National Brands Are Only Beginning to Understand What Local Businesses Already Know About the Social Network
Published: July 18, 2011
One of the greatest aspects of Facebook for marketers — maybe the greatest — is that consumers willingly share their information, opening the door to the precise targeting that advertisers dream of. Yet many brands still look at Facebook merely as a way to acquire fans, with little thought given to monetizing that list. Very few national or international brands take full advantage of Facebook’s targeting capabilities. At this point, between 60% and 70% of Facebook’s ad revenue comes from small businesses.
Such businesses are realizing the benefits of targeting consumers on a local level, similar to the way small businesses take advantage of radio, newspaper and billboard advertising to drive local sales. National brands shouldn’t feel excluded — they, too, can engage their audiences on a more intimate level by targeting locally. And unlike traditional display, Facebook gives advertisers national scale on a very local level. Unfortunately, many are leaving this opportunity untapped.
There are multiple uses for localized display on Facebook, including local events, new store openings, holiday offers and other local promotions. Consider a cellphone service provider’s marketing strategy. In addition to the centralized national marketing team, such companies often have local marketing groups responsible for particular regions. Agencies typically like to maintain a single point of communication, pushing the local groups out of the Facebook advertising strategy.
But think of the possibilities for customizing on a local level: New store openings, local promotions, even extended 4G coverage in the region are all valuable opportunities to engage consumers on the local level. It makes little sense to ignore the local angle.
Localized creative is effective at generating awareness and ultimately driving people into stores, building higher order value, and powering transactions. Think of it like the Sunday circular that runs in the newspaper every week. Instead of buying ads in the paper, brands can push weekly specials out to localized audiences, and do so far more efficiently with mass reach and frequency.
We recently ran a campaign to promote a celebrity in-store appearance for a cell phone provider. By targeting the youth market in that region with customized Facebook display ads, we achieved a 0.26% click-through rate, relatively high for any type of display. That high CTR foreshadowed massive attendance at the in-store event, completely surpassing expectations.
Groupon and Living Social are two other companies that know how to effectively leverage this local display strategy, and you’ve undoubtedly seen one or both companies advertise deals in your city in Facebook’s right-hand column. Both companies have national reach, but their business model operates on a local level, so proper targeting pays dividends in scale.
Starbucks is the most popular global brand on Facebook in terms of fans, but it can still use local strategy effectively to maximize reach and frequency in high-density markets. Every Starbucks offers the same products, but consumers often develop relationships with the brand through their neighborhood location. Starbucks often leverages this brand association via campaigns that give consumers coupons for free pastries with a drink purchase. The campaign is national in scope, but it applies the advertising weight at a localized level to maximize consumer appeal and revenues when they visit their favorite Starbucks store.
Nor is local limited to geographic targeting. Brands can target students at specific colleges and universities with unique back-to-school offers, introducing new residents to the local franchises. This is a popular strategy as brands compete for share of mind and wallet of students as they return to school this fall.
Brands traditionally disregard local online advertising because it seems time-consuming and difficult to scale. Localized websites draw small audiences, which offer very little ROI. Facebook, on the other hand, makes it easy to look at which percentage of the population will see your local message, and then build a national campaign customized and targeted on a local level at a reach and scale not previously attainable through traditional display or search advertising.
The local companies currently running campaigns on Facebook rely on the social network’s self-serve ad tool. That’s great for small companies trying to reach a few thousand consumers, but it breaks down for brands trying to reach tens of thousands of people in multiple locales. Doing that requires an entire team customizing and targeting the creative, and there’s just no way to make money that way. Facebook’s direct-sales team doesn’t offer local customization because of the time required.
Fortunately, companies with access to Facebook’s Ad API can automate the process, giving brands fully customized campaigns for individual locations on national (or even international) scale with customized targeting and creative at a fraction of the time and effort.
Marketing on a local level maximizes the impact of your marketing campaigns on Facebook by minimizing advertising waste and maximizing your reach and frequency with the right audiences, making the brand offering more appealing. Customizing an ad makes your brand message relevant to a consumer on a level where he or she can easily engage and take action. It combines the reach and targeting capabilities of Facebook in order to maximize brand awareness and drive consumers into an actual location to make a purchase — which is, after all, the purpose of marketing.
ABOUT THE AUTHOR
Dave Williams is the CEO of Blinq Media.