The Franchise PPC Problem: How to Avoid National and Local Ad Cannibalization

Working with dozens of franchise brands, it’s been interesting to see how digital teams have structured their national pay-per-click (PPC) programs. Many are so narrowly focused only on their national campaigns, they’re not as in tune with the local campaigns their franchisees are running. 

If corporate marketing teams are running digital campaigns on behalf of local franchises, they’re likely not set up and optimized in such a way where they’re being given enough TLC to drive meaningful results at the local level. While some brands get it right, many others have failed miserably. 

For brands to truly be successful in their franchise digital marketing efforts, they need to fully embrace the opportunity that local PPC, display, and programmatic campaigns present to benefit not only local franchise-owned locations but the brand as a whole. Google and other search engines have been incredibly vocal in recent years about the power of localizing digital campaigns, and rightly so. A study from Social Media Today found that 46% of all searches on Google are seeking local information.

If you are a large national franchise brand with local brick-and-mortar locations, distributors, independent agents, or channel partners, it’s imperative to drive traffic to those direct sources.  Don't send customers to your corporate site where they will spend time figuring out where to get your product/service or how to find the location nearby - or just leave.

The national vs. local franchise marketing challenge

Franchisees are generally only concerned with sales in their location(s). Meanwhile, corporate digital marketing teams have to balance launching national campaigns to drive sales to corporately-owned locations in markets where franchisees may operate. Marketers also have the task of trying to maintain brand compliance and consistent messaging at the local level.

Franchise Advisory Councils (FAC), Marketing Advisory Councils (MAC), or National Marketing Fund Councils (NMFC) within most franchise organizations are the voices of the franchisees. If there’s a national advertising fund within your franchise system, funds are pooled using aggregated franchisee contributions based on store sales. These are usually controlled by a FAC, MAC, or NMFC.  This ad fund is used to promote and build brand equity across the franchise system through marketing efforts. In theory, the fund should benefit all locations equally, but that can be very complicated when it comes to digital marketing. 

When national PPC or display ad campaigns are built using a single national ad fund budget, or on a regional or co-op level, the results on the major ad networks are guided by broad programmatic optimizations based on clicks, conversions, impressions, or other KPIs that drive the spend. Performance and budgets typically shift toward larger metro markets with larger populations or to certain ad groups that are performing well for most locations but may not be impacting others at all.

Learn how to create an ad fund that's accountable to all franchisees. 

The ability to gather local data and optimize all campaigns suffers when national and regional campaigns are executed and campaign delivery is only optimized toward performance. Post campaign data is only representative of the audience where the most conversions occur. In many cases, the brand will then try to retrofit a strategy that’s only representative of the results in the biggest markets and apply it to other DMAs. This strategy will leave a huge percentage of locations outside of a DMA with major targeting issues – not marketing the right product to the right customers and wasting a lot of money. 

Depending on your industry and how campaigns are structured, rural, small market locations may have trouble generating enough impressions and clicks to even hit their budget. As a result, those franchisees aren’t receiving calls or leads on their local websites, nor foot traffic at their stores, to help drive revenue to their business. Additionally, if the right negative keywords and local search terms aren’t in place, the quality of leads can also suffer. 

The theory that all locations will benefit equally from national ad fund marketing efforts is not a reality. All franchisees do not benefit equally. Having experienced this across multiple franchise organizations, it’s become apparent that this is the biggest franchise marketing problem brands face when trying to execute local store marketing. This becomes a bigger problem when there isn’t transparent reporting, and franchisees don’t see nationally geo-targeted PPC marketing campaigns, or regional/local campaigns, immediately benefiting them at the local level.

The Franchise Marketing Plot Thickens and Not in a Good Way

So what happens next? When franchisees aren’t seeing transparency in reporting or getting the results they want, their solution is to seek out their own self-funded strategies and set up their own local campaigns. Some, even though they’re not marketing experts, will try to do this on their own. Others will go out and hire a local ad agency.  While their decision may not be wise or correct when they have their own bottom line to worry about they want to take immediate action.

The problem worsens when there are dozens of franchisees or local agencies all doing their own thing and not working to integrate their strategies alongside the brand’s corporate marketing efforts. If there isn’t a sophisticated multi-location marketing platform or single agency in place to execute local store PPC, display, or programmatic marketing programs that complement the brand’s national campaigns, they will inevitably start competing against each other for the same terms. This becomes the ultimate form of franchise digital marketing cannibalization. 

