The local element
Local advertisers have been slow to take advantage of this burgeoning trend because they tend to offer giveaways offline -- they typically feel they have very little means to capture data (e.g., leads) otherwise.
Rob Salerno, president of Online Promotions Group, a New York City-based, lead-generation online agency (core service offering is HollywoodPrize.com, a portal for online entertainment sweepstakes and brand promotion), says that it's true that before firms like his came along, it was very expensive to grab this data on a local level other than through traditional methods -- sign-in sheets, scratch cards/instant giveaways -- and most firms felt the internet had too broad of a reach.
"Anyone could opt-in from across the globe but local advertisers only wanted to target local consumers," says Salerno. "While that problem can never be truly solved online, you can now run online local promotions in which the URL is known to a targeted group of local entrants. Also, people don't read newspapers as much anymore and the attention span of a potential lead is less than five seconds -- promotions are the perfect attention grabbers especially if you have the right tactic, like the internet and mobile, at your side."
So what does this portend for local media companies? Evolve or become irrelevant, says Salerno.
"Why run a local ad and reach a subset of your local target audience when you can reach a larger subset of the same audience online and not substantially increase your costs?" asks Salerno. "Local media was never designed to reach people based on matching interests, motivations or demographics -- it was designed to reach people based on geography. Well now geography is becoming almost irrelevant."
For most, notes Borrell, it will force an adjustment in their product mixes and sales strategies in response to advertisers who are no longer interested in just buying home-page banners. For some, it's already opening new opportunities to exploit the internet to create new revenue streams.
To capitalize on these trends, local media companies must better leverage their knowledge of the local market. Martin says they need to realize that online is not an extension of print; it's not an analog way of thinking. Local advertisers, which tend to be small- to medium-sized enterprises, are also not always completely clear on how they can use promotional spending to their advantage.
"There is a perceived element of risk -- giving away something for less than you normally charge for it, which can be difficult to understand," says Martin. "But short term, you'll spend more on advertising than an online promotion so it raises an interesting conundrum."
Looking down the road
TV may eventually serve as an effective legacy medium for driving traffic to an online promotion but Enderle says this won't happen overnight. The transition from TV to online isn't instant and most of us have limited memories and attention spans.
"At some point you'll be able to link from the TV to the internet and the result, assuming folks do it, should make a big difference," says Enderle.
Public relations will also serve as a powerful ally for online promotions as PR firms are brand sensitive on behalf of their clients and seek to associate their clients' products/services with portals and technology.
"Without PR, online promotions will lack credibility and accessibility as very few media organizations currently believe our industry delivers business value; they rarely cover our stories," says Salerno.
Web 2.0 tools and services like MySpace, YouTube, Facebook and local counterparts in community portals will accelerate this trend as viral marketing and social networking are no longer luxuries -- they are necessities. People sell to people and the success of promotions, says Enderle, often happens via word of mouth -- social networks accelerate this.
"The best review you can get for an online promotion is from one friend to the next," says Salerno. "Sites like Twitter raise the bar even higher because they aggregate people's lives in real time. So since it can be challenging to qualify leads, by leveraging social networks, you're letting them do the pre-screening -- powerful stuff!"
A quote from the Borrell Associates report perhaps sums it up best:
"Advertising makes people want to buy. Promotions make them want to buy now."
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Neal Leavitt is president of Fallbrook, Calif.-based Leavitt Communications, an international marketing communications company.