Leading Local Insights
Leading Local Insights
Engaging Consumers: Valpak CSO Jay Loeffler on Data-Driven Local Advertising Strategies During Economic Challenges
"Even with economic uncertainty, there is an opportunity to step up as leaders in our respective industries to guide our advertising partners with critical information to maximize spend and help them win at a critical time." Jay Loeffler, Chief Sales Officer, Valpak
In this timely podcast, Jay Loeffler, CSO at Valpak, discusses the challenges local businesses face due to tariffs, inflation, and rising costs with BIA's Managing Director, Rick Ducey.
During their conversation, Jay provides insights from Valpak's 2025 Local Business Economic Outlook Survey, which measures the impact of macroeconomic uncertainties on businesses and how they are adapting.
One of the key takeaways is that businesses are not merely raising prices in response to inflation; they are reimagining their value propositions, exploring new channels, and utilizing data in innovative ways. This shift creates significant opportunities for media.
Jay explains that small businesses are increasingly leveraging data insights not just for marketing, but also for broader operational strategies, such as choosing new locations and optimizing inventory. This trend is supported by findings indicating that 61% of small business owners expect revenue growth, and 78% plan to increase their marketing efforts.
Jay emphasized that direct mail can achieve a 93% open rate when paired with digital touchpoints. Valpak has built a comprehensive stack containing billions of household attributes. Using this data, Valpak is tailoring multi-touch engagements through TV, radio, mail, and streaming to allow businesses to connect with consumers when and where they prefer to be reached. Valpak is currently partnering with companies like Paramount, Disney, and iHeart to improve reach.
This podcast offers enlightening insights around navigating today's local media landscape. Plus, for the full Economic Survey, visit Valpak.com/bia.
Hello and welcome to BIA Advisory Services' Leading Local Insights Podcast. My name is Rick Ducey. I'm the Managing Director here at BIA Advisory Services. Today I'm fortunate to speak with Jay Loeffler from Valpak to discuss the direction of the local advertising economy in the second half of this year has provided us with valuable insights, shall we say, into the stress points induced by policy changes in the local business and advertising sectors, among every other sector. Basically, we've also seen both the intended and unintended consequences of these policy decisions and ramifications flowing from them occurring at a pace and a scale that likely have not been experienced before. We always like to say this is the first time we've faced these circumstances. It's the worst ever, but it is a confusing time. I think you won't find any argument with that. So, Jay, welcome back to BIA's podcast.
Rick Ducey:I really enjoyed the insights and data you shared with us in our audience last fall. Much of what you and Nicole at the time had anticipated hasn't come to pass because we've been busy doing other things with the world. That kind of changed the whole environment and it's led to some confusion and some questioning as to who's thinking what and who might do what. But we have some good insights there thanks to some of the work you've been doing with your team at Valpak. Valpak, we're facing a landscape shaped by rapidly changing trends in the local advertising industry the shifting macroeconomic policies that are affecting businesses of all sizes. So our discussion, I think, is very well timed, since you have just released a survey looking at these exact issues from the perspective of local businesses and their marketing plans.
Rick Ducey:The report title is Valpak 2025 Local Business Economic Outlook Report. I mean, who does not want to read that? So we'll get a nice preview with this today. The study provides valuable insights into the thoughts of advertisers and the effects of the current environment on their spending decisions. So, Jay, I believe that most people in America are familiar with the Valpak brand. You've played a key role in the development and evolution and success of the company, having been with the company for over 18 years and now you're serving as the sales officer, no easy position. But it's clear to me that you're one of the most respected experts in the field, not only in direct mail, but in local media channels and local marketing as a whole. So, Jay, thank you so much for coming back to join us, and I'm really looking forward to our conversation here. Please hello to our audience.
Jay Loeffler:Thank you so much for the fantastic introduction, Rick. It's truly a pleasure to be here today.
Rick Ducey:That's wonderful. So for our audience, you will get to know Jay very well over the course of the next several minutes, while we cover some really important questions, I think if you don't know Jay. So this survey I mentioned Jay, let's start with a little bit of a background. Clearly, people don't know what's going on and even if you do today, it changes tomorrow, somewhere between the administration, the court system, whatever Wall Street thinks it's going to do next and businesses trying to operate, figuring out what the loans are going to look like, what customer purchasing behavior and psychology is going to do next. And, you know, businesses trying to operate, figure out what the loans are going to look like, what customer purchasing behavior and psychology is going to look like. There's so much going on, so it's like awesome that you guys have done this survey. Let's frame that a bit. What is this survey trying to address and how did you go about doing it?
