Sell Local: The Digital Ad Budgets Publishers Are Overlooking
When it comes to ad sales, publishers have seemingly well-thought-out plans. Brands will spend millions on a single campaign to get in front of their audiences, and publishers have a plethora of ad products to help those marketers reach and engage their targets.
Because they have the largest budgets, many national publishers deploy their sales teams to talk with the largest agencies to get in on their media plans. However, these publishers may be missing out on a major revenue source: ad budgets coming from local and regional agencies and marketers.
Most national magazines, newspapers, and websites don’t have the sales resources to connect with regional advertisers. Instead, they focus on national campaigns that drive the most revenue per campaign. While national publishers are aware that local ad dollars are available, it makes sense that they don’t pursue them based on staffing limitations.
Smaller Markets Add Up to Big Revenue
While large multiregional agencies focus on national clients and campaigns, regional and local agencies provide value to smaller brands that cater to local audiences. Such brands, which are often located in underserved markets (think Idaho, Oklahoma, and Nevada), may seem too small to pursue.
That said, advisory firm BIA/Kelsey forecasts regional agencies will be major catalysts for nearly $30 billion in local digital media spend by the year 2020. Establishing an efficient way to pursue such “torso and tail” advertisers can have a significant impact on the bottom line.
Let’s consider an example: A local utility wants to run a $200,000 advocacy campaign targeting environmentalists and thought leaders across the region it serves, and it’s willing to pay high CPMs to find them. Many of those users probably spend an equal or greater amount of time engaging with a variety of content on national sites (as opposed to local ones).
Consider the recent study by Borrell Associates that highlights the value of local advertising in the framework of political marketing. Of the $1.7 billion being spent on political ads during this election cycle, the report found 67 percent concentrated in local markets.
The moral of the story? If you’re a publisher focused primarily on national buys and media plans, you’re leaving substantial revenue on the table.
A Resource Challenge
Pursuing local ad dollars is not a trivial task for any publisher. Building an in-house team solely for this advertising segment could increase your operating costs. Therefore, you should test the revenue impact of doing so before developing a long-term strategy. To test effectively, you may want to consider partnerships with reputable organizations specializing in local.
Whether through partnership or with an internal sales team, your salespeople must have expertise on local agencies, advertising, and brands. You may already have an in-house sales team in the major media markets, but what about the DMAs outside the top 10? It’s important that your local sales team has a deep understanding of the strength of your sites’ engagement with the local audiences that marketers may want (e.g., young urban males, Midwest soccer moms, elderly couples in the South).
I’ve talked to local agencies and marketers who have said they regularly field meetings with 30 vendors specializing in local media. With such fierce competition, these dollars will not come easily. That said, if you can develop the appropriate partnership strategy, you can create a more robust network of clients and increase revenues without needing to increase operational costs.