Is Local Marketing Dying?

It seems as though a bunch of headlines in the online marketing arena say that local marketing is the ‘next big thing’

But is it? Really?

Local marketing may be a required bit of business… but the end result is that the hype behind local marketing and the reality of local marketing are two different things.

The simple fact is that there have been some pretty massive efforts to lay claim to the local marketing category for decades.

Originally ‘local marketing’ was primarily owned by the yellow pages and traditional directory advertising. Newspaper, radio, and television also had a sizable chunk of local market share.

Then the web came along and groups like tried to lay claim to it, yet in 2010 SuperPages went through ‘explosive decompression’ with an Idearc bankruptcy to be rebranded under SuperMedia.

In 2012, Local Marketing is still dying…

Below are a few stock examples about companies that focus on the local marketing industry. In all four examples you can see a very negative trend in stock pricing that tells you what the current industry looks like.
(stocks graphics below from Yahoo Finance)

  • ReachLocal – ($6.61 share price Jan 3rd)
  • – ($2.25 share price Jan 3rd)
  • SuperMedia – ($2.95 share price Jan 3rd)
  • Marchex – ($6.40 share price Jan 3rd)


local marketing dying

The simple problem is…

That large scale organizations like ReachLocal, Superpages, Local, and Marchex are having extremely difficult times scaling technology against shifting customer demands that are being force fed by leading sites like Google and Facebook.

These mid-tier companies are being squeezed from the top and bottom into an extreme pressure cooker.

Google and Facebook are constantly maximizing revenue categories and when they see a loop hole or abusive technique begin to erode their own advertising systems they deploy a software update or make it against the terms of service (ToS) – This means that the mid tier organizations are constantly developing a ‘sacred cow’ only to discover that Google or Facebook has the beast firmly in the cross hairs.

On the bottom side of the marketplace you have very aggressive and nimble start-ups that can pivot on a dime.

These highly maneuverable niche competitors are making millions on highly profitable niches like dentists, lawyers, and small business retail. The more nimble companies are adept at monetizing profitable niches and have higher market penetration by focusing on highly targeted customer segments (without being distracted by the general consumer marketplaces.)

Stock prices reflect customer & employee sentiment

As organizations attempt to restructure and maintain competitive revenue streams that are being dissolved from both the top and bottom of the industry, clients and employees are turning to tools that shed light on the internal challenges this type of business faces.

(link to ReachLocal Glassdoor Reviews & ReachLocal Pissed Consumer Reviews)


The Market Shrinkage Effect

At the end of December 2011, local online marketing firm WebVisible declared itself a member of the start-up deadpool after spending $17 million in venture capital trying to create a niche for itself in the local marketing game.

This highlights a number of other local marketing cases where even nimble start-ups who attempt to ‘generalize’ and over commit to penetrate the general marketplace are falling short of positive revenue earnings.


My Thoughts

Local marketing isn’t dying.

The ability for major corporate efforts to ‘carbon copy’ and scale repeatable business models is dying.

As a business professional you have to think about the speed at which not only local marketing is changing, but the speed at which all online and social marketing techniques are changing.

Any organization that has a problem showing both a strategic and tactical execution plan for local online marketing needs to be heavily questioned. There should be on-going 30, 90, 180, and 365 day plans to benchmark effectiveness of your messaging tactics and to radically change the direction of your business should your market shift.

The reality is that new mobile technology, the trend of social adoption, and the way your business interacts with these will be a critical lifeline for the future of your business.

What do you see as the future of local marketing in 2012?

Will models like Groupon or Living Social accelerate this churn?

2 thoughts on “Is Local Marketing Dying?”

  1. Thanks for doing the legwork on this Barry. It seems that between you and Media Bullseye today, we’re really getting our marketing paradigms challenged.

    I have to agree with you that while the players and the gameplay may change, there’s still lots to accomplish for our clients that want to pursue local marketing opportunities. But, again as you point out, the sands are constantly shifting and as such measuring and testing needs to be an ongoing constant.

    At the least and regardless of the traffic they pull in, it’s nice to be able to make use of well-ranking local profile pages to bump the competition off of SERPs.


  2. I agree with parts of the local marketing dying… but that most of the dying elements are actually being marketing and sold by slow moving organizations who can’t shift gears fast enough.

    For the most nimble businesses and for the right marketing teams, there is a huge amount of opportunity in the local and mobile space where millions (if not billions) of dollars are going to be made on a niche by niche basis.

    The SERPS and the traffic those keywords represent will be a hot commodity in 2012 and 2013 I suspect, until a shift in the mobile space hits critical mass and realtime browsing/search behavior takes a lead role. When that happens I think we will see some pretty interesting changes in the local marketing mix.

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