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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How is Facebook reinforcing its position in local? What are the business opportunities still left to come in the Local on-Demand Economy (LODE)? And what were the best things we saw at ad:tech? These are a few topics we tackled over the last week, aggregated into the Local Media Watch newsletter.

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Click below for the latest issue and subscribe (free) to get it in your inbox during its regular Thursday circulation.

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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.

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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.

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Not only are SMBs in the Professional Services vertical heavy users of Social Media for advertising and promotion, they are highly engaged on social media, according to LCM. 3/4 reported that they track “likes” in social media, while 57.4% monitor customer comments online.

There is a big opportunity with this group to offer CRM solutions because Professional Services SMBs stay connected with their customers but only 20% say they use a CRM system. 88.0% have maintained a customer list for a year or more, while an additional 6.4% have maintained a customer list for less than a year.

The full report can be viewed and downloaded by clients of BIA/Kelsey here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor? survey. In the coming weeks we will be looking at SMBs by additional vertical categories. Our Home and Trade Services SMB report is already available. To learn more about our LCM survey of small and medium-sized businesses, click here.

Click here to purchase the Professional Services SMBs — LCM Wave 18. To purchase any of our other Local Commerce Monitor drill-down reports, check out our new BIA/Kelsey Shop.

*Professional Services vertical includes consulting, legal, architecture, and computer software. Financial Services SMBs are not included, but will be profiled in their own vertical report.

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Social Media’s place in the local marketing pantheon continues to be cemented in our SMB survey data.  More evidence came with Facebook’s announced 40 million SMB active Pages (2 million of those advertise). Twitter, Vine, Instagram and Meerkat are also localizing in different ways.

But what about Snapchat? It’s the fastest growing social media among Millennials — a behavior worth watching if you consider the generation’s influence and buying empowerment as it cycles into the ranks of the adult consumer population. But is there a local play?

This started to be answered when it localized the OurStories format — curated collections of snaps around a specific topic or theme. Local OurStories means that these themes can now have geo-specific relevance, such as a college campus, sports team, or event.

The latter has been the killer app for OurStories so far. This started with EDC and more recently caught fire at Coachella. These event-based OurStories not only have heavy engagement but lots of advertiser-friendly attributes, in being curated, Millennial-rich and massive (up to 25 million views).

Sponsored OurStories so far include Samsung and Heineken, making them much more oriented towards national brands than SMBs. Interestingly, this makes Snapchat’s competition for ad revenues less about social apps and more about another reach-based local media: television.

But the differentiating factor for OurStories could be the explicit location context. Consider the location targeting challenges that others face, such as mobile ad networks that defer to inaccurate or inferred location. We discussed this challenge recently with ThinkNear and xAd.

OurStories get users to make their location known as a natural part of the social-sharing process. This makes it a sort of location check-in a la Swarm, but with much deeper and more sustained engagement. The question is how Snapchat bottles that as a promotional vehicle.

So far that’s been all about big events, but could it apply to smaller pockets of localized promotions that have greater frequency? That would mean any business where location and temporal relevance matter. Think: flash sales, happy hours and any “perishable inventory.”

Most of all, Snapchat’s signature ephemerality is aligned with time-sensitive promotions, making it a “native” integration. It could join the list of social sharing tools that monetize the locality of the user experience. First for brands then potentially — as shown by Facebook and Instagram — for SMBs.

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According to BIA/Kelsey’s Local Commerce Monitor, Wave 18?, 72.2% of the SMBs (small- to medium-sized businesses) surveyed* use Social Media to promote their business. Of the different social media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, Facebook Page ranked the highest, followed by LinkedIn and Twitter. Facebook ads were close behind in fourth place. Instagram and Pinterest, which didn’t make the chart below, are achieving traction — each has close to a 10% reach.

Social media can provide SMBs with an immediate and interactive connection with their customers. So how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on social media? In our survey we asked several questions on the satisfaction of the various advertising and marketing choices made. It should be noted that only SMBs who reported using a particular media were asked for their ROI assessment of that media.

While only 15.2% of SMBs surveyed reported using Facebook ads to advertise and promote their business, they gave it the highest combined ROI of Excellent (10-19x spend) and Extraordinary (more than 20x spend) of the social media in the survey, at 37.3%. Instagram and Other Social, which 8.1% and 5.4% of SMBs surveyed, respectively, reported using for advertising and promotion, tied for the next highest combined ROI at 30.6%, followed closely by Twitter ads at 30.5%. Instagram and Twitter ads both had more respondents rating them Extraordinary than Other Social. LinkedIn, which was second among SMB users, was ranked lowest of the social media, with combined perceived ROI (Excellent and Extraordinary) of 18.6%.

