advertisers target local markets for a variety of reasons: Best Buy might target plasma TV sales in Beverly Hills and cell phone sales in Burien, Washington; State Farm might offer fire insurance in the Sierra Nevada region, and flood insurance in the Southeast; or, national retailers like REI or Kenneth Cole might be targeting locally to drive consumers to specific store locations. National retailers increasingly understand the importance of driving Internet consumers to physical storefronts, as offline purchases still far outweigh online purchases. In fact, Yahoo recently reported that 92% of conversions occur in the offline environment.
Given this consumer behavior, as the local online advertising industry grows, national merchants will be targeting a larger percentage of their advertising budget to address the local consumer by utilizing geo-targeted ads, driving consumers to local storefronts and offering great deals on their Web sites. Local advertisers, of course, will be doing the same thing. This means that both national merchants and local merchants are very important drivers of the local advertising ecosystem, and both will be competing for the clicks, calls and wallets of local online consumers as this industry continues to expand.
Topics: Advertising |
September 26th, 2007 at 5:54 pm
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September 28th, 2007 at 3:29 pm
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