Here’s a general article on the local market from Business Week. Many people have seen it and emailed me about it.
It bothers me because it’s pretty superficial. And here’s a gem of a paragraph that no doubt captures the author’s personal experience and feelings (complete with dismissive tone):
What happened to the “everything is local” adage? The concept of local is morphing quickly in a world where instant global communications and social media widen our circle of friends and acquaintances to include the world. In essence, we’ve become national—if not international—citizens.
That is a bland and purely anecdotal observation that one might toss out a party without too much reflection. Beyond this, writer Lacy skips merrily through various local media, citing Borrell’s revised downward local forecast and newspaper troubles as evidence that local is not happening or in decline. She also indirectly refers to the chronic challenges of SMB ad sales as evidence that there’s no there there.
Here’s the reality, which BW either doesn’t fully “get” or seem to want to explore in sufficient depth:
- Local is about offline — money spent in physical places.
- E-commerce is <4% of retail; 95%+ percent of product purchases happen offline. Increasingly those purchases start online.
- 99%+ of service business transactions happen offline/locally (yet online is the place where more and more people go to find service businesses).
- People may communicate via Twitter, LinkedIn or Facebook to others around the globe but they live in physical places and when they travel they’re also in physical places, where they stay, eat, shop.
- SMB advertiser acquisition is hard, yes — no dispute there (see the last two years of blog posts)
- The central barrier to more geotargeted and local advertising by nationals has been the challenges of offline tracking in any given campaign
What about mobile? Except for gaming, mobile brings the relationship between the Internet and offline transactions into sharper relief. In fact, mobile is starting to reveal and teach people about the value of local online.
The angle should have been: there’s a big disconnect between online consumer behavior and advertiser understanding and/or ability to capitalize on that phenomenon.
There’s this bit too:
So if you’re an advertiser and want to reach a particular geographic region, good luck. You can target a group, whether it’s young singles, men between the ages of 35 and 50, or women climbing the corporate ladder—but increasingly, they’re scattered across the country, not lumped into one city vs. another.
Every single ad network offers layers of targeting based on location and audience segment. And geotargeting is only getting more precise (see Geode, Windows 7, Chome, etc.). In fact, as I’ve argued repeatedly in the past, the better local gets the more it becomes demographic targeting. Everything, including geo and demo targeting, is even more precise in mobile.
We’re in a recession; everything is down including local. And local is harder than other segments because of some of the factors mentioned above. SMBs are hard to sell to and they don’t spend lots online. But there are millions of SMBs online in various forms today.
As I’ve argued before, from consumer behavior perspective, local/offline is a much, much bigger deal than anything else going on online. It’s just often hard for people to see it.