What’s the $55 billion elephant in the room? That would be the gross spend on co-op advertising annually in the US. For those unfamiliar, co-op dollars are typically funds earmarked by national brands for “market development” — local advertising or marketing campaigns on behalf of that brand (e.g. by local retailers, franchises, etc).

What makes this the all-but-ignored elephant?

• Only 13 percent goes to digital/online media
• Although co-op spending is already about $55 billion, about twice this amount is actually allocated for co-op advertising, but remains unspent (for a variety of reasons)

Google now has a major initiative to move this large budget into the digital era, and get a higher percentage of the allocation actually spent. This was the driving takeaway from a presentation by Jon Sofield, Google’s VP of Business Development, at this week’s Street Fight Summit West in San Francisco.

A key aspect of this initiative are partnerships with service providers, such as marketing automation and programmatic media purchasing. Google now has about 170 such partnerships, many of them focusing on 8 priority verticals. (For example, one of these is B2B high tech, where co-op digital ad spend is much higher than typical, at 50 percent of total co-op ad spend.)

This represents a shift in Google’s traditional framework for reaching the SMB market, which has been focused on partnering with local sales forces and (some) direct merchant relationships. But that was when the world was still focused on the conversion from print to online.

This is now: Most of the action is now is already digital. In fact, it’s moving quickly to mobile. Sofield pointed out that Google searches crossed over into “mobile dominance” about 5 weeks ago. We chronicled that shift as well.

The emphasis has also moved from simple online presence to message-driven conversions. That means an eye towards online content, formats, and marketing initiatives that drive action. Sofield underscores the need for experimentation — and patience — with this transition. Especially with the famously-late adopting SMB set.

The post What's the State of Co-Op Advertising in the Hyperlocal Era? appeared first on BIA/Kelsey - Local Media Watch.

What makes this the all-but-ignored elephant?

• Only 13 percent goes to digital/online media
• Although co-op spending is already about $55 billion, about twice this amount is actually allocated for co-op advertising, but remains unspent (for a variety of reasons)

Google now has a major initiative to move this large budget into the digital era, and get a higher percentage of the allocation actually spent. This was the driving takeaway from a presentation by Jon Sofield, Google’s VP of Business Development, at this week’s Street Fight Summit West in San Francisco.

A key aspect of this initiative are partnerships with service providers, such as marketing automation and programmatic media purchasing. Google now has about 170 such partnerships, many of them focusing on 8 priority verticals. (For example, one of these is B2B high tech, where co-op digital ad spend is much higher than typical, at 50 percent of total co-op ad spend.)

This represents a shift in Google’s traditional framework for reaching the SMB market, which has been focused on partnering with local sales forces and (some) direct merchant relationships. But that was when the world was still focused on the conversion from print to online.

This is now: Most of the action is now is already digital. In fact, it’s moving quickly to mobile. Sofield pointed out that Google searches crossed over into “mobile dominance” about 5 weeks ago. We chronicled that shift as well.

The emphasis has also moved from simple online presence to message-driven conversions. That means an eye towards online content, formats, and marketing initiatives that drive action. Sofield underscores the need for experimentation — and patience — with this transition. Especially with the famously-late adopting SMB set.

The post What’s the State of Co-Op Advertising in the Hyperlocal Era? appeared first on BIA/Kelsey - Local Media Watch.

Retail SMBs are more poised than their counterparts in other verticals to adopt sophisticated digital advertising and marketing. This is clearly shown by BIA/Kelsey’s Local Commerce Monitor ™ (Wave 18) survey of small businesses.

Retail SMBs are already highly oriented to digital media, with plans to spend 43 percent of their total ad budget on digital media in the next 12 months*. They rank social media marketing, SEM/SEO and email marketing as their top priorities for advertising and promotion in the next 12 months*.

There are multiple signals in the LCM data that we think point to big expansion into digital by Retail SMBs:

— They’re experienced in maintaining customer lists, with 71 percent having maintained a customer list for over a year. With 61 percent of their customer lists  in digital form, they’re well positioned to move into marketing automation services like CRM (where they’re still at a low utilization level of 21 percent).

— They’re big users of ecommerce, with 90 percent reporting ecommerce sales.

— They’re highly satisfied with the mobile advertising they’ve done so far, reporting high ROIs — although usage of mobile advertising and marketing is still modest.

— They’re big on customer loyalty programs, which are used by 43 percent of SMB retailers. Since only 30 percent of these programs have been digitized, we believe this too represents another growth opportunity.

— They’ve registered an interest in many advertising and marketing services, particularly ecommerce services, online satisfaction surveys, email marketing, and online leads management.

In sum, we believe local retailers will be upping their digital game on multiple fronts in the near term. Since they’re such a staple of their communities, this shift will reinforce the broad and rapid digitization of daily life.

*The 12 month period following the Local Commerce Monitor Wave 18 survey, conduced in Q3, 2014.

These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Retail vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

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But there’s still a gap: most SMBs’ email marketing tactics are fairly basic. They typically send the same promotions to everyone on their list. Or, if they segment the audience, it’s a very basic segmentation. This unrefined approach is sometimes called “batch and blast”, or “spray and pray.”