Jay Loeffler:Sure, absolutely so. The purpose of the survey was to measure the impact of macro uncertainty due to tariff implications, inflation, higher costs on local businesses and, more importantly, how they're adapting and planning for these changes. So most of our respondents were small business owners fewer than 20 employees and less than a million in annual revenue, across a variety of industries from retail to home services.
Rick Ducey:And that's. I think people may know this, but just to drive the point home, that really is the economic foundation of American business. I mean, these businesses are a huge part of the overall economy.
Jay Loeffler:Yeah, I'd like to say Valpak has its finger on the pulse of local economy. We have about 65,000 advertisers combined across our entire footprint, across over 120 markets. So being able to interact locally with these businesses and hear from them directly really gives us kind of a good indication of where things are headed.
Rick Ducey:So, now that we've got the foundation of the survey why you did it, what you're trying to find out and we'll get into the findings in a moment let me offer some BIA data to kind of frame this a little bit. We're forecasting that this year, 2025, about just under 21% of the just over $171 billion and that's been targeting local audiences by these businesses and really all businesses but about 21 21 will be allocated to direct mail squarely in valpac space and I know you guys do other stuff as well as direct mail. We'll learn more about that so that's about 35 and a half billion dollars on that industry, um, up almost a billion from 2024. So, with all the challenges going on, we're still seeing growth and historically, the direct mail part of the media channel mix in local advertising has always been number one. From time to time, mobile advertising local mobile advertising will kind of peek its head above the line and take first place and we're showing that for 2025, that mobile will be a bit above direct mail. But clearly direct mail is foundational in local businesses' marketing mix. So that's really interesting.
Rick Ducey:In the survey of your recent businesses, one of the things you ask is okay, how do you guys go to market in terms of advertising and what media channels do you use? And 44% of the businesses use or have used direct mail and about 57% have or are using mobile. So that kind of syncs up with our estimate of spending that mobile maybe peaked a bit ahead, at least for 2025. Do you see and these aren't mutually exclusive, of course I mean so when I think of Valpak and I get my friendly Valpak mailer and you know, open it up and see what's inside. So, like Valpak has a certain identity with me. But from a business perspective, these days, you know, particularly businesses have learned you have to be multi-platform and have a campaign that goes across multiple channels. That's something that you at Val pak are certainly aware of and facilitate that. So, the two biggest local media channels direct mail and mobile. How does that work? What did you find from your survey or just in your direct experience working with Valpak and your client base?
Jay Loeffler:Yeah, it's a fantastic question and we recommend a multi-touch engagement and the goal should be to connect with the consumer when and where they want to be reached With direct mail. There's been a resurgence in the relevance of the mailbox since COVID as more customers are ordering packages delivered to their home. I know I get at least four Amazon deliveries a day. That tangible touchpoint is a critical step in the shopper journey and it reinforces other media tactics that extend the conversation and deliver action. So pairing direct mail with mobile display further increases brand recall and engagement.
Jay Loeffler:So one key differentiator in our approach is our use of our data stack, which has over a billion different data attributes on all US households. We use this data to not only power our direct mail but we target impressions in display and mobile geofenced environments. We could target IP level. We could target residential addresses using similar data attributes to our direct mail program. So we eliminate waste and we create a halo effect of known Valpak households receiving an impression on their desired device. This approach it helps us achieve about a five to eight time industry average consumer action rate.
Jay Loeffler:So one example of this approach to give a blinded example here, as a paving company in the Midwest we leveraged a custom lookalike model using life stage, lifestyle, demographic and psychographic attributes to target the best homes in our direct mail product. Then we overlaid a display campaign with retargeting. What made this unique is not only that we use the same lookalike model in print as we did in display, but we ensured we were only targeting homeowners with residential targeting within their serviceable areas. So the combined impact of direct mail and display decreased their cost per lead, increased their return on ad spend and drove more than an eight-time consumer action rate than their previous digital provider.
