Local advertising offers opportunity in times of falling programmatic campaigns

By Christian Scherbel

Founder and CEO

Smartico

Berlin, Germany

Connect

The "corona bonus" has started to stall.

Budgets for digital and programmatic of big, national advertisers and e-commerce giants, in particular, are falling. Growth seen by many rising stars is waning. Stock market valuations have plummeted. And, lots of ad-hoc messages show the astronomic e-commerce growth rates of 2021 is not a sustainable trend but, rather, a one-time phenomenon.

Don't get me wrong: E-commerce will grow. E-commerce will have a great future, and Amazon is on its way to world domination. But, for many of the big fishes behind Amazon, it's important to be realistic about the outlook.

Right now local advertisers have to navigate lots of confusing options to place a single digital ad.

For lots of publishers, that means dealing with reduced impressions (CPMs), especially in programmatic campaigns where the overall notion of "buy revenue at all cost" starts to vanish.

New opportunities

But the good thing is that there's still one group of digital advertisers that can make up for this loss in CPMs. And they can do this without hunting readers with products they viewed once in an online shop 10 days ago.

I am talking about local advertisers.

Local advertisers are the most underserved segment of online advertising. This is because they are hard to sell to due to their lack of digital advertising experience. They are often not profitable to sell to because of small budgets - sometimes only US$100 for a digital campaign. Also, they often can't buy due to a lack of proper banner and landing pages.

Assessing the opportunity

The good thing is this problem can be solved, and the potential return is high. While a typical programmatic campaign cashes in US$2 to US$5 per 1,000 impressions, a local campaign can easily make US$15 to US$20 per 1,000 impressions.

This is because local advertisers need more service around an ad that has to be paid. They also lack the negotiation power a 100 million ad impression direct customer has with publishers and the programmatic network. Additionally, this is in direct sales, and no intermediary takes away from the publishers' revenue.

Execution is king

Execution is king at getting small local advertisers to buy digital campaigns.

The simplest way is to define a set of print advertisers that should receive online equivalents of their print ads. For example, this can be based on the print budget: Every print advertiser less than US$500 or every print advertiser with less than half a page.

It can be challenging to figure out how to turn a single, simple ad into a campaign.

Each of those advertisers should receive a set of banner ads and/or a landing page plus a fixed amount of regional ad impressions (such as 5,000 for US$99 in one banner format). This first step is crucial for creating a simple and scalable sales model without too many options that sales reps can sell in less than five minutes.

The second step is to automate the delivery process. Optimising the sales process secures efficiency and margin, but starting with individual briefings and feedback loops from there would immediately wipe out all profits for a US$100 campaign.

Services like Smartico offer to build banners and landing pages directly from PDFs of the print ad including all data from the print ad, as well as additional information from a homepage, social media profile, or Google Places entry of the local advertiser. This is all without the advertiser or sales rep having to deliver any additional information.

Publishers should report on KPIs that mean something more tangible than click-through rates.

Cases from many newspapers - with and without Smartico - show that local loyal longtail print advertisers are still a huge untapped business in digital for most regional publishers. They can easily make hundreds of thousands of dollars in new revenue each year.

For example, Schwäbisch Media from Ravensburg, Germany, introduced an automatic bundle to all its small ads in weeklies and its daily newspaper. This now brings in more than US$300,000 in profits each year.

Be bold with your loyal print advertisers and offer them - and your readers - a solution they want for digital advertising: full-service and high-quality niche ads instead of the same national campaigns on all platforms. High click-through rates show how much readers appreciate those local exclusive ads, even behind paywalls.

YOU MUST BE A MEMBER TO ACCESS THIS CONTENT

Become An INMA Member or Log In

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About Christian Scherbel

Christian Scherbel is founder and CEO at Smartico in Berlin, Germany. Christian can be reached at [email protected].

Related Articles