Local is the New National

Solving the local advertising spend problem with technology.

By Ryan K. Vaspra

It’s a well-known axiom in franchising that only a small percent of franchisees actually spend the local advertising dollars required by their franchise agreements. Franchise executives responding to a 2013 Franchise Update Media Group marketing survey pegged the number at 30 percent. Yet, according to that same survey, franchisors believe that one of the three most important factors for building their consumer marketing success is “franchisee buy-in, engagement, and execution of local marketing efforts.” Franchisors know that local advertising programs are critical to growing their companies, yet they acknowledge that 70 percent of their franchisees don’t spend on local advertising. Why the disconnect? Most franchisees don’t have the resources, tools or know-how to create the right local marketing mix and execute it in their local markets. The result is they “throw darts.” They’re constantly bombarded with calls from marketing companies, so when one tactic doesn’t work within 30 days, they abandon it and try another. The results are frustration and wasted money. Franchisees complain that they already contribute a substantial amount to advertising through royalties and they don’t get anything in return at the local level from national ad campaigns. If only corporate would use that money in a way that directly benefited local franchisees, they say, that would solve the problem. Most franchisors don’t have the resources to consult with every franchisee to set up and manage their local marketing mix, especially if they have to research and source local vendors to provide the services.

All Advertising is Local

There is a famous saying coined by former U.S. Speaker of the House Tip O’Neil that states, “All politics is local.” The idea is that an elected official’s ultimate success is directly tied to his ability to address the issues that matter most his constituents. In franchising, one could argue that “All advertising is local.” The local market surrounding each unit is where advertising has its greatest impact, and the concept of “national advertising” is really passé today. It’s a holdover from the way TV advertising was once bought and delivered − nationally, across the entire network. However, with the recent explosive growth of online video viewing and the emergence of hyper-local, programmatic video advertising technology, the same commercials can be personalized for each franchisee’s local market area, effectively transforming national advertising into high-performance, cost efficient, precisely measured, hyper-local advertising.

National Advertising at the Local Level

Every franchise corporate office would love to have a bigger budget for the national advertising fund to build the brand. And every franchisee would prefer to see measureable results in their own local areas from the national advertising funds they contribute. This is an “Everybody Wins” advertising program. It gives corporate a consistent voice, standards and message in all market areas, maintaining the critical brand integrity needed for driving customer marketing success and growing the network through franchise sales. Using the proper technology and best practices, franchisors can achieve a high percentage of franchisee participation in a new local ad program while minimizing costs and resources required to run it. But it has to be turnkey and frictionless. If all the franchisees have to do is say “yes”, it will be easy for them to opt in. It also gives franchisees the satisfaction that their advertising contributions are being spent on them in their local markets and they can see the exact results the program delivers. And because the technology and tools are managed from a central source, the program is a lot more cost-efficient and effective than it would be if each franchisee developed one individually.

Best Practices for a Turnkey National-Local Ad Program

1. Fund the program.  By combining the national advertising fund with local marketing dollars, you can create one national-local fund committed to producing the biggest impact where the cash register rings: the local level. Since franchisors are required to update their franchise disclosure documents within 120 days of the expiration of its fiscal year, this time presents an opportunity to improve the franchise agreement by including provisions to create a national-local advertising program.
2. Program details will differ from franchise to franchise, but the overall objective is to combine 1 percent to 2 percent of the national advertising fund with 2 percent to 3 percent of local advertising funds to fuel the new advertising program.
3. Select the proper technology and toolset.  There are companies that you can find within the IFA Supplier Forum that can both implement local advertising at scale, as well as manage it with limited resources.
4. Centralize Ad Creation.  Produce brand video, pay-per-click and display ads for each franchise unit. PPC and display ads are neither difficult nor expensive to create and localize at scale, but video ads are more complex. Fortunately, Sightly’s platform also enables franchisors to localize and personalize a brand commercial for every unit’s market area.Centralize Campaign Management.  Coordinate the set up, management and optimization of the campaigns for online video, SEO/PPC and display, as well as directory listings and online review programs at the corporate level.
5. Provide Regular Reports.  Whether it is a document or spreadsheet you email to each franchisee or an integrated dashboard, provide transparent visibility to what is being spent in each local unit market for each campaign and the results it is generating for each franchisee.

Franchisors who combine their national and local advertising funds and centralize management of video advertising, SEO, search, display, directory management and reputation/reviews for the entire network can win franchisee participation and accelerate franchise-wide growth by enabling the most effective and cost-efficient ad programs where they matter most, in the local area markets. Franchisors should also coordinate with their franchise sales teams to ensure that the new national-local advertising fund is positioned as a benefit for prospective candidates: turnkey, frictionless local advertising transparently spent in their local markets.

Ryan K. Vaspra is senior vice president of product and operations at Sightly.  Find him at fransocial.franchise.org.