If you’re new to channel marketing, then you’ve probably noticed how drastically different it is from the national marketing model. Novice local marketers often try to compare national plans and national metrics to channel marketing only to discover that the variances are difficult to explain up to the CMO. To help frame up productive analyses, I’d like to dispel a few common assumptions.
National Versus Channel Marketing
National and channel marketing budgets are very different. Typical national budgets can range from $25K to $25M depending on the brand and plan. So when you look at the typical local budget that ranges from $250-$5K, you can start to sense the limitations in what can be done, especially if you’re familiar with minimum purchases on popular platforms.
Like a home buyer shopping in the housing market, local marketers have to choose the media that they can afford, and it’s usually not the new, exciting option that clients want to explore. Minimum buys shift occasionally, but we’ve documented them for Waze at $30K and Cuebiq in-store traffic reporting requiring five locations and $30K. Pinterest, Twitter, and TikTok have a prohibitive media entry, too. That means that local marketers who want to market on the app that their kids use probably can’t afford it. Those typical local marketing budgets impose limitations, and local partners can often perceive their limited choices as a lack of marketing strategy or creativity, which can cause disappointment in the remaining buffet of media. In fact, local marketers’ choices often come down to budgetary limitations, not lack of enthusiasm or imagination.
Depending on many factors by brand — such as TCMA setup, industry compliance restrictions, co-op or MDF allocations — minimum purchases can sometimes be met through group buys, agency-level commitments to fulfill buys within a year, or other means of charisma and wiles. However, it’s never as straightforward as having a giant national budget and DSPs or platforms lined up to win your business. When comparing national and channel marketing, that’s a big difference.
Setup and Optimization
Setting up a national flight might be as straightforward as taking your three top customer segment clusters by three region types and running a mix of three tactics for $200K, which is then set to optimize to a KPI and checked daily. One savvy marketer might be able to set up those 27 campaigns, QA them, and get them in flight within a day, and still have time for a Starbucks run. That isn’t true for a local marketer.
For a local marketing flight, a lot of alignment is required between corporate, partners, and the marketing execution team on budgets, tactics, franchises’ co-op investment requirements, and educating franchise owners about tactics. It’s a bit like the YouTube meme “Too Many Cooks,” when you start fielding hundreds of inbound calls for assistance and outbound calls to encourage enrollment. In the end, you might end up with 500 enrolled partners who have selected unique, highly customized local targeting goals, varied tactics, and budgets. That’s a lot of cooks in the kitchen, which slows things down.
Once enrollment concludes for local marketing, a team of digital paid media subject matter experts, called SMEs, begin creating the 500 unique campaigns with a total spend of $200K. Some skew closer to $250, others closer to $1K. In these very typical scenarios for a national and channel flight, each cost $200K, but one requires only 27 total campaigns to be setup, and the other requires 500 unique campaigns. That delta, from 27 to 500, equates to a lot of hours spent in management, which then translates to the necessarily higher retainers or commissions to cover the difference in people resources.
Once campaigns are in flight, 27 national campaigns are easier to manage and tweak than 500 local campaigns. It often startles me how attuned our BrandMuscle digital paid media SMEs are to individual locations’ nuances and needs. On calls with corporate clients, our team can respond to inquiries about specific business units without hesitation, because they care deeply about the success of those individual business owners who depend on our campaigns for their livelihoods. That is perhaps one of the ineffable advantages local marketers have over national: We know we’re handling peoples’ livelihoods when we set up and optimize each business unit. It’s a powerful engager for our team members to want to help other individuals have better lives.
Because of the wildly unique campaign setups, and varied mixes of tactics and budgets for partners in the local marketing plan, reporting is also much more complicated. Complicating this further is the need for regional and corporate roll-up reporting, which requires multiple levels of analyses and reflections.
A common cause of consternation for national marketers reviewing channel marketing metrics is that they expect similar results. Unfortunately, the norms of local marketing are divergent from national norms in many ways, just as they are changeable between industries. One of the trickier aspects of this divergence is that there isn’t much publicly available data for quick comparisons of local marketing outcomes within a specific industry, so local marketing SMEs are dependent upon insights from DSPs, platform partners, business partners, and past results. One of the reasons why BrandMuscle is such a great partner for local marketers is because of our deep history of analytics to refer to in creating local benchmarks.
Commission and Retainers
When we think of marketing, we instantly assess economies of scale. However, in local marketing, brands don’t enjoy those same economies, because the scale of 200 Facebook pages without a parent-child setup is 200 individual businesses that must be handled like separate entities. There isn’t a time-savings or a budgetary break when things aren’t organized as a single identity, so local marketing requires a lot of hours to set up each and every page.
Where national marketing agencies can often afford to cut their commissions to 10%, channel marketers are hard pressed to go below 20% because of the drastic difference in people resources required for set up, management, optimization, and reporting on hundreds or thousands of campaigns. Not only is this higher commission a barrier mentally for corporate stakeholders to swallow, it’s also a barrier for digital paid media SMEs to perform highly with the reduced remaining working media budget.
Kickbacks and Perks
In addition to being offered lower commissions and DSP fees, partners often thank national marketers for their loyalty by providing financial perks, such as a percentage of funds to roll forward into future campaigns. Many national marketers even enjoy perks like free event tickets and DSP-hosted team outings. While those discounts, credits, and perks are wonderful for national marketers, they simply don’t exist in the same way for local marketers.
The fact is, local marketers often get special attention for platform issue resolutions, free access to tools to improve efficacy, early warning of algorithm changes that will require strategic pivots and POVs, office visits for training, and other tools to help us more efficiently serve our clients. However, the financial perks that are based on millions in spend just aren’t available to share with local partners, so when national marketers ask about loyalty incentives like roll-forward funds, we’re at a disadvantage.
Who Does This All Benefit?
After going through all of these channel marketing nuances with a client partner that I love, I was asked why they should still partner with BrandMuscle, and what benefit remains for them if we’re not getting and sharing credits and perks for large buys, as well as the other traditional economies of scale. It’s a legitimate question. For all of the disheartened novice channel marketers out there feeling like they’re battling Goliath with a flimsy axe from Animal Crossing, here are some of the reasons why we do it:
- Whereas national marketing builds brand awareness and casts a wide net, local marketing enables nuanced, targeted tactics that resonate with niche groups.
- National tends to stay top-of-funnel, whereas local marketing finds customers when they’re actively searching for a store nearby to complete transactions. Local SEO, accurate local map listings and store hours, reputation management (reviews with timely responses), and microsites can help you win that traffic.
- A national brand might feel like a faceless corporation, but a local office doing organic social and customer engagement feels like Tom who lives next door and hosts community events for your kids, and that engages customers.
- Your local affiliates might feel powerless in the national brand decisions, but when it comes to their co-op or MDF budget, they have a voice and a choice, which encourages partnership and engagement from local business units.
- There are human beings who run those affiliate businesses whose families and communities benefit from local business. If that doesn’t encourage you to lean into local marketing, then knowing that the improved strength and sales of local business units also grows the national brand might do the trick!
Although it can be tedious and tricky to successfully execute local marketing strategies with any margin, there are countless reasons why we do it and you should do it, too! But doing it successfully requires a basic understanding of the differences between national and channel marketing methodologies, metrics, and management hours. You can rely on experts like us to understand the rest.