SMBs in our survey on average spent 21.4%, or $7,638, of their annual advertising and promotion budget on Social Media players, such as Facebook and Twitter.

Local Commerce Monitor? (LCM) is BIA/Kelsey’s ongoing survey of the advertising behaviors of small and medium-sized businesses (SMBs). To learn more about our LCM survey, click here.

*From the Full Sample.

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Earlier this month we examined SMBs that prefer a “Do it Yourself” model, but that’s only half the story. SMBs that told us they prefer a “Do It With Me” or “Do It For Me” model for their advertising and marketing services are larger (nearly two times the size of DIYers), more urban and spend more annually on advertising, as the infographic above shows. The majority are actively growing and expanding their businesses and the second largest sub group report that they are “maintaining share.” According to Stacey Sedbrook, our Vice President of Strategic Sales Consulting, there are no true DIWM/DIY models in the marketplace; to a large degree they are marketing terms to describe the amount of time, budget or sophistication of the SMB. Companies that go to market with DIY/DIWM products and services are in a win-win situation, as it allows them to meet business needs based on time, budget and/or sophistication of the client. Managed advertising services both traditional and digital are explored including commentary by Stacey Sedbrook, on the principles and best practices for implementing DIWM or DIFM models.

The full report can be viewed and downloaded by clients of BIA/Kelsey here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor™ survey. Our LCM reports look at where particular SMBs (broken out by size, vertical, etc.) spend the most, as well as the top channels for marketing and advertising. Additionally it provides analysis on the best product and service offers for these highly coveted groups of SMBs. In the coming weeks we will be looking at SMBs by vertical category. To learn more about our LCM survey, click here.

Click here to purchase the SMBs That Prefer “Do It With Me” (DIWM) or “Do It For Me” (DIFM) — LCM Wave 18. To purchase any of our other Local Commerce Monitor drill-down reports, check out our new BIA/Kelsey Shop.

The post Do It For/With Me SMBs Spend More Than DIYers appeared first on BIA/Kelsey - Local Media Watch.

This report is a view of SMBs that told us they prefer a “Do It Yourself” (or “Do It Myself”) model for their advertising and marketing services. This is in contrast to the higher-service level models of “Do It With Me” or “Do It For Me.” (The preference for service models is one of the questions we asked in Wave 18 of our Local Commerce Monitor survey of small-and-medium businesses).

The advertising and marketing services could include, for example: website creation, marketing automation, leads management, media performance analysis, CRM, listings management, etc.

Many of our clients are asking us for information on SMBs that use DIY products. DIY products are popular for several reasons, low-cost being foremost. Publishers, media companies and other service providers find many challenges to implementing a DIY model, however. These run the gamut, from a lack of follow-through by the SMB customers, to frustrations in trying to upsell SMBs to additional products.

In profiling SMBs that prefer the DIY model, we found several surprises. For example, these SMBs are often well-established businesses, in the “maintenance” lifecycle stage. They tend to be moderate-sized SMBs (not the very smallest), and spend more than $13,000 annually on advertising. They’re very oriented to digital media in general, and social media in particular.

This report also includes commentary by Stacey Sedbrook, our Vice President of Strategic Sales Consulting, on the principles and best practices for implementing a DIY model.

The full report can be viewed and downloaded by clients of BIA/Kelsey here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor™ survey. Our LCM reports look at where particular SMBs (broken out by size, vertical, etc.) spend the most, as well as the top channels for marketing and advertising. Additionally it provides analysis on the best product and service offers for these highly coveted groups of SMBs. In the coming weeks and months we will be looking at SMBs who prefer “Do It With Me” and “Do It For Me” service models, and SMBs by vertical. To learn more about our LCM survey, click here.

To purchase any of our Local Commerce Monitor drill-down reports, check out our new BIA/Kelsey Shop.

*Actually, I stood up — at the “standing desk” I recently cobbled together. Not just any standing desk — but one where I’m standing on a Bosu ball while at my computer. Try it!

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To kick-off BIA/Kelsey NATIONAL, the analyst team sits down to review 2015 – 2019 local advertising across 12 different channels and 94 industries, summarizing key issues for marketers over the next half decade.

Michael Boland, Chief Analyst and Vice President of Content, BIA/Kelsey
Peter Krasilovsky, Vice President, BIA/Kelsey
Steve Marshall, Research Director, BIA/Kelsey
Stacey Sedbrook, Vice President of Strategic Sales Consulting

Steve Marshall opens with our Local Commerce Monitor results on franchisees. They send $87K-plus, the highest level of marketing spend among the SMBs BIA/Kelsey tracks. They are highly engaged in digital — 42.9 percent of 2015 spending will be on digital; again, far ahead of the average SMB.