Rick Ducey:That's pretty amazing, and I was going to ask you. You talked about engagement and performance. I was going to ask you you know how do you see that? So you answered that, and those metrics are really impressive. I do wonder, though I mean for these businesses. A lot of these businesses are fairly small businesses, and what you just described is incredibly powerful and drives results clearly, and what you just described is incredibly powerful and drives results clearly, but does that require a level of sophistication that businesses don't have, or do you help them out with that?
Jay Loeffler:So that's the greatest part is we made it super easy. So we actually call the digital element our Advantage Connect program and we handle everything soup to nuts turnkey from data targeting On the print side. We handle print postage and distribution On the digital side. We have an expert team here that finds the best targeting based on our 50 years of categorical insights, offer data, what we've seen in real-time response for those particular verticals. So we essentially prepackage everything and give the insights and guidance to say this is the best solution.
Jay Loeffler:This is what you shouldn't do. We want to advise what not to do as much as what to do. These are the typical offers that work best in your space and this is how digital works best with direct mail and they're not always the same thing. So when we put that together in a good, better, best type scenario, we really take the burden of having to understand a lot of the product intricacies off the advertiser and allow them to do what they do best nail salon, making pizza and we become their advertising essentially advisor. So it's a really great, powerful tool that we were able to create.
Rick Ducey:That sounds like great synergy. You know complementarity. They do what they do best and they get to leverage what you bring as they're trying to get to market, to drive the top of the funnel as well as retargeting and keeping people already in their customer base coming back for more. So that's all excellent. Now you mentioned digital. I talked a little bit about mobile. The kind of flashy news these days is connected TV and CTV. There's so many different acronyms in there.
Jay Loeffler:CTV OTT FAST.
Rick Ducey:AVOD, SBOD, Hybrid AVOD, EIEIO, DTC. So without getting into necessarily all the nuances, but the nuances are important. You at Valpak, you know, see that media channel CTV is important and how do you bring that into the mix for your clients? How do you decide when to do it and how do you do it?
Jay Loeffler:Yes, I mean, I wouldn't necessarily say it's a brave endeavor, it's more so necessary. We want to provide all of the tools for local businesses to give them where the consumer wants to be reached. So CTV is one, because more consumers are cutting the cord. Ctv ads are growing and traditional TV ads can't. They're delivering non-skippable, immersive content that reaches a broad audience of potential consumers. So we approach CTV with a unique data proposition that leverages our first party data and really what's unique to us, we have 400 local sales reps that have local knowledge of the account of the market across the country. So we leverage that expertise and we combine that with real-time reporting and constant optimization. So, again, it's our industry-leading data set and our people that really allow us to be very competitive in the space. And it's all about driving optimal results and having Valpak really be the advertising agency that advises on all of the tools reaching the right consumers, whether it's direct mail, ctv, digital. We want to become a full service solution for all of our local partners.
Rick Ducey:Yeah, it's. I mean we at BIA tracks 16 or 17 different media channels and the spending across those and we forecast that out historically for comparative purposes.
Rick Ducey:There's a lot going on in the local marketplace and for small medium businesses that don't have the internal resources to figure it all out and be smart about it, especially since so much now is data-driven and optimization around KPIs and performance metrics. The kinds of things you're describing must be highly valued by your customer base. I'm sure you have a high retention rate and a high satisfaction rate. I guess, drifting up a bit if you will, to I don't know what level 20,000 feet or 30,000 feet so we're talking about a specific part of business. Level 20,000 feet or 30,000 feet? So we're talking about a specific part of business.
Rick Ducey:But in your survey you also asked some of the macro questions like OK, business leader, what are you thinking about in terms of inflation, rising costs, margins, supply chain, your consumer psychology? Are they going to buy, are they going to hold off? There was a lot of probably uplift in buying and selling in the first quarter, maybe even the first half, because people expected tariffs and trade policies to really take effect in the second half for sure. So was buying accelerated into the first half and the second half is going to be slower. Or is it going to be tariffs on today and then the courts say tariffs off tomorrow? There's so much on these business leaders' minds and you explored that in the survey.
