Neighborhood Watch: Eyeing The Rise of Local Marketing Spend

Originally posted on MediaPost

Most marketers agree local marketing works because it’s relevant. If you ask why it resonates, we’d probably point to something cultural — a message aligning with community values and priorities. When it comes to consumer choice, changing economic conditions region-to-region matter just as much.

Consumer spending rose 4.2% last quarter, while the GDP held at a sturdy 2.4% for the year.  The economy isn’t bad, but the U.S. is a patchwork of economic realities. From market to market, not only does competition for share of wallet fluctuate, the size of the wallet also changes.

National brands, state-level nuances

Many brands see a California-sized anomaly in their data, caused by anything from environmental policy to data privacy.  But do state lines matter everywhere?   Job titles and type don’t mean the same thing in every state. Minimum wage laws affect businesses, but also consumer spending power.

Anticipating future spend is even harder. Economic and regulatory changes can have diverse impacts across different regions. Federal initiatives like economic development grants or tariffs can have minimal impact nationally and dramatic ripple effect at a local level—affecting anything from job markets to consumer prices.

Spending indicators come from more than household income data

Most marketers look at general wealth and spend markers in a region. Average income is just one piece of a puzzle connecting the demographic composition of an area to its spending power. National consumer confidence is steady, though it dipped a bit in January, falling 5.4 points to 104.1.  However, a closer look shows people over 55 felt better about their short-term economic outlook in January; it was the under-55 cohort that led the decrease.

Age and gender divides on sentiment and spending ability, change.  Wall Street Journal explored how more boomer women are having the final word on their family’s finances. Women over 60 are coming into more wealth, faster, than ever before.  Women overall’s wealth has grown 80% since 2018, outpacing the total growth in wealth of 62%.

Marketing dollars are shifting to local in 2025

Marketers are increasing their local marketing budgets for 2025, often doubling down from last year. According to one recent study, 83% of advertisers think that local advertising is attributable to more than 20% of their revenue. And consumers in front of a TV agree somewhat. 72% of streaming and broadcast viewers of local ads say they want to learn more about an advertiser than if they saw only national ads.

We might not know all the ways new tariffs will ripple down into local industries, but if we don’t have a fundamental understanding of how a state, region, or DMA reacts to our brand now, it will be harder to adapt.