The major relationship that most local marketers have with media is via their advertising buys. Advertising remains critical to the marketing equation, from national network buys for car makers to circular buys for retailers.
But media companies need to stay atop shifts in marketing patterns. BIA/Kelsey, in our ongoing research into SMB behavior, has been tracking significant new pay for performance marketing trends, including the rise of promotions, including loyalty and rewards programs; the ability to make ‘smart’ and more relevant recommendations based on purchase histories; and the switch to location-sensitive, eWallet-capable smart phones by the majority of U.S. consumers.
Indeed, we envision a time in which non-advertising solutions, such as online promotions, will actually gain parity with online advertising.
Groupon’s emergence in 2007-2008 demonstrated the power of prepaid promotions in the acquisition of new customers. Ultimately, Groupon’s daily deals model doesn’t appear to be sustainable in itself — the heavy discounting and commissions required in the deals model makes it only beneficial in certain cases. But it clearly showed that marketers can have a major impact if they focus on targeting new customers and keeping their existing customers via new commission-driven promotions rather than advertising.
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