Brands are increasingly turning away from Meta and Google in favour of Local Area Marketing efforts as a result of saturation on the platform, which has impacted business results and budget blowouts.
In a recently released report by TFM Digital, the independent agency examined the trends in targeting customers based on radius and how businesses have adapted their marketing approaches in response to digital advertising challenges.
Taylor Fielding, the author of the report and CEO of TFM, told Mediaweek that at the heart of this shift from brand is trust and results.
“Many of the marketers we spoke with had issues with transparency and results. Some had budget blowouts, while others had noticed a distinct drop in effectiveness of their ads.
“As part of the ‘Ditching Digital Skip Bins’ paper, we found that looking across the past couple of years for TFM Digital clients, CPMs have risen 10.31% on Facebook and Instagram.
“Meta’s reported cost per ad has increased 14% over the past 12 months alone, which I feel is down to the automated tech and the position of the platform in a lot of marketing mix models.”
He said that Google’s Pmax ads have continued to appear in questionable places on the internet and have raised concerns about brand safety and how the efficiency of getting ads out there has overridden the effectiveness of targeting.
“When all rely on the same platforms, with the replica personas, differentiation becomes a distant hope; in essence all of our efforts become a darker shade of AI,” he added.
The impact of automation and oversaturated platforms
Meta’s cost per ad across its platforms rose 14% year-over-year, which resulted in 90% of small and medium-sized businesses dealing with CPMs that are 10.31% higher than two years ago, according to Statista and TFM’s report.
Fielding noted the enshittification, or decline of online products and services decline in quality over time as a result of the shift in focus from attracting users and providing services to making businesses and monetising user base.
He said the resulting “drop in quality of experience and results for local area marketers has been paired with a rise in price for diminishing returns.”
Facebook has reached a saturation point and is no longer delivering the results marketers expect as business owners no longer get what they need. To this end, an “overreliance on automation” is being blamed.
Fielding noted the “platform has become saturated” and noted that one CMO said that they no longer use Meta because they we no longer seeing results, while others spoken about budgets breaking the bank without warning because of mismanagement on the back-end.
“Automated audience tools allow you to pull together something quickly. But when everyone, including your competitors, have access to the same sandbox, you’re going to end up with similar results with declining outcomes. Effectiveness was an issue which came up repeatedly,” he said.
How businesses account for nuances in marketing approaches
TFM’s report noted that businesses such as Telstra and Price Attack have adapted their marketing approaches in response to digital marketing challenges.
Aimee Madson, Price Attack’s CMO, said: “We had an experience on one channel, where our costs tripled and our results weren’t there. Times are tough. Retail is tough. So we have looked elsewhere – we can’t afford to waste money on a platform that doesn’t seem consistent anymore.”
Telstra’s senior marketing specialist, Anjela Gilbert said: “Our aim is always to hyper-target local areas to drive traffic into stores. We’re more than happy for them to educate people online, but we know that customers are more likely to purchase in-store. So that’s the job of our LAM. Drive traffic to where we can best convert.”
Feilding said understanding local area should be the primary concern when considering marketing efforts.
“That means accounting for nuances in a local area. Using hyper-local messaging which resonates. The same message won’t feel as personalised in Ballarat when it was designed for Toowoomba.
“Continual evaluation of your marketing mix to ensure you’re delivering against your objectives will help keep you on track.”
He also highlighted the importance of understanding the role of LAM for a brand.
“For the likes of Telstra, we’ve heard that it’s about getting people in store where they’re more likely to convert. For both of those brands, we know that community engagement is super important – making sure that the local store feels representative of the local community.
“The way that engagement best takes place will vary depending on regional and community nuances.
Making the shift to LAM
For marketers looking to make a shift in local area marketing that is effective, Fielding highlighted the importance of having a solid understanding of the target audience, with the relevant data and insights about them, along with having a strategy works smarter to reach that audience.
“Some of our most successful campaigns have had an insight at the core which we’re then able to build a strategy around (e.g. consumers are more likely to click an ad about massage than a generic wellness one).
“Getting the basics right across your marketing mix will help deliver against your objectives. This starts with hygiene-level stuff around audiences and segmentation.”
He also suggested that marketers should look into improving mental availability within the intended audience and discerning how best to stand out in your category on a given channel is paramount.
“We have found that digital OOH, mobile-targeted digital audio and even SMS have been very successful for clients looking to get customers in-store.”