Inside the Market (Local) Vs. Outside the Market (National)

“Inside the Market” (Local) vs. “Outside the Market” (National)

A Case Study

Let's say you are in Portland, Oregon. Macy's department store is a "local" advertiser in Portland because it has a physical presence – a store – there, and Macy's is directing ad spending to the Portland market – even though Macy's ad spending decisions and purchases are (presumably, for the sake of this example) made at their headquarters in New York. We think of it as coming from the Macy's in Portland.
When we look at the New York market, we do not count all of Macy's nationwide spending as "local" to that market just because their headquarters happens to be there. Only the portion of Macy's total advertising that is directed to New York would be included in New York's "local" total.
If you are in a market that does not have a Macy's store – say, Glendive, Montana – the Macy's ads you see on TV or in your mailbox or online there would be considered "National"or "Outside the Market" advertising.
Our definition of "national" can be thought of this way: National ad spending is any marketing expenditure directed toward the market, but originating from businesses located only outside that market. Or we could say National advertising is spending from businesses that do not have a location inside the market.

In the diagram above, the green arrow represents "Local" spending that comes from locations "Inside the Market" and is directed to consumers inside that same market.
The red arrow represents spending from all businesses that do not have a location inside the market but are nevertheless trying to reach businesses inside that market. We call this "National" or "Outside of Market" spending. We could have lots of red arrows coming into the market from all directions.
The blue arrow represents spending by businesses located inside the market but directed at consumers outside the market. This is like Macy's spending that is directed at the rest of the country. It is counted in the “National” or “Outside the Market” spending of the other local markets to which it is being directed.