Most sales are completed locally, from local businesses to local consumers.  To reach local consumers, businesses will leverage traditional local media: Newspaper, Yellow Pages, Radio and Television, to the tune of over $79 billion (http://www.rbr.com/media-news/advertising/11681.html) in 2009 to deliver their message.

Many businesses are disappointed in the return on their local advertising investment and are moving their spending to Internet based advertising. The low returns are the result of a misunderstanding many small business owners have of the purpose of traditional advertising media.

Small businesses are interested in sales. Newspapers, yellow pages, radio and local television are better at brand building, building awareness about a company and its products. They reach large audiences, however, it is almost impossible to target a message to the consumers that may be interested in a specific product or service. As a result, after many impressions, a large number of consumers may see the message and recall a brand, but only a fraction of those are interested in the product and will make a purchase decision. However, advertisement rates are based primarily on the total audience size that the media can reach. That is great if a business is paying for brand building. But if it is looking for immediate sales, it is guaranteed to be disappointed in most cases.

Direct Local Advertising enables local businesses to advertise directly to local consumers. Direct mail continues to be popular and successful because it allows small businesses to target consumers using demographics and location information to reach those most likely to be interested in their product or service. However, direct mail is static and does not capture the actual interests of the consumer. It is cheaper than traditional media, but conversion rates are on the order of 1%.

Direct Local Advertising seeks to move one step closer to one to one marketing between a small business and local consumers. By leveraging one of the best features of the Internet, the ability to personalize the display in real time based on viewer information, businesses are given visibility to expressed interests of local consumers. This information allows them target specific interested consumers and create attractive offers to convince those consumers to make a purchase decision. Offers can be refined in real time based on direct feedback from consumers, without the cost and lead times of traditional media. The result is increased sales, at a lower cost and greater satisfaction for local consumers.

Direct Local Advertising sites must build audience to give small businesses an adequate market to present their offers. However, because only a fraction of traditional media audiences are actually interested in a specific  product or service, the direct local advertising audience does not have to be as large to generate positive results for businesses. Businesses advertise directly to those interested in their product category. That is the most important audience where sales are concerned.

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These layoffs will continue to depress local economies and create more fear and uncertainty. While shoring up their financial positions large companies create a ripple effect that hurts the small businesses that depend on the spending of those laid off workers.

Another question is whether enough new jobs can be generated to re-absorb those workers over the next few years. Hopefully those promised “green jobs” and infrastructure investments pan out.

http://www.msnbc.msn.com/id/28854051/

On the opportunity side, this news will continue to increase coupon usage as consumers look to save money. Coupon site  traffic is increasing (http://tinyurl.com/67gev6), while consumers eliminate their land lines to save money (http://tinyurl.com/bg5wbd) relying on their mobile phones.

Consumers would take advantage of mobile rewards if the service contained more offers from the local stores that they are interested in. Even coupons.com contains only 58 offers that can be redeemed at stores in my area.

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Even in a recession small businesses still need to advertise. A local business owner told us that he spent $1500/month to distribute his coupons in local media, targeting over 300,000 homes and yielded 1200 redemptions a month. Thats a .4% response and a cost of $1.25/customer. He didn’t have the statistics to determine how many of those consumers were new customers.

The media used were primarily local newspapers, with some marketing emails sent from the corporate site, based on consumers going to the corporate site and filling out a form.

The resulting traffic was primarily the older demographic that read the paper and clipped coupons. The younger market was not being directly marketed to but learned of the location primarily through word of mouth. I spoke to students at a local high school a short distance away and though many knew of the brand, they had no idea where the store was, and frequented the competitor within walking distance from the school. Few knew that the business owner had a coupon offer that was unmatched in the area.

The focus of RewardFlow.com is to help businesses get their offers in front of interested consumers more efficiently. At the same time we don’t want them to leave their social consciousness behind. Many have reduced direct contributions, but we are hoping that they will still provide in-kind services or rewards that might increase traffic to their stores.

I am especially interested in seeing if targeting incentives toward student achievement programs can spur participation and increase student performance. Schools already do this in house, but additional incentives from the business community could encourage more students to participate.

admin Local Advertising cause marketing, education, incentives, Local Advertising, rewards