Does Selling Local Digital Make Any Sense?

If you attended CRS 2011, I don't need to introduce you to Shelly Palmer.  His keynote which placed terrestrial radio in context with all the emerging techno gadgets, websites, mobile devices and media consumption trends, if you missed it last year, is worth downloading.

Never a boring speaker, always challenging conventional wisdom, Shelly is doing it again this week in the wake of last week's Madison Avenue Advertising Week:

I asked him how much he thought he should spend to create a website that would increase his business. “I don’t know,” he answered. “The one I have was free.”

When I reiterated that his free website was probably hurting his retail business rather than helping it, he asked me for some free suggestions that he could implement for free that would … yep, you guessed it … get him to the front page of Google.

This is a real conversation that actually took place. I’ve changed the owner’s name, but other than that, this is exactly how it went. Let’s review:

• A retailer with two doors, one in Manhattan and one in Brooklyn.
• A website that was created for him as a promotion by a template-using website company with the hopes that he would eventually pay.
• A business owner with absolutely no clue how advertising, marketing, sales and PR work in the 21st Century for local retail businesses in his vertical.
• A business owner with zero aptitude and zero headcount to implement even the simplest technological solution.

This week, I have seen about 20 pitches from companies offering hyper-local and location-based solutions targeting local advertisers. Next week I will probably see 10 more. Hasn’t anyone spoken to Harry?

There is no incremental local retail advertising to be had. The money simply isn’t there. If a local company is big enough to advertise, it is already doing it. If it is not big enough to advertise — there’s a reason. The myth of local advertising is that it exists at all. It simply does not.

Local online advertising a myth?

That will come as a surprise to Borrell Associates, which in early September reported:

1. Local online advertising is growing 21% this year.  If your operations are growing more, you’re gaining share.  If not, you’re losing share.
2. Our forecast might shock you.  It calls for 30% growth for 2013.  While it’s a bit early to issue accurate forecasts, our surveys of local advertisers indicate that this rate of growth is likely. If you find this hard to swallow, perhaps the information on page 3 will help.
3. Local media companies should be aiming for a 15% to 20% share of online ad spending in a DMR.  The upper limit is 42%.

However, percentages aren't the same as real dollars and when you start with the estimate that terrestrial radio will bill something like $15 billion in 2012, and you look at the measly portion of total revenues digital is contributing in that same Borrell report it begins to look like Palmer is on to something.

Wouldn't it make more sense to chase after a larger share of the 97-99% piece of our pie, let alone the swiftly-shrinking newspaper ink money, and permit the lemmings to trumpet digital growth?

Start showing your local merchants copies of Shelly's perspective and then share your "radio gets results" testimonials from their local competition using your station successfully right now.  Finally, pull out this video.

Believe it; champion it.   Local advertising is not a complete myth as long as we understand our medium's real strengths and teach those local prospects with budgets too small for the internet that by using today's radio we can help them grow no matter how many doors they own, even just one.

If we fail to do it while chasing pennies instead of dollars, we'll be responsible for making Shelly Palmer quite correct in a very few years.