Local advertising has historically made up a large part of advertising spend and budgets. In fact, in many countries, local ads – which normally include flyers and door-to-door newspapers or brochures – make up anywhere from 20-60% of the advertising budget. For example, in Germany, many firms still spend the large percentage of advertising budgets on paper flyers – sometimes for door-to-door flyering and sometimes for papering parking lots. Historically, that’s also provided some return – although how much is difficult to track. Unlike digital advertising which allow clear traceability and linking footfall to ad clicks. At the same time, many retailers still rely on local advertising to drive traffic. However, with recent shifts in paper costs, general acceptance of door-to-door advertising, and increased environmental concerns, paper brochures and flyers are increasingly unpopular.
In most of Europe, the popularity of door-to-door advertising, including brochures, local magazines, and flyers is in decline. In the Netherlands, that’s exemplified by the fact that cities like Utrecht and Amsterdam now require households to opt into door-to-door advertising. This means that unless someone puts a sticker on their mailbox (Yes to local newspapers/yes to flyers), these marketing materials can’t be delivered to that address.
That shift happened in 2019, following an experimental run in Amsterdam. Now, more people in the Netherlands are opted out than opted in. And, that’s partially because it’s easy to just not do anything. That means that local advertising is reaching fewer people than ever before.
Of course, it doesn’t delegitimize door-to-door marketing. After all, if people have to opt in, the people receiving flyers and brochures have opted in. That essentially qualifies them as being interested and significantly more likely to actually look at ads rather than throwing them in the bin. So, for many, paper ads are still important.
At the same time, local flyers and brochures are under attack from a different direction. In 2021, the cost of paper rose by over 40%, for some paper types even up to 70%. That tracks to wood pulp shortages, the global supply problem, and resulting manufacturing issues. In fact, even packaging costs are up over 20% in most industries – and flyers and brochures cost significantly more to print. That supply shortage has also impacted energy, transport, and chemical costs – which do go on to affect the final cost of print. Those cost increases track to anywhere from 50-150 euro per tonne over existing surcharges for uncoated paper. And, in September 2021, numerous paper suppliers were sold out till the end of the year. That shortage is going to continue into 2022 – resulting in higher and more unpredictable costs, alongside less stable paper supply.
The current trend is to reduce paper waste and garbage and switching away from paper-based advertising achieves that. It benefits the environment. And, with increased costs and a reduced audience – it removes some of the uncertainty of local marketing. But, local marketing still drives a significant portion of sales for many organizations. Most organizations have known for some time that they’ll have to digitize their local advertising efforts – not just for the environment, but also for the traceability and data that come with programmatic – but the pandemic and increased paper prices have accelerated that process.
And, that’s where Adcombi’s hyperlocal digital advertising technology comes in. We use polygon targeting to target zip codes alongside traditional radius targeting to share digital ads to consumers in specific geographical locations. That makes it easy for dealerships and grocery stores with zip-code bound advertising to stick to their regions. These ads are served programmatically via the DSP, localized and customized per local branch (even for national ads), and offer interactive information like routes, weather, and traffic – to give the customer the best possible experience. And, for some of our customers, like a major beer producer in the Netherlands, hyperlocal digital ads saw a return of 200%.
Eventually, advertising is moving towards digital. Local advertising isn’t all the way there, but with trends towards increases in cost and reduced interest in paper door-to-door, it’s becoming more and more important to at least begin digitizing your local ads. And, when you do, you’ll see the benefits of data to link your local advertising into your overarching omnichannel advertising strategy.