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The ever-increasing value of local social advertising

In the days leading up to the Facebook IPO, automotive company GM made headlines with its decision to stop paid advertising on Facebook. Last week we talked about what GM’s decision means for Facebook advertisers.
Now, thanks to some new research, we have a better picture of what the social advertising space looks like as a whole.
Social network ad spending is set to grow 43% this year in the US to $3.63 billion, according to eMarketer. By 2014, that figure will continue climbing to $5.59 billion. BIA/Kelsey is even more optimistic, predicting social ad spending to reach $4.8 billion this year and $7 billion by 2014.

These are incredible growth numbers, but they shouldn’t surprise anyone. After all, half the US population uses Facebook. If you’re a brand that wants to connect with consumers in the US, then it’s absolutely clear you cannot ignore a social network with that kind of reach.
Importantly, BIA/Kelsey notes that most ad spending will continue to be nationally focused, “but a growing chunk will come from local ads.”
But why local? Because, as it turns out, consumers actually respond positively to locally-relevant ads.
A recent Neustar study found that 8 out of 10 people prefer local ads because it personalizes the relationship between business and consumer, while keeping things anonymous. Furthermore, people feel special when they see an appropriately targeted ad, encouraging them to click through and drive conversions.
None of this means that only SMBs and independent shops can succeed with social ad spending. Walmart, one of the largest corporations in the world, recommitted to a “social-local strategy” by launching thousands of Facebook pages, one for each of its brick-and-mortar stores. Like Hearsay Social customers Farmers Insurance, 24 Hour Fitness, and Northwestern Mutual, Walmart has discovered the incredible value of reaching out to customers on a local level.
To learn more about the power of going local on social, check out this recent report on the value of local Facebook fans.

Ronny Kerr

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