It is still unclear which next-generation business models will dominate in the local advertising revolution. The giant online portals are localizing significant parts of their experiences, search engines are trying to hyper-localize their results, wireless phone platforms are expanding local functionality and startups are introducing new business concepts.
Local search still has not been perfected, and the local business market still struggles with the issues surrounding the effective integration and application of emerging media in their overall marketing mix.
Until recently, local advertisers had few choices: Yellow Pages, newspaper, radio, television, etc. Now, there is a huge explosion of choices. In a way, the evolution of media has made it even more difficult for the consumer to know where to go for correct, reliable information about a business or product. Arguably, the most fundamental change has been the unstoppable shift towards performance media exemplified by the search marketing revolution. Advertisers pay only for involved consumers.
Let us look at this evolution of media. Whether or not they recognize it, most companies are using a multichannel approach to marketing today. We are seeing different media being employed in very unique, synergistically effective ways — essentially using a variety of media and different media types to reinforce the sale of a product to consumers. An advertiser that is putting a message in front of consumers wants to deliver this message across different media in parallel, so each instance of exposure is reinforcing the others. Coordinating and tracking all these channels and activities can be challenging — but in today’s markets, it is imperative.
Traditional media is incredibly powerful in a multichannel strategy. For example, Yellow Pages print. Regardless of where its eventual fate lies, it remains a dominant force. Local ad spend is just shy of $100 billion a year and most of the budget is still spent in the offline world. These traditional media continue to be powerful channels that provide consumer with a trusted source of reliable, relevant information.
Performance media convergence is the latest phase in this transformation. Everyone who uses Google AdWords realizes that Google constantly adds new products using the same AdWords account, such as syndication, radio ads, television, gadgets and networks. This is living proof that channel and advertising convergence is occurring, but is it performance based? Not really. You are still paying for impressions and not for actions and involved consumers. Why are we not able to pay for only the performance? Why is there not a way to consolidate all the channels and make it very simple for both the advertiser and consumer?
Search engine marketing, search engine optimization and Google AdWords are not necessarily easy tools to use. The key to local advertising and local performance convergence media is simplicity. The more options, the less likely the small to midsize advertiser will adopt it. Yellow Pages is very simple. SEM is not – and it reflects in the amount of non-specialists directly engaging each.
For the consumers it also needs to be simple too. The Internet Yellow Pages is not nearly as effective as its offline predecessor. Others, such as CitySearch and Judy’s Book, have tried to conquer this space, but none have created the consumer tool that will take local ad the next level.
The next generation of successful businesses will be those that provide both the consumer and the advertisers with simple, effective full-service advertising. This is most clearly defined as performance advertising across media and channels. The evolution of advertising is far from over. Most channels have yet to be converted to a performance basis and there is still much to improve on in the effective delivery of local information.
Paul Ryan is CEO and founder of Done Right. Reach him at [email protected]