Local ROI Trumps National ROI

BMWZak Pines of LiveTechnology Holdings sent me some DMA data, which reported the following:

[A]uto retailers who spent $7.3 billion on direct marketing campaigns in 2007 saw it drive $248.1 billion in sales, a return on investment of $33.81 on every dollar spent. At the same time, the auto manufacturers spent $8 billion on direct marketing advertising in 2007, realizing $77.8 billion in sales, or a $9.68 ROI per dollar spent.

Local auto dealers in the aggregate thus spent somewhat less than auto OEMs and got a better return, about 3.5X better. One conclusion to draw here is that the local ad spend is more efficient and closer to purchase than the OEM spend, which is about branding typically and tries to stimulate demand. But in another sense these data suggest how “national” and “local” spending are symbiotic and can work together. (This can be extended to online as well.)

Here are the top online OEM display advertisers and the sites/networks where their ads appear (per comScore):


Sites for OEM Ads

Video advertising in Google AdWords should over time boost Google’s ranking in this list. (Yahoo also offers video ads in paid search.)


2 Responses to “Local ROI Trumps National ROI”

  1. Weekly Wrap Up - Industry News, 30 May 2008 | LocalPoint - Perspectives on the Local Internet Says:

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  2. Writers Block….Local Search Worth It? Says:

    […] Online local marketing is growing very rapidly and producing results: a. Greg Sterling posted Local ROI Trumps National ROI where he quoted: “Local auto dealers in the aggregate thus spent somewhat less than auto OEMs […]

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