The Local Lift: How Localization Impacts Ad Performance in Display, Search & Mobile

picture

Precis

Notwithstanding the record growth of e-commerce this holiday season -- now approaching $25 billion in the US -- roughly 95% of retail purchases still happen in stores. In addition, the multibillion dollar SMB-dominated services industry exists in a predominantly "offline" world, in terms of fulfillment. But more and more consumers use PCs, laptops, smartphones and tablets for digital research before buying locally.

Local digital advertising has always been difficult for everyone in the ecosystem. Media buying and campaign measurement challenge national brands and agencies, as they confront a fragmented local media environment and generally can't (or don't) measure the offline impact of online campaigns. Small businesses confront complexity and confusion about what to buy and what's effective. The story is familiar to anyone operating in the local digital media space.

As suggested, the dominant paradigm for consumers is shop online, buy offline ("SoBo"). One would thus assume that advertisers would "get" how important it is to connect online shoppers with stores and locations where they can buy products or obtain services (in addition to showing them e-commerce options). But many marketers, remarkably, still focus almost exclusively on e-commerce, which is significant but ultimately a much smaller opportunity.

One problem is that many marketers simply don't "see" the offline impact of online ads. In addition empirical evidence of the online-offline effect has been lacking. There's really never been conclusive evidence of the efficacy of localized online media vs the broad reach of "generic" or national advertising, which is easier to buy and create. If localization has existed it has typically been on "page 2" or the landing page in the form of store locators. (Small businesses are somewhat different because they typically operate in single markets.)

In the attached presentation we compiled evidence from numerous sources (some of it previously unpublished) that shows localized ads outperform “generic” national ads. It makes the case for localized ad creative. Indeed, consumers generally consider ads with localized content more relevant and respond accordingly. These data show that without question. 

The results of the various tests, studies and cases presented in the slides show that the "Local Lift" is also directionally consistent across digital ad platforms: geotargeting and local ad creative boost engagement and ad performance in display, search and mobile. 

Featured Research is available to registered users only.

For more information on becoming an I2G client, please contact Pete Headrick (pheadrick@opusresearch.net).