Chocolate retailer Thorntons announced this year that it was closing more than 180 shops. Clinton Cards went into administration before selling 400 stores to an American company, while closing a further 350. Even Marks & Spencer recently announced its worst trading performance in three years.
Poor trading conditions and weaker footfall in the highstreet have been blamed for the recent ill luck, but there is a much wider problem here. British consumer habits have changed. The UK has migrated online.
In 2011 the government asked Mary Portas, TV's Queen of Shops, to be its highstreet tsar. Her report on the state of British highstreets was widely criticised for barely mentioning the important role of digital channels to UK retail.
A new round of government funding was announced in July to provide support for Portas' plans. 15 further towns join the 12 that were recently announced as 'Portas Pilots', set to receive mentoring, advice and aid, not to mention £100,000 to spend revamping their most visible retail strip. However, the other 400 towns that applied for the scheme have so far been left to fend for themselves.
14.6 per cent of highstreet shops across Britain currently stand empty, with many more on the way unless something can be done to inject some life back into the retail arteries of UK towns. The 400 towns that missed out on the Portas scheme should be using cost-effective online advertising -- ignored by the Queen of Shops -- to coax local shoppers out from behind their computer screens and back into highstreet stores. However, a lack of effective systems that work on a local level have constrained the widespread use of targeted online ads to drive local customers in store.
The five most common misconceptions about online advertising that we at AdDynamo hear from highstreet businesses are:
1. We're not an ecommerce company -- Nor is Starbucks. Their primary business is offline purchases -- you can't buy a cup of coffee online. Recently the coffee shop brand ran a campaign in which they gave away a free latte to anyone who got to their local store before noon, with spectacular results. Businesses don't necessarily need to give stock away, but letting local people know about offers and events at the local store can help to create that sense of occasion that will drive customers to make instore purchases.
Ad Dynamo ran a rich media campaign for EA Games on msn.co.uk with no destination website and no online call to action -- the ad simply introduced a new game and allowed customers to explore some of the key features. On the day of the game's release in store sales went through the roof. It doesn't just work for big brands though. Businesses such as local cafes, bars and boutique shops can target local customers with online ads, and drive the online community to their premises to make offline purchases.
2. Online ads don't work, and so are a waste of money -- Budgets have been tight since the recession became a regular headline grabber back in 2008, and, according to the Prime Minister, austerity measures will be in place for some time to come. Keeping costs down is a major concern for all UK businesses right now, not just small shops. Poor results of ad services from large search providers have soured many businesses on online ads. Those businesses have seen too many supposedly locally targeted ads being clicked by the wrong people, and thus the budgets put into them squandered. It's this poor practice that drove us to develop the Ad Dynamo Local Beta service to deliver businesses guarantees, transparency of advertising performance and true value for money.
3. It's not going to get seen by the right people -- Businesses need to be assured that their ads will be seen by local customers. Online ad services should be able to guarantee thousands of local ad views each month. Ad Dynamo Local Beta guarantees 50,000. The targeting capabilities of social networks like Facebook really help businesses to reach local audiences with super-specific ads for their local stores, but people don't just spend time on social media -- whatever anyone says. Ad Dynamo Local Beta harnesses the power of Facebook but also uses a wide, quality network of local publishers to target local people.
4. Even if it does work, we won't understand how -- Businesses need to know their ads are working. However, the way online ad services monitor performance is often represented with garbled technical jargon that no one running a local campaign will be able to understand. In developing reporting tools for our system, we've cut out the hassle of data interpretation and use simple, clear language in the performance reports, so that local branches and stores can get on with serving customers. Simple monitoring reports with the flexibility to provide more complex data upon request enables local branches and smaller businesses to let the ad system do the work for them.
5. We don't even have a website -- Big brands are by no means the only ones who make up our highstreets. 95 per cent of UK businesses are micro businesses. They account for nearly a fifth of the national economy and turn over an aggregate of more than £613 billion each year. This is not to mention the rapidly growing popularity of pop-up shops. These sorts of businesses don't necessarily have the time, expertise or budget to create an expansive, involving website, but they don't necessarily need to include as much detail as the bigger brands do either. A simple, engaging landing page for customers that gives them the basics of products, offers and where to find the store does the job. Ad Dynamo Local Beta provides a free website and free ad design for any advertiser that needs it.
British consumer habits have changed. Recent figures from the OECD revealed that Britain is now the largest online shopping nation in the world. That means that if Britain is serious about reviving its ailing highstreets it needs drive the local online community back into local stores -- and I believe the online ad industry should be playing its part in achieving this. By developing targeted ad systems to reach local communities in their online environment and helping highstreet businesses to inspire consumers to enter stores or take advantage of offers and sales we can contribute cash to highstreets over and above the £100,000 grants awarded to successful Portas' Pilots.
Sean Riley is CEO of Ad Dynamo