Vantage Points: The ‘New Local’ is Both Plumbing and Poetry
This is the latest in BIA/Kelsey’s Vantage Points series. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. The views expressed do not necessarily reflect that of BIA/Kelsey. Please contact mbolandATbiakelsey if you have insights to share.
The New Local: MarTech and AdTech for National Brands
By Rex Conklin
The statement “all politics is local” takes on special meaning in a national election year. This phrase, made famous by former Speaker of the House Tip O’Neill, mirrors what marketers have always known — that all business is inherently local.
Sales are won city by city, block by block and customer by customer; customers who vote with their wallets and decide winners and losers in a competitive marketplace.
National advertising is highly effective, but contests are often won on a local level, where battleground markets can make all the difference, particularly in a close race.
According to recent forecasts by BIA/Kelsey and eMarketer, roughly 75 percent of total ad spending will be local in 2016. In addition, BIA/Kelsey estimates that approximately 40 percent of local ad spend is being invested by national brands.
There’s the rub. Between direct competitors and sellers of substitute goods and services, brands will be outspent in key local markets if they rely solely on national advertising, no matter how grand the budget. And the solution isn’t as simple as merely “heavying up” in local markets with the same national strategy and messaging.
Politicians and brands face similar challenges in achieving meaningful differentiation while addressing local tastes and preferences, share, competitive pressure and the like, while facing significant resource and budget constraints. Smart utilization of data and technology are necessary to drive superior results.
Barack Obama’s campaign wowed the marketing world in 2008 with an unprecedented use of data and technology to successfully target and rally young voters. And they did it again in 2012, effectively challenging all marketers to improve their marketing technology skillset.
Since 2012 the importance of both local marketing and local politics has not changed, but the opportunity to efficiently reach potential voters and customers with relevant messaging, at scale, continues to change at a rapid pace.
Advances in marketing technology and ad technology have opened the door for national brands to help cut through the complexity and perceived high cost of local advertising to help win incremental profit and market share.
Swift and significant strides are being made on the local front. Local ad sellers and technology providers are stepping up to meet marketers’ needs.
Not surprisingly, digital growth in local advertising is growing quickly, driven largely by mobile and social. BIA/Kelsey estimates that digital will command 29.1 percent of local ad spending in 2016, with a 5-year CAGR of 11.7 percent (2015-2020). National ad spending forecasts paint a similar picture.
Adtech continues to improve, helping to more efficiently and effectively deliver the right message to the right customer at the right time and providing stronger returns for marketers, both nationally and locally. Yet, as important as it is, I would argue that our collective attention is disproportionately weighted here.
Our near obsession with adtech brings with it a high opportunity cost by diminishing the attention paid to martech. To paraphrase Rishad Tobaccowalla, chief strategist at Publicis Groupe, if adtech is the plumbing, martech is the poetry. We need both the poetry and the plumbing to succeed.
It’s time to refocus and better leverage the enormous potential that lies in knowing our brands, understanding our customers and developing relevant, targeted, persuasive communication that differentiates and drives sales. Martech helps us craft that poetry.
Even with, or perhaps despite, unprecedented access to data, beating the competition to the customer is more complex and challenging than ever.
In an increasingly fragmented media landscape, custom messaging delivered at scale requires a significant investment in the right martech tools to successfully connect brands with customers, drive successful business outcomes and deliver competitive advantage.
While every brand needs a unique blend of these ingredients, a common thread exists: we are ill-equipped to take full advantage of the adtech revolution without continuing to invest appropriately in the evolution of marketing technology.
From actionable data-driven consumer insights to marketing automation to analysis, attribution and optimization, we need marketing technology to craft the poetry that inspires consumer choice and leads to victory. More often than not, it’s a series of key local wins that delivers the national prize.
Rex Conklin is a media industry leader with a documented history of building innovative integrated marketing communication programs that have grown brand equity and generated over $500 million in incremental marketing-driven revenue.
Related: Brand-to-local marketing will be a central topic of BIA/Kelsey BRANDS, March 22nd in New York.