LiveTechnology categorizes local businesses into three basic types of marketing structures:

1. Branded Branches: 60 - 65%

• Largest segment
• Target LiveAdMaker customer
• Most of current customer base and short-term sales targets

2. Co-operative Sellers: 30 - 35%

• Second largest segment
• Target LiveAdMaker customer and source of future growth

3. Independents: 1.5 - 2.0%

• Smallest segment
• Not a target LiveAdMaker customer
• Prospect for future business model expansion

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1. Branded Branches
The largest percentage of local marketing expenditure (estimated 60-65%) is performed by branded branches - any business operating under the controls of a brand and marketing the products of a brand. The table below illustrates the different types as well as examples of each category.

Type	Examples
Local stores of retail corporations	Home Depot store in Port Chester, NY Office Depot store in Palm Beach, FL Wal-mart store in Greenville, NC Best Buy store in Atlanta, GA
Franchisees of franchisors	McDonald's restaurant in Grand Junction, CO Subway restaurant in Marshall, TX Chrysler Dealership in Dover, DE
Agents of a larger corporation	Century 21 real estate agent in Phoenix, AZ AllState agent in Nacagdoches, TX Edward Jones financial advisor in Deerfield, IL
Owned and operated branches of service businesses	Bank of America branch in St. Louis, MO Cingular direct sales office in Trenton, NJ Charles Schwab investment center in Austin, TX
Service operators or representatives	Roto Rooter Plumber in Macon, GA Weatherguard installer in Middletown, OH Teleflorist location in Lufkin, TX
Regional Marketing Departments	Dell's Southwest Region Marketing Division AARP's Wisconsin branch United States Air Force Texas Recruitment Division Sprint Nextel's Northeast Region Marketing Division
Associations or Marketing Groups	Chrysler Tri-State Dealer Advertising Association McDonald's Manhattan Marketing Co-op Austin Red Cross Society

Branded branches are part of a brand which guarantees business through the association of the brand. These branded branches account for about 60-65% of local and regional advertising because they are required to spend a predefined portion of their revenue on advertising. A portion or all of this spending may be subsidized by the brand - for example Cingular spending a portion of its national advertising budget on localized newspaper advertising. Branded branch marketing involves utilizing brand components (campaigns, product imagery, recommended copy) from a head office, and tailoring materials with local offers and selecting relevant messages. Typically branded branch marketing has complex procedures involving the required tie-in of legal to local offers, local customization and brand elements.

2. Co-operative Sellers
Co-operative sellers are any local business operating independently while selling branded goods. Co-operative sellers receive co-op marketing funds from these brands to support their local marketing, and represent 30-35% of local marketing expenditure. Examples include:

Type	Examples
Brokers selling competitive branded products	A Chicago, IL insurance broker selling both AIG and Chubb insurance products
Value-add Resellers	A New York, NY based Microsoft Certified Partners providing systems integration of Microsoft products
Retailers selling competitive branded products	An Elizabeth, NC based wireless store selling Cingular, Verizon, Sprint & T-mobile phones a Longview, TX electronics store selling Sony and Samsung products
Retail locations selling a variety of branded products	a deli in Minneapolis, MN selling Pepsi and Coca-cola beverages, Boar's Head meats, and Frito-Lay snacks

Co-operative marketing is often even more complex than branded branch marketing, as in addition to utilizing brand components with local offers and local messages, there are even stricter legal approvals required for the local marketing, and there is an additional requirement of funds management for a partial or whole subsidization of the marketing by brands based on meeting specific criteria such as brand compliance or sales levels.

3. Independents

• A local lawyer in Grand Rapids, MI
• A local dentist in Scottsdale, AZ
• A local construction worker in White Plains, NY
• A local florist in Bakersfield, CA
• A local print shop in Irving, TX

Independents are most often service-based businesses and thus to rely more heavily on word-of-mouth and referrals than on marketing to recruit new customers. Independents also do not have the tie-in to a major brand that can be leveraged as part of its marketing efforts, which dilutes the impact the independents expect from any marketing investment.

Interestingly, there is an overlap whereby a co-operative seller may also be a branded branch e.g. a Best Buy selling Sony and Samsung products.

As local businesses remain retail focused and brands become more sophisticated with their ability to target communications by geographies, its no surprise that local marketing continues to be the largest growing form of media. Even traditional media forms, such as newspaper, have seen substantial growth in local advertising spend, despite slipping circulation figures.
Why? Because relevant and focused marketing produces results.

Current statistics demonstrate a total local marketing spend of $220 billion in 2007, across an estimated 32-38 million local businesses . Historically, these local businesses have two options in managing local marketing, both requiring a sizable investment (1-12% of revenue and totaling the $220 billion annual aggregate spend):

• Hire a local advertising agency -outsourced model
  
• Hire a marketing and creative staff -staffing model
  
  

As both of these options are very manual and labor-intensive, LiveAdMaker offers an online service to these local businesses to be able to execute top quality local marketing campaigns without the expense of a local agency or creative staff. Local marketing by media type: As technology evolves and advances, local marketing is becoming with a higher degree of customization and relevance to target audiences becomes possible.

Compilation of ZenithOptimedia (December, 2005), TNS Media Intelligence (2005) and AdAge (June 27, 2005) Source: Local Ad World (2006) includes local branches of corporations e.g. local Best Buy, local Office Depot. Statistics also used for branded branch, co-operative sellers and independent breakdown. The two sets of numbers are consistent with each other as this puts annual spending for businesses at between $6,000 and $7,000.

LiveAdMaker supports all forms of media and is the only system of its kind that allows for the customization of ads quickly and easily regardless of location of media type.