Local Roads: Spending Benchmarks Pave the Way for Small-Market Success

Local Roads: Spending Benchmarks Pave the Way for Small-Market Success

Large cosmopolitan designated market areas (DMAs) tend to be the apple of advertisers’ eye. But a recent Nielsen study found that courting mid-sized and smaller markets can yield big results.

The study used Nielsen Buyer Insights data to uncover consumer purchasing habits and transactions in the metered, Local People Meter (LPM) and diary markets—covering all 210 U.S. DMAs. The results offer local media marketers a map to find and reach their best consumers.

This is the first time comprehensive spending benchmarks have been determined for the local landscape. By measuring key advertising categories from retail to restaurants, the spending data covers more than $100 billion and more than one billion transactions per month and highlights the value that local consumers deliver.

While LPM market leaders follow the traditional larger-market-yields-higher-spend trajectory, the trends in the metered and small markets really raise retail eyebrows. For instance, in the metered markets, Cincinnati has outpaced higher-ranked DMAs in the grocery, department store and quick-service restaurant (QSR) categories in terms of total spending in 2013.

In the QSR category, the study offered benchmarks in the LPMs, metered and small markets, helping reveal a new look into the value of local markets’ spending power and providing TV stations with an amplified value proposition to advertisers.

Looking specifically at the Wichita-Hutchinson market, the study noted that although consumers make fewer QSR trips per year, the average shopper in that DMA actually spends more annually in this sector. In fact, QSR shoppers in Wichita-Hutchinson—the 67th ranked market—spent an average of $343 per year. That’s higher than both the U.S. and LPM averages. Better still, QSR shoppers in the Wichita-Hutchinson DMA outspent shoppers in much larger DMAs, such as San Francisco, Miami and New York, where average spending per shopper was $315, $312 and $236 per year, respectively.

The Line on Wichita

Wichita-Hutchinson’s QSR shoppers spend more annually than those in larger markets

Market Market Rank Average Trips per Buyer Average Yearly Spend per Buyer
Wichita-Hutchinson 67 30.8 $343
New York 1 22.2 $236
San Fran-Oakland-San Jose 6 28.7 $315
Miami-Ft. Lauderdale 16 30.2 $312
Source: Nielsen