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Do you want to know what type of local marketing will help you effectively grow your business and make you more money? This local marketing report can help you understand marketing in the local community today.

Why do you care about marketing? It’s very simple. If you make your living selling products or services locally, then you need customers. To get more customers to purchase your products and services you need to be marketing.

To effectively and affordably market yourself and your business in our world today you need to know the facts. This local marketing report is intended to give you some insight into current local marketing statistics, how much local marketing platforms cost today to use, what consumers are responding to and what local marketing strategies are likely to work in 2016 and beyond.

While it’s impossible to predict the future, with the amount of current research data available we can make some educated guesses on what consumers will likely respond to and how local marketers should consider communicating with potential customers.

Most importantly, research indicates that those people and businesses that use this type of information to create and use in a “business plan” are much more likely to succeed.


2016 Local Marketing Report Summary

For many people and businesses selling product and services locally, incorporating a formal marketing program into their operation isn’t something they consider necessary.  Nothing could be farther from the truth.

If you sell products or services locally, having a plan to effectively connect and communicate with potential customers can dramatically increase the probability that you will grow your business and make more money. In fact people and businesses who don’t find a way to communicate effectively with potential customers run the risk of not only becoming irrelevant in the short term, but going out of business in long term.

It’s no secret that the local marketing environment has significantly changed over the years. Many people and businesses selling products and services locally haven’t kept pace with this change. While it’s no longer considered a novel idea for a company to have a blog, send emails, post product pictures online or use social media; most people and business selling products and services locally aren’t using the Internet to effectively market themselves.

What this report shows is this; consumers are in control of the marketplace. Consumers are watching less traditional television, listening to less traditional radio and reading fewer newspapers and magazines. More importantly, consumers are paying less and less attention to local advertising in general. This makes marketing more difficult. To effectively communicate with potential customers today, you need to know who your customers are and know specifically how you can reach them.



The Biggest Problem for Local Businesses                                              

Why Small Businesses Fail                                                                         

 Small Business Failure Rate                                                                        

 Having a Business Plan Doubles Your Chance of Success                                            

 The Cost of Marketing                                                                                 

The Effectiveness of Marketing Platforms Today                                      

Consumer Trust Matters                                                                                                          

Consumer Trust in Advertising Formats                                                   

The Problem for Small Businesses                                                                 

Marketing Platform Effectiveness Per $1 Spent                                          

Advertising Response Rate                                                                             

 Cost Analysis of Actual Results                                                                      

What Advertising Forms do Consumers Take Action On?                      

 How Much Should You Spend on Marketing?                                               

 What Marketing Platforms Work Best for Small Local Businesses?       

 Why does Online Marketing Work Best for Small Local Businesses?    

 The Effectiveness of Internet Marketing                                                

 Why Don’t Consumers Pay Attention to Local Advertising?                 

 How Should Small Local Businesses be Marketing Themselves in 2016 and Beyond?

 What Local Marketing Strategies are Likely to Work in 2016 and Beyond?



The Biggest Problem for Local Businesses

If you worry about your ability to continuously generate revenue, you’re not alone.

A 2015 Wells Fargo survey of business owners said their biggest concern was attracting customers and finding new business.

A recent survey by concluded that the biggest challenge facing small business owners is generating revenue.

This graph from Constant Contact indicates that the majority of small businesses surveyed are concerned about their ability to continuously attract new customers.



Source: Constant Contact


These statistics aren’t surprising. For anyone who sells products and/or services for a living, continuously generating revenue by finding and attracting new customers should be a priority. For any business it’s the customers that create the revenue that ultimately pays the bills and creates profitability.

If you are selling or want to sell products or services in your local community then you probably already know this; to be successful you need customers.


Why Small Businesses Fail

 There isn’t any one particular reason that so many small businesses ultimately fail. In fact there are so many different variables and individual circumstances that can lead to business failure that it isn’t feasible to identify a single thing or even a specific series of things that always lead to business failure.


Many of the organizations publish articles that list the reasons small businesses fail, including the Small Business Association (SBA), New York Times, and Forbes. Many of these articles claim that failure to effectively communicate with potential customers is one of the biggest reasons businesses fail.


This makes perfect sense when you recognize that there is one thing that all financially successful small businesses do have in common – they have customers. To have customers they must have a communications process that engages potential customers.

Since marketing is by definition “a communication process designed to positively influence the purchasing decisions of potential customers”, if you don’t have an effective way to communicate your message to potential customers, you’re not effectively marketing. If you aren’t effectively marketing yourself or your business, it becomes unlikely that you will ultimately have enough customers to be financially successful.

