National Brands Failing to Capitalize on Growth of Local Digital Advertising in 2012, Research from GMS Local Reveals

Study reveals gap in brands’ perceptions of local digital advertising activity compared to reality of implementation; calls attention to need for education and assessment of localized business strategies

ST. LOUIS – GMS Local, a service of GroupM and provider of local online services for national brands, announced research revealing a gap in the perceived local digital media activity expressed by national brands with brick and mortar locations versus what is actually being implemented. While 69 percent of marketers surveyed indicate they spend greater than the national average of 25 percent of budgets allocated to local marketing, 33 percent have yet to implement basic local digital efforts that positively impact business performance, such as online business directory listings. An exploration of the research is detailed in the white paper “Perception vs. Execution: Examination of Brands’ Local Business Strategies Reveals Gaps to Act On.”

As the Internet speeds to the forefront of local advertising, marketers are bullish about their current and future investments in local advertising – particularly in local digital media, the research revealed. Eighty-three percent of marketers surveyed expect their local online spending to increase at a greater rate than the projected national growth (25 percent) over the next three years. Such growth supports the expansive consumer activity happening in the local digital marketplace, where up to 20 percent of searches conducted have local intent (jumping to 40 percent on mobile devices), and the adoption of location-based check-in services is happening in the masses, with companies such as Foursquare topping 1 billion check-ins. According to Borrell Associates, local digital advertising is expected to grow 18 percent in 2012, with local online spend projected to surpass all other channels by 2015. This growth, compared to the gap in what marketing executives perceive their brands are doing at the local level and the reality of their execution over the past 12 months – and into 2012 – shows national advertisers are missing the opportunity for sizeable gains.

“Every single data point we see shows consumers becoming more mobile and reliant on digital for their local information. This rapid consumer shift has created challenges for brands as they attempt to keep up, and we are seeing a willingness to invest, as validated in this research,” said Chris Copeland, CEO, GroupM Search. “The research also shows a clear disconnect between what brands believe they are doing with those investments and what is actually being done. We speak to advertisers daily that have enormous blind spots in local digital coverage, and who welcome the education and strategy needed to resolve their willingness to spend and target which is hindered by the inability to determine what to do first and next.”

Additional insights from the research include:

– One of three national brands has yet to invest in the basic local digital effort of online business directory listings.

– Only 55 percent of national brands surveyed have initiated geo-modified paid search campaigns.

– While half of all consumers are making business selections off consumer ratings and reviews, less than 50 percent of national advertisers invest in local online review sites.

– Thirty-two percent of marketers attribute their insufficient engagement to a lack of awareness, with respondents specifically stating they are unaware of offerings, don’t understand them or believe them to be unnecessary.

– Fifty-eight percent indicate that funding prevents them from engaging more in the local digital space.

Brands will continue placing big bets on the online local space given the consumer shift to this space for their discovery efforts, with 70 percent of marketing executives for national brands reporting their local online investments as a percent of total local advertising outpace current national averages. As detailed in the whitepaper, national advertisers can overcome these challenges with deeper education around opportunity in the local digital space and self-assessment of the reality of their allocation and programs.

Additionally, following a three-step action plan will help advertisers reach optimal performance and local digital success:

– Conduct an online local listing business audit

– Diagnose the ‘local storefront’ for your brand by applying social media tools that listen to consumer sentiment at the local store level

– Practice education, innovation and experimentation

“Technology and mobility have opened the gateway for national brands to be able to create personalized experiences with consumers at the local level,” said Steve Scherfy, Local and Mobile Manager for GMS Local. “From business location listings to local social intelligence, managing the entire digital storefront is key.”

For the study, marketing executives and managers of national brands with a minimum of 500 physical locations were surveyed. The comparative study, conducted between September and November 2011, set forth to investigate the challenges that brands within the digital marketplace face, including the ability to understand emerging technology, analyze what is relevant and act on these tools based on their business needs. It also explored how engaged each national brand is with local marketing. Survey questions with local digital marketing averages and best practices from national data were utilized to gain reaction and comparative “self-assessments” against those averages by participating respondents and brands.

About GMS Local

GMS Local is a service of GroupM, and comprehensive digital solution focused on creating meaningful connections between brands and consumers at the local level. Using paid, earned and owned media solutions, GMS Local maximizes local consumer engagement opportunities for national advertisers with an extensive local footprint. Local digital marketing perspective can be found at, or on the GMS Local blog.