Jay Loeffler:What kind of things did you take away from those sets of questions in the survey, yeah, so one point I want to make to our previous conversation, which I think leads in here. You know, one thing that we really have tried to expand as a company is not only giving the tools for all the different media touch points, but we've been building really robust tracking and attribution capabilities. So in direct mail, the use of QR codes and call tracking numbers, setting up test verse control, using data to make sure we're driving sales lift. In the digital channels, we have a program called Advisor that we launch, which is an emerging self-provision tool that allows you to track real-time click-through rates and performance. So we feel it is important to be transparent and show the attribution of how we deliver, as much as it is to recommend the media strategies themselves, and I think that really fits with where we're going here. So some of the insights we've seen.
Jay Loeffler:The biggest takeaway is that there's real concern surrounding rising costs, growth expansion, cash flow, but it's not all doom and gloom. I think 44 percent from what we found from the survey have a positive view of the economy. So not the, you know, not less than the baseline there, it's 44 percent, but 61 percent feel confident that revenue will increase over the next year. So as the tariff seesaw goes back and forth, it's creating short term anxiety, but growth is expected in the next year and 55 percent of businesses say they will expand their operations and 78% say marketing is more important than ever and attracting new customers is the number one priority. So all of us in media it's a great opportunity to help use our expertise and guide best offers, value proposition tracking to make sure that we're maximizing best use of that spend. And that comes with the upfront targeting the right solution at the right time. And then, as I previously mentioned, all the tracking tools to make sure they have complete visibility for how all their dollars are working for them.
Rick Ducey:And all their dollars working for them. Let me pick up on that a bit. I guess it's sort of typical to see businesses allocate a certain amount of gross revenue or net revenue or gross sales or something to marketing. And you know a fair amount of that marketing budget would go to paid media advertising, the kind of things we're talking about, and there's some back and forth in this, but I think generally the research and kind of experiences, ooh, in a down time you still want to advertise, you know. So if your sales are down, you still want to keep your ad spend up to keep your competitive position, keep the you know brand awareness, brand equity in the market. So when things do circle around which they do, that's the business cycle you'll still be at the front and in fact some argue in a down market you should probably advertise more, you know, because you're going to maybe have a competitive advantage to get some mindshare, if you will, from your competitor. But still, you've got to run a business and you explored that in the survey also.
Rick Ducey:We've seen some examples of OK, well, we're going to have to raise prices, but we're going to show it. Here's what you paid for X last week and it's going to be X plus 10%, and that 10% is because of tariffs. But some people in government don't like to, don't like to see that and some some of the businesses are saying well, you know what, you know our costs may increase, but we have a loyal customer base. We're going to eat some of the profit margin here. You know we don't expect this to last long. So rather than, you know, jump up and down with pricing, we're going to try to absorb some of this price increase and take a hit on margin and hope, like you're saying, these 44% of businesses at least see growth and so maybe we'll take a bit of a hit on margin, but maybe we'll actually grow and increase top line revenue by bringing in new customers with a more advantageous pricing strategy than our competitors, since we're holding our pricing steady and eating in our margin unless we're able to grow total unisole with new customers or even with existing customers.
Rick Ducey:In the economics of how to run a business, you had several questions in there. What kind of insights did you get from the answers to those sets of questions?
Jay Loeffler:Well, I guess the simple answer is there's no one-size-fits-all magic bullet solution. It differs by vertical, by geography, by seasonality, but sometimes the short answer is to raise prices. But actually our survey indicated a few other things that are pretty interesting. One, the emergence of AI, and it's really reinvigorated the conversation about the use of technology to cut costs and drive efficiencies, which can help save some money to not have to pass on to the consumer. And for a local business owner, their business is more than a pastime, like we mentioned before. It's a passion, a livelihood, and they'll do whatever it takes to really deter economic headwinds. So three of the top data points in the survey of how businesses will approach these challenges in a new environment is to incentivize or newer, different way. So interesting. You know, when money was cheaper, when interest rates were down, there were a lot more for HVAC. Let's take as an example offers to replace your HVAC. Now it's more offers to service your HVAC.
Jay Loeffler:So you're still using the tools, but you're changing the offer and the value proposition. So that's a really interesting way. Another thing is to try new marketing channels. You know Google SEM has been the tried and true method for a while, but in their recent report they've seen in the first time in their history, you know, click through rates go down a little bit and they're becoming more expensive.