To attract and retain customers, you need to understand the value of marketing. People today are unlikely to simply walk into your business and buy something from you if they don’t know who you are, what you are selling or why they should buy from you instead of the competition.

It’s probably not a coincidence that 75% of small businesses don’t survive and a survey by marketing icon Danielle Macinnis concluded that 74% of small businesses don’t have any kind of marketing plan. Having a marketing plan that effectively outlines how you are going to communicate with potential new customers must be an essential part of any business plan.

What this indicates is that people and businesses don’t fail, they fail to plan. { 3 }


Small Business Failure Rate

According to the Small Business Administration (SBA), the small business failure rate in the United States remains relatively constant year after year. About two thirds of all businesses survive at least 2 years, one half survive 5 years. Only about 25% of all small businesses survive past their 15th birthday.


Local Marketing Report - Small Business Survival Rate

Having a Business Plan Doubles Your Chance of Success

 While it’s easy dismiss the importance of having a written business plan, a survey conducted by Palo Alto Software of thousands of businesses showed that those who completed business plans were nearly twice as likely to successfully grow their businesses or obtain capital as those who didn’t have a written plan.


marketing plan importance - no marketing plan vs marketing plan



This following is a breakdown of the survey:

2,877 people completed the survey. Of those, 995 had completed a plan.

  • 297 of them (36%) secured a loan
  • 280 of them (36%) secured investment capital
  • 499 of them (64%) had grown their business

1,556 of the 2,877 had not yet completed their plan.

  • 222 of them (18%) secured a loan
  • 219 of them (18%) secured investment capital
  • 501 of them (43%) had grown their business


The University of Oregon’s Department of Economics evaluated the data. They concluded that “writing a business plan correlated with increased success in every one of the business goals included in the study.”

They went on to say;

“Except in a small number of cases, business planning appeared to be positively correlated with business success as measured by our variables. While our analysis cannot say that completing a business plan will lead to success, it does indicate that the type of entrepreneur who completes a business plan is also more likely to run a successful business.”

Here’s what the above studies mean:

You’re better off WITH a business plan than without one. In fact, based on the surveys, you are at least twice as likely to grow your business and achieve your goals if you have taken the time to write a business plan that includes a marketing plan.


The Cost of Marketing

We can talk about the cost of marketing in many different ways. The reality is there is only one real marketing cost we care about. It’s the specific financial cost to acquire a new customer. This is the only true way to measure your return on investment. It doesn’t matter how many clicks or eyeballs a marketing campaign receives, if it’s not generating revenue, it’s not successful.

Marketing by definition is a process that facilitates valuable communication between providers and consumers. Generally the cost of using specific communication platforms is measured by CPM (cost per thousand). A CPM represents the specific cost for a specific message (advertisement) to potentially reach 1000 people using a specific platform. Advertising platforms that generally charge their customers on a CPM basis include; television, newspapers, magazines, radio and the online banner advertisers.

This is a very important point;

The cost per thousand (CPM) that you will be charged is not for the number of people that actually see or hear your advertisement; it’s for the number of people that potentially will see or hear your advertisement.

While online advertising clearly offers the lowest CPM (cost to reach an audience of 1000 people), the more traditional advertising platforms like newspapers and television are far from dead. There isn’t a shortage of ads in the local newspaper or on television during prime time.

Local Marketing Report - Marketing Plan Cost Comparison


Source: Peter J Solomon Company

Note: Direct mail is not included in the chart. A very conservative estimate of the cost per thousand (CPM) of a direct mail marketing campaign according to the Direct Marketing Association is $170.

While online advertising clearly offers the lowest CPM (cost to reach an audience of 1000 people), the more traditional advertising platforms like newspapers and television and direct mail are far from dead. There isn’t a shortage of ads in the local newspaper or on television during primetime.

Return on Investment (ROI) is What Counts

What should matter most to you when considering the cost of marketing and advertising is the return on your investment. In other words you need to ask yourself this question. Does the number of new customers you are likely to acquire by using a specific advertising platform going to justify the expense? To answer that question you need to know how effective a specific marketing strategy is likely to be.


The Effectiveness of Marketing Platforms Today

There is a reason people pay the much higher costs of using television and print as marketing platforms. They still have relevance for consumers. As a recent survey by Twist Image indicates, these advertising platforms are still effective in positively influencing the purchasing decisions of the people they reach.

