ROI Important For National Brands At Local Ad Level

by Jack Loechner, Jun 5, 2012, 6:15 AM

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The Marketing team at Balihoo recently concluded a study of marketing professionals at over 270 national brand companies to better understand the role of local marketing and ROI metrics in their overall strategy. Among survey respondents, 66% of national brands are investing in local marketing, over 20% are spending 25+% of their budgets on local marketing, and 58% don't use ROI as a local marketing metric.

There was no clear consensus for how ROI varies between national marketing campaigns & local marketing campaigns. However, of companies that use ROI metrics, 24% expect national marketing campaigns to generate an ROI of 4:1 or higher, and 36% expect local marketing campaigns to generate an ROI of 4:1 of higher

ROI Expectation From National Marketing Campaigns (North America)
Return on Investment	% of Respondents
1.5-1	17%
2-1	17
2.5-1	12
3-1	17
3.5-1	11
4-1	9
4.5-1	2
≥ 5-1	14
Source: Balihoo Micro Study, May 2012

Related to the percent of companies investing in local marketing, larger national brands ($1 billion+ revenue) are 49% more likely to invest in local marketing than smaller national brands ($100-250 million revenue). Companies that use ROI metrics to measure national campaigns are 35% more likely to invest in local marketing than companies who do not use ROI as a marketing metric

Though the data from the Research Micro Study is available as a PDF file here, the report recommends the Emarketer analysis to gain a marketing viewpoint of the study:

Findings released in May from Balihoo, says eMarketer, showed the vast majority of national brands (88%) in North America were investing some portion of their budget in local marketing.

Brands were polarized in their levels of investment, with 29% allocated between 1-5% of their overall marketing budget to local initiatives, but 21% invested a quarter or more of their total budget on local campaigns.

Marketing Budget Allocated to Local Marketing (% of National Brands in North America)
% of Marketing Allocated	% of Respondents
None	12.0%
1-5	29.0
6-10	14.0
11-15	8.5
16-20	7.0
21-25	8.5
> 25	21
Source: Balihoo Micro Study, May 2012

Pete Gombert, CEO of Balihoo, told eMarketer that “... brands recognize that so much of the purchasing is still done at the local level, yet they aren’t focused on the local... “

25% of advertisers in North America reported an inability to track ROI at the local level. Though the majority was able to track their local efforts, 58% of national brands nonetheless neglected to calculate the ROI of their local programs.

ROI As Marketing Metric (National Brands in North America)
Ad Campaign	Use ROI	Don’t Use ROI
National	56%	44%
Local	42%	58%
Source: Balihoo Micro Study, May 2012

Though brands might allocate less to local advertising, reports eMarketer, 37% expected their local ROI to be higher than their national, and 44% expected similar ROI from both. Only 19% expected their national marketing to produce greater ROI than their local marketing. Of their national efforts, 63% expected their return to range anywhere from 1.5 to 3 times their initial investment.

As brands focus more intently on maintaining a local presence... ROI becomes more of a priority, concludes the report.

For additional information from Balihoo, please visit here; or to read the eMarketer article, go here.

 

 

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