To kick-off BIA/Kelsey NATIONAL, the analyst team sits down to review 2015 – 2019 local advertising across 12 different channels and 94 industries, summarizing key issues for marketers over the next half decade.
Michael Boland, Chief Analyst and Vice President of Content, BIA/Kelsey
Peter Krasilovsky, Vice President, BIA/Kelsey
Steve Marshall, Research Director, BIA/Kelsey
Stacey Sedbrook, Vice President of Strategic Sales Consulting
Steve Marshall opens with our Local Commerce Monitor results on franchisees. They send $87K-plus, the highest level of marketing spend among the SMBs BIA/Kelsey tracks. They are highly engaged in digital — 42.9 percent of 2015 spending will be on digital; again, far ahead of the average SMB.
Franchises also spend at least 10 hours a week on social networks. About 85 percent maintain customer lists (compared to only about half of SMBs have customer lists in digital form). Seventy-one percent of franchises will have a loyalty program this year. This is a vindication of loyalty programs. Hand in hand with these loyalty programs, franchises are driving huge investments in discounting — 50.7 percent of revenue will be due to discount sales tied to loyalty programs.
This is the wave — loyalty and discounting — that will sweep the local space. There will be a much deeper, more committed relationship between the franchises and customers.
Franchises tend to favor buying through on-premise sales reps (feet on the street), even though many have national agency relationships. The franchises buy most through agencies and are extremely satisfied. Sixty-three percent are extremely satisfied with their agency relationships, though they prefer making individual purchases with assistance (expertise) from the agency. “They like a partner for these activities versus doing it themselves.”
Co-op advertising represents about $50 billion in U.S. spend annually and franchisees are the most prevalent users of co-op (more than 50 percent of all co-op monies flow through franchises). As a result, they want more analytics and analysis for their planning and assessment of campaigns.
Next up, Mike Boland discusses technology, particularly mobile.