When franchisees and franchisors are not in sync with their digital marketing efforts, PPC and display ad cannibalization wastes both national ad fund and local store marketing budgets and ultimately leads to a poor ROI for everyone.

What can franchises do to eliminate PPC cannibalism between franchisees and even the franchisor? 

A competent digital marketing plan includes defined goals and keywords, effective geo-targeting, customer data, and national and local collaboration. Franchises need to set clear strategic guidelines across their franchisee network to ensure everyone is operating under the same logic with the same goals in mind, complementing each other, not competing.

Here are 5 ways to help your franchise brand avoid cannibalization and ensure both franchisors and franchisees come out winners:

• • Keywords – Identify the keywords each franchisee should bid on and those that should not bid on using negative keywords, which will help prevent competition. Consider whether or not brand search terms should only be part of national campaigns or included within local campaigns as well (e.g. Domino's near me). On the local level, use more long-tailed keywords with location-specific search terms. 
  • Geo-Targeting – Consider an overhaul of each franchisee’s and the brand's geo-targeting, which should prevent overlap for PPC cannibalism. Focus more granularly on the zip codes within each franchise territory or layering zip codes over radius targeting for an even more focused approach. Be careful to not go too small in limiting matchable searches, especially in more rural markets. This can lead to volatility, low traffic, and poor performance. The brand should be removing those same zip codes by using negative locations within the geo-targeting of national campaigns to avoid competing for the same keywords and search terms used in local store campaigns. Geo-targeting allows you to gain a detailed view of local reporting at the store level. 
  • Franchise Territory Overlaps – In areas where franchisee marketing territories may overlap with each other or corporate, or when targeting customers in a “grey area” between two territories, consider collaborative efforts to run the same promotion across multiple local campaigns. While you can assign and split up zip codes, ensure these campaigns are not using the same keywords. Setting up regional/co-op advertising budgets and campaigns using pooled funds may be helpful in this scenario, but individual budgets are an even better approach to ensure the customer who clicks a store campaign will purchase from that specific location. In those neutral territories or gray areas, you may choose to target people who are not physically in the designated location (store service area) but are online searching about it.
  • Location-Specific Ad Content–Writing locally relevant ad copy can encourage consumers to call or visit your business online or in person. According to Google, four in five consumers want ads customized to their city, ZIP code, or immediate surroundings. Make sure that the language in your ads speaks to the location you are targeting. This will eliminate confusion on where the customer should go and help avoid competition. The use of location-specific landing pages and local store call tracking numbers is also critical.
  • Give Franchisees a Piece of the eCommerce Pie – If you’re a franchise brand that happens to drive national and/or local PPC traffic to an eCommerce site and use product landing pages versus local store landing pages, there are still workaround solutions to ensure the store gets the credit. Some brands have set up programs and sophisticated tracking where the franchisee will receive a portion of revenue from any product sales generated by local organic or paid search that drove a customer to the website to purchase versus into a local store.

The ultimate franchise marketing combo: Brand Directed. Locally Perfected. 

The ideal scenario is executing local store PPC in cooperation with national programs and gleaning insights from the data on one program to benefit the other. Strategic guidance for keywords, targeting, and approved brand creative/messaging is owned by corporate. Franchisees are then empowered to invest their additional local marketing budget and given access to customization options they can tailor based on community preferences. They also will get full visibility into their local campaign performance reporting so they know exactly how their local ad dollars or national ad fund contributions are benefitting their location.

When franchise digital marketing is done right, local PPC campaigns may outperform large national brand campaigns and show up higher in rankings thanks to Google’s algorithm that gives precedence to local search results. 

Every franchise brand must take into consideration how national and local paid search, display, and programmatic ad campaigns are structured.  Allocate a national budget, but provide individual budget options for local stores. Even if there isn’t funding for location campaigns, encourage franchisees to use the same strategy and systems that are used at the corporate level.

Ideally, find a technology-based solution that allows you to manage digital marketing campaigns at both local and national levels while giving franchisees individual local community input under the strategic guidance of the brand. It's critical that you can also leverage data and insights gained from geo-targeted campaigns at the national or DMA level, which can be applied to any campaigns set up at the local community level. 

If you want to dig in more on the topic, read our guide to Transforming Multi-Location Digital Advertising from Siloed to Centralized - just click the button to open!