Local Marketing ROI 4x Higher over National Marketing

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In 2007, auto retailers spent $7.3 billion on direct marketing campaigns driving $248.1 billion in sales, yielding an ROI of $33.81.  During the same period, auto manufacturers spent $8 bilion on direct marketing, driving $77.8 billion in sales, an ROI of $9.68.  Source: Direct Marketing Association

When examining the automotive retailers direct mail, one must ask, “Do the local pieces build brand equity or do they only increase the brand awareness of the retailer?” In most cases, unless there is marketing assistance from a dealer association or the brand, the local retailer is branding all communication for the dealership, irregardless of brand.  While this is not a problem for retailers it does not build any brand equity for the brand and could even dilute the brand.

What does this mean for CMOs and marketers?  CMOs need to take the initiative to invest in local strategies that help retailers to “ring the cash register” while building brand equity.  They can do this by implementing solutions that maintain brand standards and use standardized brand-approved themes while being flexible to be used by local retailers.  This ensures brand-building while retaining the ROI of the local campaigns.

Moreover, CMOs should implement these strategies to build brand equity across all forms of media.  Messages that are unified across all forms of media at the local level are the best for overcoming the media fragmentation that exists.

The ROI is clear – local marketing strategies yield the best results.

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