The Business Of Hyperlocal Digital Advertising: Key Learnings From 2012

by: Dick OHare, on Dec 12, 2012 in Market Musings

2012 was a critical year for the hyperlocal digital advertising market.

Last month, Balihoo released a study highlighting some developing trends moving into 2013.  First, national brand marketers continue to look for ways to build their brands with local audiences and embed themselves more in communities close to their retail locations.  Among the top 3 digital tactics they will be adding in 2013 include: mobile marketing, local blog advertising and customer reviews.  They also plan on seizing more centralized control over marketing execution vs. relying on local affiliates for local marketing.  The theme: local digital marketing keeps growing in importance with big brands.

However, local (especially hyperlocal) digital marketing needs more innovation to bring greater efficiency and scale to the equation.  As Antony Young, CEO of Mindshare North America (a major digital advertising agency with clients like Unilever and Land Rover) stated in the August 14th issue of Ad Age

“There’s no doubt that local will be an increasing play for national marketers. It’s what brands need to do to engage consumers and grow. However, it is going to be more challenging for marketers to execute and more costly and complex to orchestrate. But the possibilities are exciting.”

Antony Young, CEO Mindshare North America, Ad Age 8/14/12

Delivering greater efficiency and scale to local digital marketing continues to be a great opportunity to great value in the digital media ecosystem.  Our mission at Local Yokel Media is all about bringing efficiency, scale and performance to hyperlocal digital advertising.

With this dynamic as a backdrop, here are a few things we learned in 2012…

1) Content matters.  In this rapidly changing digital media ecosystem, audience-based (eg., men 18-34 in the market for a car) ad targeting has grown in prominence with the creation of programmatic ad buying.  Targeting audiences through data has marginalized the value of publisher content.  However, the contextual relevance of the content a consumer consumes along with the ad message on that page continues to be a leading indicator of ad performance.  We find this to be especially true with a local ad message in local content addressing audiences in close proximity to the advertiser.  Our prediction for 2013 and beyond is that content will factor more prominently into this automated buying ecosystem, and more premium ad inventory will be represented in ad exchanges for targeting at more premium rates.

2) Executing digital ad campaigns is still too hard.  Digital advertising remains too complex.  Simply launching a digital ad campaign takes many steps from generating an insertion order to developing ad creative to trafficking an ad campaign to post campaign management.  There are many steps in the process.  However, there are great innovative solutions on the horizon like dynamic ad creation technologies (eg., Canned Banners) and more automated platforms for targeting hyperlocal audiences (eg., Local Yokel Media) that bring more efficiency to local ad campaign execution.  Innovations like these will continue to evolve bringing greater efficiency to media buyers.

3) Be transparent.  The internet is known for its “dark alleys”.  In other words, you don’t always know what you are buying as an advertiser.  For example, the downside to audience based ad targeting is you usually don’t know what publisher websites your ad will appear on or when.  These audiences are targeted through user cookies with data over laid (vs. publisher content) to represent an audience profile.  Marketers are demanding more transparency in their advertising buys to protect their brand value.  We predict greater transparency will prevail across the industry.

4) Get into the weeds of digital advertising.  As mentioned earlier, there is a lot of complexity in digital advertising.  We learned some valuable lessons this year that can only be learned by getting in the weeds.  A recent example of this is how ad servers operate and how ad impressions are counted.  See the specific blog post on this here.

We are in an exciting industry.  One full of opportunity and challenges.  Happy New Year to all the innovators and risk-takers in this industry who work hard every day to improve the challenges marketers face in getting the most out of their digital advertising efforts.



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