Is The Space For Local Digital Marketing Services Expanding — Or Consolidating?
Local brands "want consolidation and efficiency -- not more tools or platforms to master," says The LSA's Greg Sterling. "On the other hand, it’s very clear that consumer demand for high-quality local information is present and growing."
Over the past few years, a rush of digital marketing services platforms have followed the lead of Facebook, Google, and others racing for what was once a largely untapped pool of ad spending by regional brands, major franchise operators, and SMBs.
Even the past first four months of this year has seen a deeper concentration of “hyperlocal” services being aimed at smaller spenders and multi-location enterprises. The issues behind the current activity in the space will get a full treatment at The Local Search Association’s LSA18 conference (April 30-May 2) in Chicago. We reached out to Greg Sterling, VP Strategy & Insights at TheLSA, for the overview of the presentations and discussions.
GeoMarketing: In the weeks leading up to LSA18, Waze and Foursquare have introduced more local, SMB-centered offerings. Do those two respective moves say anything about the demand on the local level from SMBs and multi-location enterprises?
Greg Sterling: Many of these new offerings are not so much driven by marketer or advertiser demand as by competition and a recognition of opportunity by the platforms and tech providers. Waze Local is one example; it’s unlikely that anyone was asking for that specifically. But Waze saw an opportunity to create a simple self-service ad product for local businesses. Of course the company also needs to generate revenue. Now that the product exists, both small businesses and enterprise marketers will use it.
There are too many channels for marketers already; they’re not seeking new ones. They want consolidation and efficiency not more tools or platforms to master. On the other hand, it’s very clear that consumer demand for high-quality local information is present and growing.
Voice activated assistants and their role in local discovery are number of themes being explored at LSA18. What’s your sense of brands’ view of the rise of voice? Is this a period of experimentation, or is the local space quickly moving beyond that as chains make alliances with Amazon Alexa and Google Assistant?
Activity and development is uneven. Some brands and publishers are doing interesting experiments. Some are building “skills.” And some retailers are aligning themselves with Google and trying to utilize Google Home and Google Express as a new e-commerce channel. To that end we may find over time that smart speakers and virtual assistants are a strong transactional channel for loyal customers (e.g., re-ordering products, restaurant reservations, hotel bookings).
Despite the fact that there are more than 30,000 Alexa skills it’s still the case that most brands aren’t doing much specifically directed toward smart speaker devices. Many brands are still in a “wait and see” mode. Indeed, consumer behavior on these devices is still fairly immature and will continue to evolve as capabilities evolve.
It’s also important to distinguish between smart speakers, mostly without screens, and voice assistants on smartphones. In the latter case (e.g., Google Assistant) there’s a lot of effort going into trying to optimize for voice search. Considerable energy is being expended, for example, in trying show up as the featured snippet on Google for relevant search queries. That also yields benefits for smart speaker content discovery as well.
I think over time we’re going to see more and better content, commerce and local discovery capabilities. Voice as a UI has inherent advantages over typing.
Looking at the state of co-op, what are the points of friction that continue to exist in these national-to-local budgeting programs?
This is a hard one to answer succinctly. The short version is that most co-op programs remain overly bureaucratic, still with an emphasis on traditional media vs. digital. It’s also the case that many sales reps are ambivalent about these programs or they don’t feel confident pitching them. There are typically lots of rules and lots of compliance hoops to jump through. But if the stars align and the dollars are utilized it can mean access to new channels or increased spend and more effective campaigns.
There are many companies, including Netsertive, BrandMuscle, LSA and others, working to try and take the friction out of the process. But there’s still a reasonable way to go.
The nature of “conversations” that brands and consumers have is another area being explored by LSA18. Is the expansion of social media at the center of these changes? Is the nature of news coverage — whether it’s a national issue involving policing and race, as in the current Starbucks case, or the latest controversy over a local store owner or restaurateur blasting a Yelp ad — altering the way conversations are starting and ending?
As you know, social media can be a minefield for brands in this political climate. But brands and local businesses have no choice but to participate and engage their customers on social channels.
What we know from the data is that “local conversations” — social media posts and content relevant to local communities — is much more effective than top-down, generic corporate content. The challenge here is that having “authentic” conversations that are relevant to local communities at any kind of scale (e.g., across hundreds of stores) is tough from an operational standpoint. Brands are concerned about controlling their image and messaging but they can’t possibility address local communities without delegating some of that responsibility to local managers and personnel on the ground. This is one of the things we’re exploring from a tactical perspective at the conference.
I’m also very much looking forward to a related presentation on crisis communications and planning for brand snafus, which are inevitable. Right now, brands are screwing up left and right and social media is really amplifying those screw-ups, as the Starbucks example illustrates.
I’m also excited for this year’s event because we have the most diverse set of topics and attendees — brands, agencies, technology companies and media publishers — I think we’ve ever had. It reflects how the local segment is evolving and expanding. We’ve got forward looking, strategic “future of . . .” discussions mixed with very practical “how-to” tactical content. There’s a little something for everyone.