Local Marketing Report

Source: Twist Image 


Consumer Trust Matters

One of the reasons advertising on these platforms is still effective is not only because it is possible to reach specific target markets using these platforms, but consumers have more trust in the adverting that appears on these platforms as opposed to other platforms. Consumers trust directly influences purchasing decisions.

Consumer Trust in Advertising Formats

The chart below from Nielson clearly indicates that word-of-mouth is still the most powerful and trusted source of referrals and recommendations. What the data also shows is that the Internet has become a powerful tool used and trusted by consumers to share and view personal referrals and recommendations on branded websites, review sites and social networks.

What the chart also shows is that the most trusted advertisements appear on television, magazines and newspapers.

Local Marketing Report

The Problem for Small Businesses

While the data indicates that consumers generally trust advertising that appears on television, magazines and newspapers; the cost of running the number of advertisements required to effectively generate a return on investment is often too high for most small businesses.

Marketing Platform Effectiveness Per $1 Spent

The reality is that marketing effectiveness is very difficult to measure in our society today. As mentioned previously, the cost of marketing is generally based on the potential it has to reach consumers, not the actual influence it has. By combining the cost data with the potential effectiveness data we can estimate the number of people that may be positively influenced using a particular marketing platform. The result is an estimate of the number of people that may actually be influenced per dollar spent.

Local Marketing Report 2015

Source: Twist Image, Click First Services


Advertising Response Rate

The actual advertising response rate for most media platforms is very difficult to measure because there are so many variables. Generally, an adverting campaign that generates a response rate of 1 – 3 % is considered about average.

The Direct Marketing Associations 2015 response rate report states that direct mail response rates outperform all other digital marketing channels by a large margin. Direct mail achieves a 3.7% response rate with an in house mailing list, and a 1.0% response rate when using a prospect list.

All other digital marketing channels combined only achieve a 0.62% response rate. All other digital marketing channels includes; mobile 0.2%; email with an in house list or a prospect list 0.1%; social media 0.1%; paid search 0.1%; display advertising 0.02%.

Cost Analysis of Actual Results

To better understand and compare marketing platform effectiveness in the local marketplace today we can look at a real world example.

In this example we will use a local restaurant in Florida using business listing management techniques and a landing page to increase local online visibility. The screen shot of the Google Insights page for this restaurant shows that information about this restaurant was displayed on Google a total of 25,016 times in the past 30 days. On search results pages 9,850 times and pictures were viewed 15,166 times.

Local Marketing Report - Search Results



In addition it shows that some form of action was taken a total of 711 times. Two hundred eighty three times people clicked on a link to the website, 226 asked for driving directions and 202 for the phone number. (It’s important to recognize that this response rate is only on Google. Google Insights does not track results of users on specific business directories or other search engines. )

In this example that’s a response rate of about 2.8%.  711 / 25,016 = .028

The cost for this restaurant to generate the online visibility that enable them to get 711 people to take action was $75. While we don’t know how many of those individuals actually bought something from the restaurant, for the sake of discussion we will make the assumption that they all did. That would make the restaurants Cost of Acquisition for each of these customers $.10. (75 / 711 = .10)

In comparison, (assuming that the response rate is identical on all platforms) to reach 25,016 people using television ads at an average prime time cost of $33.85 per thousand (CPM) it would cost the restaurant $846 to reach the same number of people.

Using the same formula we can estimate the cost of using other media platforms to reach 25,016 people:

Newspaper: $ 812

Radio: $ 337

Direct Mail: $ 2500


What Advertising Forms do Consumers Take Action On? 

According to a Neilson survey of 30,000 consumers in 60 countries, the top formats in terms of action taken as a result of hearing or seeing a recommendation or advertisement are very similar and consistent with the trust in advertising rankings:

  • Recommendations from people (83% always or sometimes taking action);
  • Branded websites (70%);
  • TV ads (69%);
  • Consumer opinions posted online (69%); and
  • Newspaper ads, opt-in emails, and editorial content (each at 63%).


How Much Should You Spend on Marketing?

Most marketing professionals recommend spending between 5 to 7 percent of gross annual sales on marketing. However, there isn’t any one specific formula that works best and different organizations have different opinions on marketing spending.

For example; “Entrepreneur” recommends spending between 10 and 12 percent of total gross sales on marketing alone. Iowa State University suggests start-up businesses spend 20 – 30 percent of their total annual budget on marketing in each of the first 2 years of operation and then 7 to 10 percent of their annual budget. What really matters is ROI. If you are spending money and not seeing a measurable return on your investment, you should probably stop spending that money.