Jay Loeffler:So local businesses are trying new advertising channels that they've never tried before and this is a good time to experiment, to see if there's something else out there that could work. And then some even said they would lower price points, which I thought was interesting, because if you really think about it from a game theory perspective, I mean it could be a great time to shift market share if the expectation is that the tariff concern will be a one-time pricing event, transitory, or that inflation will normalize at some point. If you lower price points and give consumers a lifeline during a time when they need it most, that can create real customer loyalty. So not saying it's for every business, but some businesses are indicating that could be a strategy as well.
Rick Ducey:That makes sense, and I'd be kind of curious to see the different strategies of the different business sectors. But yeah, I've definitely seen that. You know, instead of promoting the thing, it's servicing the thing because people need that and that's. You know so, and that's a need that's persistent. If the refrigerator doesn't work, it doesn't work, you know. So I'd like to see if I get a service before I have to buy a new one. And you had mentioned businesses are.
Rick Ducey:This may be a time where they're open to different ways of thinking about things, and the services that you outlined, that you bring to your clients, are amazing and taking away a lot of the complexity and even learning. All the services that you make available probably is somewhat complex, even for the businesses that you know. They probably just say, well, okay, yes, I'm glad you're doing this for me. So you know, Valpak is Valpak, Everybody knows it. We talked earlier about the digital channels, mobile and some of the other things that go on there. Are the businesses that you work with more open to digital now, and you kind of outlined all the data strategies. Anything else to cover in that space?
Jay Loeffler:It seems interesting, yeah, so I mean I like to say we like to optimize campaigns based on the best ways to connect with consumers. I mean, obviously, our pedigree has been a direct mail company. We understand the emergence of digital and CTV and other channels, but our approach and what truly differentiates us is our data. So what we build is a data engine. It's called MyBlueInsights and we leverage a data stack to build it. It's a series of first-party data, offer insights and billions of other attributes on the household. I mean we can track an entire new mover journey, from when the time A4 sale sign goes in the yard all the way through the next home they move to.
Jay Loeffler:A lot of other new mover programs are based on national change of address, which, according to certain data points, only 60 percent of people actually file a national change of address in enough of a period of time that would make sense to advertise to them. So we retract home values. We have credit score modeling, net worth. We could even look and see if a driveway is gravel or paved. We can get that granular.
Jay Loeffler:So what we like to do is we combine these insights with our partner's CRM data. We could build very sophisticated models that guide spend across all media channels, not just print and digital. Our goal is to help them optimize their insights for spend, even if it's not with us. We want to become their data partner that drives what makes sense. So, whether it's digital, traditional, opening a new market, determining where to staff techs, we provide resources to our partners to drive their best outcomes for their business need. I was working with a CMO who's become a good friend of mine and when we had lunch one time he says I have 192 vendors, but I trust data from three partners Google, facebook and Valpak.
Rick Ducey:And when I heard that, I was like okay, we're onto something here, lunch is on me. That's excellent and not surprising, I'll have to say, given all the cool things that you're doing. So you mentioned partnerships and another type of partnership that you work with media partnerships publishers. You know other big brands like Paramount, disney, warner Brothers and some kind of niche brands like the Tennis Channel. How do you work with these media companies?
Jay Loeffler:Yeah, it's a great question. We love our media partners, the great consumer engagement partners. They help us stay relevant with consumers. We help them drive listenership, viewership, so brand that advertise about back they get on. You know, unparalleled reach, precise targeting formats that engage with. You know our consumers? I mean we have built and maintained a 90 open rate for many years. I think last survey was 93%, with 85% saying they open and look through every offer. So iHeart, for example, has been a tremendous partner for years and this summer actually, we're leveraging our data to drive listenership for both their terrestrial and streaming channels, aligning artists that appeal most to genre, guided by our insights. So, for example, we'll feature Luke Combe for our country lovers and Kendrick Lamar to our hip hop enthusiasts. So we customize campaign for these partners based on their distinct need, whether it's TV, radio or streaming subscriptions. And we're actually working with iHeart right now in a holiday program that's gonna come together for December to support local advertisers. So more to come on that exciting partnership in the next few weeks here.
