Marchex Report: Corporations with Local Branches Likely To Lose Billions Each Year in Digital Ads

A report released today by Marchex, Inc. (NASDAQ: MCHX) found that billions in ad dollars likely go to waste when corporations with local branches invest in separate digital marketing campaigns with no centrally-controlled brand message.

The report, titled “National Brands, Local Growth,” noted that this lack of marketing coordination creates unhealthy competition among those working for the same brand – a systemic inefficiency that drives up the cost of advertising. National advertisers spent $42.5 billion on local media advertising in 2012, according to BIA/Kelsey, a media research firm. That number is expected to increase more than 20% by 2017.

“In digital media, national brands and the local businesses that represent them are often running separate, uncoordinated advertising campaigns. But this approach doesn’t work when you’re dealing with a constantly evolving and fragmented landscape,” said John Busby, Senior Vice President of the Marchex Institute and author of the report. “That’s why advertising coordination is key. It drives down marketing costs and equitably distributes leads among local branches.”

The Marchex Institute, the research and insights team at Marchex, examined phone call data from more than 10,000 digital campaigns across more than 40 small business categories. The team also conducted dozens of hours of interviews with local businesses.

The analysis found:

• Coordination significantly lowers marketing costs. Competing locally can double the cost of acquiring customers.
• Consumers prefer human connections. Consumers prefer phone calls over digital interactions for most local service-based businesses. The data found that when consumers were given the choice of a form fill or a phone call, consumers opted to call 81% to 89% of the time.
• Local businesses are overwhelmed. Agents and representatives want to spend more on digital advertising aimed at customer acquisition, but are not prepared to handle the inherent complexities of digital media.

“When corporations and their local branches cooperate in advertising, local representatives can focus on what they do best – turn new prospects into lifelong customers,” Mr. Busby said.

Mr. Busby will be speaking about this topic and Marchex’s solution for national advertisers with local branches today at the OMMA Mobile conference during Internet Week in New York City.

Download the full report here: www.marchex.com/localgrowth.