The Case for Location Based Marketing Budgets: Why DMA Advertising Falls Short

Think you need to blanket an entire market area with your advertising? 

Think again! 

When looking for efficiency in targeting audiences on the most popular channels, traditional agencies have been steering brands wrong by pushing DMA advertising as the gold standard. For businesses with multiple locations, advancements in tech-enabled media targeting across digital channels has reduced the need for traditional DMA marketing. By dedicating advertising dollars in specific local trade areas, retailers, restaurants and service businesses are now seeing far better results versus broad-based advertising strategies.

Forbes confirms that local targeting can dramatically increase traffic, conversions, revenue, and brand recognition. This strategic shift not only cuts costs but also boosts relevance and engagement—making it an essential tactic for brands that operate across seemingly similar, but often very diverse, groups of locations.

1. Hyperlocal Targeting: The Key to Enhanced Engagement

The frontier of location based advertising is hyperlocal budgeting and targeting. By customizing audiences for each geographic location within a DMA, brands access the specific consumers in each trade area who fit their ideal demographic and behavioral profile. Brands are rewarded with highly precise targeting, resulting in higher engagement rates and conversion rates, and reduced costs per thousand impressions (CPMs). And we’re just getting started.

Get Straight on Hyperlocal Targeting

• Demographic Specificity: Ads can be tailored to mirror the demographic characteristics of each location, appealing directly to the local population's preferences and needs. Kumon Learning Centers uses Hyperlocology's platform for precision targeting, and participating locations saw an 85% increase in conversions in the first 6 months.
• Behavioral Insights: Leveraging local consumer behavior data ensures that advertising efforts are aligned with the actual interests and purchasing habits of the unique local market.
• Interest-Based Targeting: Ad creative can be customized to address the specific interests prevalent in each trade area (music, style and more), thereby increasing their relevance and appeal. DMA-wide creative is not only unnecessary, it’s less effective.

Go Deeper: Unlocking the Full Potential of Hyperlocal Targeting

2. Reduced Competition Through Strategic Ad Placement

Location based advertising inherently reduces competition by focusing on specific audiences within multiple, distinct geographic areas. This strategy prevents brands from competing against each other for the same ad inventory across a broad market, reducing CPMs. By concentrating on narrower segments and geographies, advertisers can avoid the saturated general market, targeting potential customers more directly and efficiently.

Analyzing Reduced Competition

• Exclusive Market Access: Targeting ads at a local level often means less competition for placement, as fewer brands are at the table aiming for your specific segments in a tightly-defined geographic area.
• Cost Efficiency: With reduced competition, the cost of advertising drops, allowing for more frequent or diverse ad placements with the same budget. Winning!

Go Deeper: How To Improve Ad Buying Efficiency as a Multi-Location Brand

3. Locally-Relevant Optimization: Maximizing Campaign Effectiveness

Managing campaigns on a per-location basis creates the unique advantage of optimizing based on specific performance data from each area. This localized approach enables marketers to fine-tune their location based media and creative strategies, ensuring each ad placement is as effective as possible. Continuous optimization based on local feedback and performance metrics can lead to progressively lower CPMs and higher ROI. Ask yourself, why would you optimize a very large DMA ad spend based on noisy results?

Optimization Techniques for Local Advertising

• Performance Tracking: By monitoring ad performance at the local level, marketers can quickly adapt strategies to enhance effectiveness.
• A/B Testing: Different approaches can be tested within various locations to determine what works best in each context, allowing for a highly customized strategy.
• Data-Driven Decisions: Localized performance data guides the allocation of budgets and resources, maximizing ROI and minimizing waste. And haste.

Go Deeper: 5 Benefits to Local Optimization of Market-Wide Campaigns

Challenges and Solutions in Multi-Location Advertising

While the benefits of per-location advertising are substantial, managing multiple campaigns can increase complexity. However, with the advent of sophisticated digital marketing tools, these challenges can be effectively managed. These tools facilitate seamless campaign administration, allow for granular control over each location, and provide insights that help fine-tune advertising efforts.

Tools and Strategies for Effective Management

• Integrated Marketing Platforms: Platforms like Hyperlocology allow for centralized control while providing the flexibility to manage and adjust campaigns for each location independently. PJ’s Coffee adopted the platform and saw a 49% increase in same store sales.
• Location-Specific Budget Allocations: The performance of ads on various media platforms can vary by location. It’s critical that each location utilize and optimize the channels that perform the best in their trade area.
• Centralized Analytics: A unified analytics dashboard provides a holistic view of all campaigns, making it easier to compare performance across locations and streamline operations. If you’re only viewing market-wide MROI reporting, you’re reading below grade level.

For regional or DMA-wide marketing efforts, budgeting and targeting at the location level addresses the unique needs of each trade area, and enhances overall campaign performance across the entire market. By understanding and embracing the potential of location based media, brands can unlock a powerful tool in their marketing arsenal, leading to more effective and efficient advertising outcomes.

Ready to see the location based marketing experience on Hyperlocology?