Rick Ducey:Well, that's good. I'm definitely going to look forward to that. And yeah, it's interesting, it's June already, wow. And yeah, it makes perfect sense to be thinking about the holiday season, but where does the year go? I don't know. It's right on to be thinking about that now. Ok, so I'm inspired by your survey. The results. Some of them are intriguing. You know. Some are like, yeah, that makes sense, and some are, wow, okay, that's didn't know. So it was really useful survey. And you know I'm sure you're going to be sharing that survey. We'll come back and talk to that. But so now I'm inspired to do my own survey and my target population is one person.
Rick Ducey:I'm going to ask Jay Loeffler so 2025,? You know we're looking at the second half. We're looking at the happy space of the holiday season, hopefully. You know there's so much frustrating things going on, uncertain things going on. People are anxious, you know, the information that they need to respond to from a business perspective, let alone in our personal lives. You lives changes literally on a daily basis, but somewhere in there there's happiness. So let me ask you what about this year from the context of business, local advertising and marketing and so on, and you've already shared some things from your survey and some of the other insights you've spoken to, but what are some of the happy spaces that you expect we'll have before the year's out?
Jay Loeffler:Yeah, I mean, if I can look and extract everything I'm hearing from talking to local advertisers to national advertisers the survey I think the thing that's most exciting for me and for local business is that six out of 10 business owners they still expect their revenue and profitability to increase over the next year and more than three-fourths plan to increase spend to attract new customers.
Jay Loeffler:So as I think about why this might be, I mean unfortunately, to some degree I think that business owners have become more accustomed to uncertainty and the psychology behind. We've just went through COVID. We've seen a presidential change, we've had a lot of change in policy, but we've seen that we keep on rebounding as a society and we keep on spending and we keep on growing. So I think the not being reactive and pulling back, but just embracing the change and using different tools to adapt with it is really the key learning here. So, even with uncertainty, there's an opportunity for us to step up as leaders in the media industry to guide our advertising partners with critical information, not only about their advertising, but what's happening in your local economy, what's happening in your competition? How are national partners coming in to impact your local space? What do you need to do to stay competitive and keep customers coming in. That's the type of advisement that our local partners need across the country, and if we can continue doing that, I think we can help them really win at a critical time.
Rick Ducey:I agree, and it's you know, there are challenging times, there are less challenging times. There's always something going on and you know, if you look at the history of business and society, I guess you know we have bad moments but we kind of figure it out and move on. And your answer, I think, speaks that very, very powerfully. And it's at moments like this I recall a scene from the original Jurassic Park with Jeff Goldblum and it's like you know we can stop this. These dinosaurs won't reproduce. We have the fix for it. And his answer was nature always finds a way. And so it's like, no matter what challenges or roadblocks you throw at these businesses to try to, you know it's like discourage them out of business, they're going to find businesses to try to. You know it's like discourage them out of business, they're going to find a way. And you know that's exactly what you said and I believe it. Anything else, this has been wonderful. Thank you for coming back to join us and I know our audience enjoys you. I do Any other final thoughts.
Jay Loeffler:No, this has been absolutely wonderful and we look forward to continuing kind of to educate on our data message and all the new tools that we have. And I think, if I can, I always talk to advertisers and I say if I can give you one thing, it's that Valpak is not just a direct mail company anymore. We really want to be a partner in multiple different facets, but it's really the data that separates us. And for all the listeners out there, I just want to let them know that the survey will be available after this podcast is released here at Valpak. com/ BIA, and you can access all of the economic data that we talked about here on this podcast.
Rick Ducey:I definitely encourage people to check that out. It's a fantastic resource. Jay, thank you so much for being here today and sharing your data, thoughts, insights and, well, optimism. You know we can use some of that. We always appreciate and value your time with us, and congratulations to you and your company for the success and the valuable services you're bringing to the marketplace. Good luck in the second half of the year and hopefully you make the holidays happier for all of your clients and their customers and for everyone listening out there. Thank you for joining us as well. We do this for you. We hope we give you good information and maybe a little entertainment on the side. We look forward to bringing more insightful conversations on local media and advertising throughout the year ahead. Thanks everybody, have a great day.
Jay Loeffler:Take care, thank you.