Franchise Ad Funds and Adopting Per-Location, Hyperlocal Strategies
Every franchisee wants to know what they are paying, and what they will get in return.
Every franchise brand marketer has heard the question: “How are my advertising fund contributions specifically helping my location(s)?”
The brand fund, marketing fund, or whatever your franchise system calls it, is established for things that franchisees wouldn’t, couldn't, or shouldn't necessarily do for themselves, from national TV advertising to sophisticated digital advertising.
Whether you have a long-established ad fund or are looking to start one for a burgeoning brand, ad fund requirements must be accountable to all franchisees and evolve with brands as they grow.
Why do ad funds create tension for franchisors and franchisees?
Friction is caused when franchisees don’t have a transparent view into how their advertising fund contributions are spent, and there may be speculation that funds are wasted. It’s also not unusual for franchisees to think that their location isn’t directly benefiting from local or regional advertising efforts, especially if DMA targeting is in place.
Learn How Collaborative Franchisee Tension Can Help Your Brand.
Adding fuel to the fire is a rapidly changing advertising and marketing landscape where tactics and technologies have enabled brands to launch innovative marketing campaigns, precisely targeting consumers and communities in ways that weren’t possible before.
Ad funds are not always equal marketing opportunity
When individual marketing contributions are being aggregated to fund national or regional marketing programs, some locations inevitably get left behind. If a franchisee location is brand new in a community, name recognition certainly won’t drive foot traffic through the doors.
The marketing equality problem typically occurs when national or regional co-op advertising budgets are being allocated to fund geo-targeted digital campaigns for specific DMAs. Broad targeting can eat up national budgets, eventually sending the bulk of funds toward the heaviest populated DMAs or to areas that generate the most ad clicks and conversations (also likely to do with population numbers).
Since franchisees are typically required to spend additional resources on their own local marketing, this also causes challenges, from brand compliance to cost-efficiency. Without national buying power or strict brand oversight, local franchisee campaigns can fall flat, causing even more frustration.
Some franchisees are contributing to an ad fund that may not really benefit them, while unfairly helping others. They also have little to no opportunity to customize campaigns that are for their community. That’s a situation ripe for disaster.
These factors are especially important to consider if you’re a franchisor who is looking to establish an ad fund for the first time.
Creating an ad fund that's accountable for all
Advertising campaigns can, and should, be executed with individual budgets equal to specific location contributions. Franchisees want the ability to localize their ads to ensure that their audience in their community is receiving relevant, compelling, and timely messages. This level of transparency and collaboration is needed to win local markets and build trust between franchisees and franchisors.
Multi-channel execution across the most powerful channels, from Facebook and Instagram, to Google and programmatic, should be able to be leveraged by every location without concern for minimum budget thresholds. Every franchisee deserves access to location-specific reports, data, results, and business insights.
Gone are the days of working with dozens of local marketing agencies, managing complicated spreadsheets, and taking days to review data to make sense of results. Whether you’re launching a new ad fund or looking at ways to improve your existing franchise system program, Hyperlocology can help.
Our franchise marketing platform gives brands the power to launch localized advertising with custom budgets, targeting, and reporting - and delivers real-time business insights - in one central place.
Check out what our customers have to say about creating greater transparency and stronger relationships with their franchisees.
