“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Frost Prioleau, CEO and co-founder of Simpli.fi.
The average small and medium-sized business (SMB) in the US spends about $400 a month on marketing, according to the US Chamber of Commerce’s 2013 SMB Internet Marketing Survey. Of that $400, 46%, or $184, is dedicated to digital advertising.
For most local advertisers, the best route to leveraging digital for their business is through a locally focused advertising network or their local media publishers. These types of entities can coordinate their marketing budget across several channels including search, online directories, mobile and, increasingly, targeted display.
At first glance, it would seem that local advertisers have the most to gain from programmatic marketing, with its high volumes of inventory from which to choose, precision audience targeting, highly optimized campaigns and spending efficiency.
But after allocating the majority of the digital spending to pay-per-click and online directories, the amount left over for display, mobile and video is often $100 or less. This $100 is further split across targeting tactics, such as site retargeting and search retargeting, resulting in campaign budgets of $1 or $2 per day.
While their budgets are low, the local advertiser’s targeting expectations are high. SMBs expect their ads to be served on high-quality inventory while driving a variety of key performance indicators, including clicks, online leads, incoming calls and foot traffic.
Unfortunately, most programmatic technology has been designed for the large scale of national campaigns. Not only are optimization algorithms and budgeting systems typically built around larger volume campaigns, the big data that is often used is bundled into prepackaged segments meant for national campaigns.
For example, while Toyota dealers across the country presumably want to target auto intenders, there’s a big difference between types of cars moving off the lot in Fort Worth, Texas, and Silicon Valley. While the Texas dealer may want to target an audience that is more interested in Tundra trucks than Priuses, the dealer in Palo Alto would likely want the opposite. The ability to customize targeting to a local audience could be the difference between a programmatic campaign that delivers results for a local advertiser and one which causes the advertiser to write off programmatic as a tactic for only national campaigns.
Search has worked well for local advertisers precisely because it enables advertisers to customize campaigns to local needs. Just because a campaign works in Portland, Maine, doesn’t mean it will play in Portland, Oregon. In order to be effective for a local advertiser, programmatic marketing must enable advertisers to target the right combination of keywords and context so that local marketing makes sense. This may include:
- Regional culture and nomenclature
- Local events, festivals and sporting events
- Specific regional competitors
- IP ranges of nearby universities, military bases and corporations
- Tight radius targeting and geoconquesting
- Contextual advertising with local publishers
So what does it take for a SMB with a small campaign to get the most out of big data in a display campaign? Ironically, it takes using data in its smallest unit: an individual data element. By working with granular, unstructured data, local advertisers can create customized campaigns that work at any budget level.
Not only is this good news for the local independent dry cleaner purchasing targeted display through his or her local media advertising representative, it also opens a whole new level of campaign optimization for any multiunit retailer, franchise company or chain restaurant that depends on local awareness and conversions.
SMBs and big brands alike have grown accustomed to the detailed targeting and insights available in search, where they see how each search term delivers and performs. By using data in its raw, unstructured format they can maintain that targeting when they move into display.
When that is possible, to paraphrase Tip O’Neill, perhaps all advertising can be local.
Follow Frost Prioleau (@phrossed), Simpli.fi (@Simpli_fi) and AdExchanger (@adexchanger) on Twitter.