At a workshop at last week’s ad:tech San Francisco, several speakers discussed how email sophistication is evolving quickly. Although much of the discussion focused on brand advertisers, the lessons are just as useful to SMBs. This is especially true for SMBs using an agency or third party service provider.

Here are the top takeaways from the workshop:

— There’s a “unique customer journey” for each customer. Try to understand what that is: understand how each customer got to the website (or other online property). The journey will say a lot about that customer’s interests and motivations.

— The advertiser needs to speak to each customer individually, with a tailored message. This is especially true for the best customers, or power users.

— Typically, over 50 percent of the audience for a given marketing email is seeing it on a mobile device. This favors simple, bold visuals, short lead-ins, and buttons big enough for fingers (40 pixel diameter, minimum).

— Social media and email should be used together, in a complementary way. Advertisers should try to use one to leverage the other — which also means advertisers need to have the capability to associate a customer’s activity on social media with email they receive from the SMB.

The post Email Marketing for SMBs: No More "Batch and Blast" appeared first on BIA/Kelsey - Local Media Watch.

This was one of the first points in today’s workshop on Omnichannel advertising at ad:tech San Francisco, led by Sean Shoffstall, VP Innovation & Strategy, Teradata Interactive.

True omnichannel advertising, therefore, requires the advertiser to have an empirical understanding of the customer, and where he or she is exposed to a given campaign. And — wouldn’t you know it — this understanding requires a huge amount of data. Oh yes, and it helps if the data is real-time (or close to it).

Bottom line: Omnichannel advertising is the ultimate in CUSTOMER-focused analysis. It is NOT about media performance. It’s about customer experience. One can readily see how this requires many systems to tie together at the back-end, in order to assemble an accurate picture of the experience of the individual customer.  Very few brands or national advertisers, let alone SMBs are equipped to do this today.

And… to come full circle, this also explains why a company like Teradata is focusing on the digital advertising industry.

This is one of more and more examples of how Big Data will be leveraged by businesses of all sizes, including SMBs — usually through agencies or other intermediaries. (In fact, I’ll be moderating a panel at BIA/Kelsey SMB in September on this subject.)

Sidebar: Teradata Interactive started life as Ozone Online, a San Francisco digital ad agency that was purchased a year ago by Teradata. Teradata — the huge data storage hardware, data warehousing and analytics provider. So among other things, Teradata is now operating an innovative digital ad agency.

In fact, you can see the entire arc of the IT industry just in the history of the Teradata company. It started as the data division of NCR, the old “big iron” cash register and mainframe company. It was spun out of NCR in 2007 as a standalone data warehousing and analytics company. And with the acquisition of Ozone Online in 2014, it has become a Big Data online services provider. The whole evolutionary path of IT — in a single company.

The post Dispatch from the ad:tech Trenches: Defining ‘Omnichannel’ appeared first on BIA/Kelsey - Local Media Watch.

Omnichannel advertising is NOT the same thing as a bunch of point solutions across different media. Yet, it’s often mistaken as such. True omnichannel advertising consists of highly coordinated campaigns across multiple media and platforms, and is designed to deliver a consistent message and experience.

This was one of the first points in today’s workshop on Omnichannel advertising at ad:tech San Francisco, led by Sean Shoffstall, VP Innovation & Strategy, Teradata Interactive.

True omnichannel advertising, therefore, requires the advertiser to have an empirical understanding of the customer, and where he or she is exposed to a given campaign. And — wouldn’t you know it — this understanding requires a huge amount of data. Oh yes, and it helps if the data is real-time (or close to it).

Bottom line: Omnichannel advertising is the ultimate in CUSTOMER-focused analysis. It is NOT about media performance. It’s about customer experience. One can readily see how this requires many systems to tie together at the back-end, in order to assemble an accurate picture of the experience of the individual customer.  Very few brands or national advertisers, let alone SMBs are equipped to do this today.

And… to come full circle, this also explains why a company like Teradata is focusing on the digital advertising industry.

This is one of more and more examples of how Big Data will be leveraged by businesses of all sizes, including SMBs — usually through agencies or other intermediaries. (In fact, I’ll be moderating a panel at BIA/Kelsey SMB in September on this subject.)

Sidebar: Teradata Interactive started life as Ozone Online, a San Francisco digital ad agency that was purchased a year ago by Teradata. Teradata — the huge data storage hardware, data warehousing and analytics provider. So among other things, Teradata is now operating an innovative digital ad agency.

In fact, you can see the entire arc of the IT industry just in the history of the Teradata company. It started as the data division of NCR, the old “big iron” cash register and mainframe company. It was spun out of NCR in 2007 as a standalone data warehousing and analytics company. And with the acquisition of Ozone Online in 2014, it has become a Big Data online services provider. The whole evolutionary path of IT — in a single company.

The post Dispatch from the ad:tech Trenches: Defining 'Omnichannel' appeared first on BIA/Kelsey - Local Media Watch.

In an interview with BIA/Kelsey Managing Director Rick Ducey, John McIntyre, Founder & CEO, Sightly said: “Programmatic buying, in its most simple form, is the automated real-time bidding and purchasing of digital advertising inventory.”