Franchises also spend at least 10 hours a week on social networks. About 85 percent maintain customer lists (compared to only about half of SMBs have customer lists in digital form). Seventy-one percent of franchises will have a loyalty program this year. This is a vindication of loyalty programs. Hand in hand with these loyalty programs, franchises are driving huge investments in discounting — 50.7 percent of revenue will be due to discount sales tied to loyalty programs.

This is the wave — loyalty and discounting — that will sweep the local space. There will be a much deeper, more committed relationship between the franchises and customers.

Franchises tend to favor buying through on-premise sales reps (feet on the street), even though many have national agency relationships. The franchises buy most through agencies and are extremely satisfied. Sixty-three percent are extremely satisfied with their agency relationships, though they prefer making individual purchases with assistance (expertise) from the agency. “They like a partner for these activities versus doing it themselves.”

Co-op advertising represents about $50 billion in U.S. spend annually and franchisees are the most prevalent users of co-op (more than 50 percent of all co-op monies flow through franchises). As a result, they want more analytics and analysis for their planning and assessment of campaigns.

Next up, Mike Boland discusses technology, particularly mobile.

Mobile ad revenues will grow from $13.25 billion in 2014 to $41.63 percent in 2019. In mobile, brands are the majority early adopters. YP, Yelp and other directories participate, but more than half is brand spending.

There are many flavors of ad targeting in mobile. It is no longer a matter of simply being geo-targeted, but must include contextually relevant information on the mobile devices. Using local area codes perform better than 800# listings, because they are perceived as actually local.

Bringing local inventory to bear on these opportunities, bringing POS inventory online as Google is doing, will be critical to market growth.

The static display ad is dying as live targeting takes on the role of providing context to mobile users.

Location-based programmatic ads are making headway. Weather, for example, can be used to address a customer with a topical offer. For example, a gym can send a coupon to a runner when it is raining: “Come in and run out of the rain.” These ads are starting to perform well.

Competitive conquesting works in retail, but struggles in restaurants. “There are so many different shades to these new opportunities, and it requires a lot of testing,” Boland said. Think of location as an audience profiling tool — where are consumers going and what does it say about the consumer that brands can use to create resonant messaging for consumers.

Contextual location targeting, such as a consumer at Wrigley Field, is a rich starting point for engagement. Drawing in other activities around that location and demographics.

“Everything I just mentioned can only happen when the location is accurate,” Boland concluded. “But the dirty little secret is that many location tags are wrong.” That’s a critical area for the market development and we have a session about this later this week.

Now Stacey Sedbrook: Are companies really learning use national and local brand targeting. Brand is centric, the location is subservient to the brand. And it is all over the board (for the same reasons that Gregg Stewart identified earlier). Talent development is going to be essential.

Stacey suggests it is important to “super-serve” the brand behind franchises, so we still need to be near the national brands, such as locating near Detroit for auto. The relationships matter more, and sales will continue to thrive.

Programmatic ads do not replace the human relationships that media companies have built with brands. Steve Marshall adds that he sees a tremendous need for integrators who do consultative selling with brands. Stacey: Make the local franchise group happy. So, send out a “hunter” to bring in brand deals, but hand fulfillment and account management to the local staff. Relationships matter.

Programmatic feels like “a buying method” to talk about targeting demographic, location with the “humble display ad.” Mike Boland: “This is bringing the tenants of search to the local display ads.”

That’s the session.

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The most popular channels used for advertising by established businesses are a mix of social, digital and traditional: Facebook page, website, email marketing, LinkedIn and direct mail. Even their future plans for advertising shows a mix of digital and traditional. Search, email and print advertising are the top three future channels.

Established SMBs had an average annual spend of $23,331 on advertising and promotion, compared to $17,360 for newly established SMBs. 55.5% of established SMBs plan to maintain their currently level of spending in 2015, while 31% plan to increase their spending.

Established SMBs are heavy users of social with 70% of established business respondents said they track “likes” on social media. 61% monitor customer comments about their business. 71% of them use a free or do-it-yourself service to do so.

Clients of the BIA/Kelsey Advisory Services can find the full established SMBs spotlight report here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor™ survey of small-and-medium businesses. Our LCM reports look at where particular SMBs (broken out by size, vertical, etc.) spend the most, as well as the top channels for marketing and advertising. Additionally it provides analysis on the best product and service offers for these highly coveted groups of SMBs. In the coming weeks and months we will be looking at SMBs who prefer the DIY online advertising models, those that prefer DIWM or DIFM models, and SMBs by vertical. To learn more about our LCM survey, click here.

2015 Spend Intentions for Established SMBs

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