In segmenting the small business market, we always either speak of industries and verticals, or national advertisers who spend locally vs. SMB-local advertisers. Sometimes franchisees are thrown into the discussion (there are reportedly 320K in the US).
Not even the US government knows how many national advertisers there are that buy local media or have a local presence. I spoke to someone at the SBA at some length about this question recently.
There is however is an interesting, and perhaps more productive way to segment the local market. That way was described to me by Wayne Reuvers, CEO of Live Holdings. This is the way his company looks at the local market:
- “Branded branches,” (e.g., Bank of America), which reportedly comprises 60% to 65% of the advertiser spend. This might be thought of in the conventional approach as the “national-local” segment.
- Co-op sellers (e.g., insurance or real estate brokers/agents), which represents the second largest part of the local ad spend at 305 to 35%. In the conventional way of thinking, this group comprises the franchisees (in many cases) and the national-local segment as well in some cases.
- Independents, comprise 1% to 2% of the overall local ad spend. This is a numerous group but with little to spend relatively speaking. These are the lawyers, plumbers and so on.
This segmentation may be much more helpful for publishers and sales channels in formulating ways to think about an approach to the market.
Update: People are commenting and disputing these percentages. Live Technology is the source of the percentages and we can validly debate them. The point I’m trying to make is that this is an interesting, alternative conceptual approach to segmenting the market.