We Need a New ‘Local Framework’

For too long “local” on the Internet has been “off to the side” as a much talked about but under-performing curiosity. Major ad networks have boomed, social media has been hyped, search has been celebrated. But it all leads to one place — the point of sale. And in 95%+ of the cases that’s in a physical, local place.

Products, services, it doesn’t really matter; e-commerce is a fly on the posterior of an elephant. That “elephant” is the local market.

E-commerce vs. Offline

The Internet is fundamentally a research tool that helps people decide what to do and where to spend money — offline. Travel is an interesting hybrid and something of an exception. But everything else is a footnote to Internet-influenced offline transactions. When I talk to people and tell them what I cover I say “the impact of the Internet on offline consumer purchase behavior.” Reactions are interesting; people are typically surprised but then a light bulb goes off and they get it.

Historically however the discussion about “local” has largely been about restaurants and about the difficulty of aggregating small business advertisers. But that’s only a part of the story. Thought about and seen correctly, local swallows everything else going on commerically online. So why do I feel like I’m almost alone in repeating this message?

It’s because the ad infrastructure (and tracking) and advertisers themselves (be they large or small) haven’t caught up to consumers. The process hasn’t been “transparent” enough to everyone.

In order to put local in its proper context, I’m now convinced we a new discussion framework to talk about it and make it accessible to a broader group of advertisers. We need to talk about demographic targeting or leading consumers to the POS. But the Internet itself is highly fragmented and local even more so. It’s difficult for agencies and advertisers to coordinate campaigns and make a “brand” buy and then tie that to locally targeted ads where people can actually buy the thing being promoted. (Marchex is attempting to do something like that with its new AdHere network.)

Certainly there are efforts to build “direct display” or “branded response” ads that help people find local dealers or vendors. And mobile marketing is being used to varying degrees this way. Ultimately, however, online and traditional media must be integrated to help build awareness and then show consumers where to buy things. At a crude level this is what consumer behavior looks like:

Media flow

This is more or less what Google found with a study (12/07, n=1003) it did on newspaper print ads and response to those ads:

Picture 12

Picture 17

Picture 18

This 38% figure is high and not representative of the population as a whole. But it illustrates in a very specific way the relationship of traditional media and online consumer behavior. This is a complete picture of what’s going on. And online is a mirror of this, with consumers moving from site to site for information:

Purchase funnel

The dots need to be connected up and down the line to help lead me from offline prompt or stimulus to online research/consideration to a POS offline. Once that becomes more transparent for advertisers then the Internet’s full potential as an advertising medium can be realized.

3 Responses to “We Need a New ‘Local Framework’”

  1. Bad News, Good News for Newspapers « Screenwerk Says:

    […] that large advertisers cannot and should not abandon traditional media (see also the discussion of findings re the “synergy” between newspapers and online). They must learn to integrate and combine traditional and online more […]

  2. Wothwhile Reading from Greg Sterling | LocalPoint - Perspectives on the Local Internet Says:

    […] Sterling has written a thought-provoking post: “We Need a New ‘Local’ Framework,” presented with some graphic illustrations. Some excerpts to prompt you to click on the […]

  3. What Folks Are Saying about Local Advertising Says:

    […] We Need a New Local Framework by Greg Sterling […]

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