What Marketing Platforms Work Best for Small Local Businesses?

 Using any one or all marketing platforms could over time produce very positive results. However, for many local sales people and small business owners the reality is this: running a successful outbound marketing campaign (buying attention) using cold-calling, direct paper mail, radio, television, sales flyers, telemarketing and other traditional marketing platforms is simply not affordable.

The most cost effective way for a small local business to market themselves and their products and services is to attract new customers online.


Why does Online Marketing Work Best for Small Local Businesses?

The short answer is cost. Most small businesses simply can’t afford the cost of running a successful outbound marketing campaign that will effectively influence the buying decisions of local consumers. The longer answer as to why online marketing is a more cost effective marketing platform for most local businesses today is that consumers don’t pay very much attention to outbound local advertising.

The chart shows the percentage of advertisements actually viewed by consumers has decreased steadily for many years. With the use of digital video recorders, on demand video services, satellite radio, digital newspapers and magazines it is likely that the percentage of advertisement views will continue to fall. { 4 }


Local Marketing Report - Ads Viewed

The Effectiveness of Internet Marketing

The latest survey from Brighlocal shows the percentage of businesses who currently use the Internet in some form to attract new customers and how effective they think those efforts are. { 5 }

Local Marketing Report - How Effective is Online Marketing


Why Don’t Consumers Pay Attention to Local Advertising?

They don’t have to. Consumers can quickly find information, compare prices and download coupons independently using the Internet from anywhere at any time.

How Should Small Local Businesses be Marketing Themselves in 2016 and Beyond?

Small local business and people selling products and services should be focusing their marketing efforts on providing valuable information to consumers, not selling their products and services. Consumers are becoming savvier. They have access to enough local information that they can not only find local products and services online, they can compare prices, find special offers and read online reviews. This allows potential new customers to make purchasing decisions without ever talking to a vendor.

If you are selling products and services locally your marketing efforts should focus on providing real information that offers value and promotes credibility.

What Local Marketing Strategies are Likely to Work in 2016 and Beyond?

The Price Waterhouse Coopers annual Entertainment and Media Outlook report for 2016 through 2020 predicts that advertisers will continue to spend at least as much money on all advertising platforms through 2020. The only exception to this is that the amount of spending on print advertising which is predicted to decline in the period as the readership and reach of those platforms declines.

It is important to note that most spending on advertising is done by bigger companies with more than 50 employees that have larger marketing budgets.


Local Marketing Report - Advertising Budget


For people selling products and services locally, local online marketing is the simplest, most powerful and cost-effective way to market in your local community today.

The following local online marketing techniques enable people selling products and services in their local community the best opportunity to provide information, offer value, promote credibility and directly communicate with customers and potential new customers in 2016 and beyond.


Online Content Marketing

Content marketing is becoming more and more important for any online marketing campaign. Despite the fact that technology is developing at the speed of light, marketing is becoming more human. Search engines are ignoring sites that use sophisticated technology in an attempt to improve search engine ranking and favoring sites that provide real content designed to inform and entertain humans. Real content provides information that consumers want.


Online Social Networks

Online social networks are booming and expanding. Despite some predictions of Facebook’s demise as a passing fad, the opposite is true. Sites like Facebook and Google+ are evolving, expanding and becoming more important than ever for small local businesses as a way to interact and communicate with local consumers.



Online video is expanding not only as an entertainment platform, but also as a content delivery platform. More and more mobile applications, social networks and search engines readily display and play videos making them a favorite of users of all ages. The popularity of online video has propelled YouTube to become the second largest search engine in the world behind Google.


Location Based Marketing

Location based marketing will dominate in 2015 and beyond. Smartphone applications, business directories and wearable technology are all focusing on helping consumers search, find, compare, interact, purchase and share information about places, events, experiences, products and services all within their local communities.


Human to Human Marketing

Word-of-mouth marketing is more powerful than ever. As the “Welcome to the Human Era Report”  by the marketing firms Hill Holiday reminds us, we are all still human. Being human matters; humans are conversational, empathetic, inspirational, problem solvers, humorous and make mistakes. The Internet makes word-of-mouth marketing even more powerful today than ever because the tools available online provide a simple, instantaneous and powerful way for people to communicate.


Data driven advertising

Local advertising platforms can be effective in both finding and attracting new customers if research data confirms that the platform is specifically used by people within a targeted segment.









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Author: Jim Merrick