In April 2015, Facebook has activated its „Local Awareness Ads“ service in Germany. The goal is clear: Facebook wants to capitalise its gigantic reach to local advertising customers. The huge amount of mobile users enables the usage of a combined personalised and geographical targeting. Which local sales person does not dream about targeting possible customers right in the moment, when they are on their doorstep?
The strategic approach is not a new one. Google and Amazon are doing it already and other german media companies will follow – scandinavian ones are already on their way. It is the last stronghold of the advertising sector, which has been undisputed until now. The market is huge – we estimate approx. 5.400 k mio T€ p.a. (Source: Schickler Research).
Until now, the regional newspapers, aderviertising papers and radio stations were able to defend their market share properly. On the contrary, national and direct advertising budgets have been redirected considerably.
What can local media companies do regading this budget shift? Instead of claiming a defensive position, we, SCHICKLER, recommend to take an offensive strategy. The key is gaining a regional and mobile reach and the capability to convert it. Regional media companies should create news and special interest portals and combine them with regional orientated theme worlds and market places. The giant reach has also to be combined with classical media stocks. Whoever establishes the right group targeting, has best prereqisites.
However, one is on the wrong path to fully aim for the stength of a local brand. A SCIHCKLER analysis regarding the reach of local brands reveals that only two or three local brand are beneath the top ten companies regarding their reach – and rather on the later positions. It also does not really help to put your trust in the local sales team. The RUBRIKENMARKTPLÄTZE, such as the Scout-Gruoup have shown at the beginning of the century how to build a sucessful country-wide sales team. First, they have focussed on regional Key-Accounters and telephone sales at the beginning and then, step-wise, have encountered one city after another. Prerequisite then and nowadays was: the offer has to be attractive for customers.
For now, the local and regional advertising budgets are in the hands of the regional media companies. Nevertheless, with the generation change at the decision making people, the regional advertsing budgets might be redirected again. Google and Facebook have already started to make their claim. German media companies still have the opportunity to react. But who waits any longer will be left behind.
This article was written by Rolf-Dieter Lafrenz, Consultant and Media Specialist at SCHICKLER Media Consultants in Hamburg. It was also published in german language at www.schicklernext.com.