During a programmatic advertising session here at ad:tech San Francisco, panelists gave their own definitions:

“Programmatic is an evolution of media automation”

“Programmatic means relevance: the right message in front of the right audience at the right time”

“Programmatic means control over ad placement, based on [your company’s] unique goals and customer information”

Going deeper, here are some of the key points made by panelists:

— Agencies are a bit behind the curve in moving to programmatic [not surprising, considering it often costs them media commission dollars]. But advertisers can start buying programmatically using a DSP [Demand Side Platform].

— Programmatic is a TOOL; it isn’t a solution. It requires a robust understanding of customer segments, customer interaction points with the business, and messaging — in fact, using programmatic advertising successfully requires an even deeper understanding of these things.

–Although “viewability” may be a key metric in evaluating programmatic advertising, it’s a necessary, but not sufficient condition for a successful impact on the consumer. It’s about action, not impressions.

— Programmatic will become a primary sales channel for ALL digital media — although this may take several years. Advertisers will be buying all their media (particularly digital media) this way: algorithmically, and real-time.

So — is there poetry in programmatic for the SMB advertiser? Yes — although as with other leading edge technologies, SMBs are a few years behind nationals and brands in adopting this tool set.

But it should be clear to companies that provide advertising and marketing services to SMBs that they’ll need to master programmatic advertising (and the robust data/analytic platform upon which it rests) on behalf of their SMB customers. Sooner rather than later.

The post Dispatch from the ad:tech Trenches: Defining ‘Programmatic’ appeared first on BIA/Kelsey - Local Media Watch.

What is “programmatic” advertising? It depends on whom you ask.

In an interview with BIA/Kelsey Managing Director Rick Ducey, John McIntyre, Founder & CEO, Sightly said: “Programmatic buying, in its most simple form, is the automated real-time bidding and purchasing of digital advertising inventory.”

During a programmatic advertising session here at ad:tech San Francisco, panelists gave their own definitions:

“Programmatic is an evolution of media automation”

“Programmatic means relevance: the right message in front of the right audience at the right time”

“Programmatic means control over ad placement, based on [your company’s] unique goals and customer information”

Going deeper, here are some of the key points made by panelists:

— Agencies are a bit behind the curve in moving to programmatic [not surprising, considering it often costs them media commission dollars]. But advertisers can start buying programmatically using a DSP [Demand Side Platform].

— Programmatic is a TOOL; it isn’t a solution. It requires a robust understanding of customer segments, customer interaction points with the business, and messaging — in fact, using programmatic advertising successfully requires an even deeper understanding of these things.

–Although “viewability” may be a key metric in evaluating programmatic advertising, it’s a necessary, but not sufficient condition for a successful impact on the consumer. It’s about action, not impressions.

— Programmatic will become a primary sales channel for ALL digital media — although this may take several years. Advertisers will be buying all their media (particularly digital media) this way: algorithmically, and real-time.

So — is there poetry in programmatic for the SMB advertiser? Yes — although as with other leading edge technologies, SMBs are a few years behind nationals and brands in adopting this tool set.

But it should be clear to companies that provide advertising and marketing services to SMBs that they’ll need to master programmatic advertising (and the robust data/analytic platform upon which it rests) on behalf of their SMB customers. Sooner rather than later.

The post Dispatch from the ad:tech Trenches: Defining 'Programmatic' appeared first on BIA/Kelsey - Local Media Watch.

SMBs in the entertainment vertical love video advertising. We’re talking movie theaters, event venues, catering, on-demand performers*, etc.. As is conducive to their craft, they’re big fans of online video, particularly website and YouTube videos. They’re also big on cable and broadcast TV.

This is according to BIA/Kelsey’s latest cut of SMB survey data (information below). On average, these Entertainment SMBs spend 12 percent of ad budget on video, much more than overall SMBs. When applied to their high ad spending, this notably produces an average annual video spend of $4,000.

This class of SMBs are also heavy users of social media of all types, and have a high interest level in advertising and marketing services. This is the wrap: Entertainment SMBs are good prospects for video and social media products. They use a lot, spend a lot, and they have their antennas out.

________

These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Entertainment vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

*SMBs in Entertainment is a roll-up category that includes: Restaurants, Bars, Hospitality (Catering/Hotel), Music, and Entertainment – miscellaneous.

The post Entertainment Value: SMBs Have it Too appeared first on BIA/Kelsey - Local Media Watch.

For investors, the big plusses are: strength of the brand; the large customer base of nearly 13 million (mostly SMBs); and robust growth in revenues and customers. Evidently, these outweighed the negatives of: lack of profitability; balance sheet challenges; and assorted bumps in the road over the last 10 years.

From a strategic perspective, the big challenge for GoDaddy (and other providers of registration and related products to low-end SMBs) is selling more and higher-priced products into a highly price-sensitive customer base. Moving customers along the value-vector into higher-priced, more robust products, while staying in a DIY/low cost pricing zone, is a challenging balancing act.

We think Go Daddy is well aware of the endgame, and knows it will take a lot more than Danica Patrick running NASCAR laps to get there.

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