National advertisers and hyperlocals could fit very well together but only if they both up their game

It may not be the most obvious fit but if national advertisers get smart they could potentially benefit from over 300 hundred highly targeted advertising environments, and if they want to become sustainable hyperlocals need to look to the likes of Sainsbury’s to help them achieve that.

This is not new ground for me, if you happen to get me going on hyperlocal advertising or even online advertising in local media in general you’ll see me get all passionate. My latest victims were John V Willshire and Paul Squires. Paul invited us to take part in an interview as part of Imperica’s “In conversation with…” series. We talked about hyperlocal, it’s relationship with local media and the advertising opportunities that lie within.

John made the point that the fragmented nature of hyperlocals makes it difficult for national advertisers to target them.

So much effort would go into making an ad, that sending it to 4000 people wouldn’t be worthwhile; it needs to go to 4 million. In the hyperlocal model, you can’t serve the same ad to all of those communities.

As a hyperlocal site owner I wouldn’t accept a generic ad from a national advertiser either, so what’s the solution?

I’ve mentioned the Chasetown FC example many times – why show the site-wide ads to readers of Chasetown FC articles when you could get Chasetown FC’s sponsor to advertise on those and directly capture their target market online as well as on the pitch?! It’s simple and effective.

By the same token nation advertiser’s could focus their advertising.

JVW: An example might be Sainsbury’s, who is a client of ours. Through the tall model, we would place an ad on every hyperlocal site.

PJ: The reach would not matter to us [in Lichfield], as the nearest Sainsbury’s is 20 miles away!.. so there’s wastage.

JVW: Exactly! You just reach lots of people. The long model with Sainsbury’s is finding the hyperlocal sites relevant to the stores – using their data.

Data! Okay then, Sainsbury’s – here’s a (by no means exhaustive) map of hyperlocal sites in the UK. Now give me a map (open data please, none of this ‘store locator’ nonsense) of your stores in the UK – let’s squish them together and find the overlap.

There’s your hyperlocal target market. Now tie that into your offers database and hook it all into Addiply who deliver your targeted ads, one by one for as little as £2/week (maybe less).

Hyperlocal is still too fragmented.

It doesn’t have to be Addiply delivering the ads (though really I don’t personally see why you’d go elsewhere) but for such targeting to work there has to be a significant network to hook into.

Some hyperlocals don’t do advertising, others aren’t convinced it’s for them. That’s fine, but I think we all accept that sustainability is an issue and there’s no point in loosing money running one of these sites.

That’s where a little trickle of £2 per week from a well targeted Sainsbury’s ad might just fit in nicely.

There’s been plenty of talk about hyperlocals working together and continuing the conversations that take place at events like TAL10 and LNO10 but nothing concrete. What we need to become sustainable and move forward is to build the network of niches that is touted by so many as the way forward.

Such an alliance would present a more solid proposition to the likes of Sainsbury’s who would need convincing that the effort in targetting those 4,000 is actually worth it. That 4,000 would become 4,000 x 300+ with less relative wastage than a 30-second blast in the middle of Corrie.

Okay, so it’s not your 4 million but it’s getting closer…

4 thoughts on “National advertisers and hyperlocals could fit very well together but only if they both up their game”

  1. Philip, if Sainsbury’s advertised on the Lichfield Blog using Addiply at the advertised rate of £10 per month and did the same on 300 other local sites for the complete year that would make a dent of £36,000 in their annual budget. They probably spent that on advertising in the time it has taken me to write this post. I expect Sainsbury’s annual advertising is in excess of £50m based on figures I have found online. Even if you manage to network every Hyperlocal in the country you simply would not have the scale.

    Its also key to point out that whilst there is merit in your argument that they could eliminate wastage, it only makes sense to eliminate that wastage if the cost of doing so outweighs the cost of the wastage. Therein lies the problem, the economics do not add up without scale.

    Even if big national advertisers do start to geo-target advertising to the level you are talking about they are much more likely to do so with the likes of Google and Facebook which already provide a reasonable level of geo-targeting, and more importantly, have the scale. I can go to Facebook today and target everybody on there within 10 miles of Lichfield. I just had a look on Facebook and apparently doing so would reach 50,220 people which is no doubt several times the size of the audience of the Lichfield Blog.

    The reason Hyperlocal is a hot topic is that the digital marketing budgets of most small businesses are still sitting on the sidelines and they collectively represent the last major untapped online ad market.

    Hyperlocal’s need to proactively develop relationships with local businesses and work with them to help them market their products and services more effectively. And of course help them overcome the biggest issue with local advertisers, namely their lack of sophistication when it comes to online media.

    Going after national advertisers is a red herring.

  2. Our experience has been that the yield you get on advertising for local SMEs has been far higher than national advertisers. We’ve pursued larger advertisers for years and had limited success and often the headaches presented by the agencies they employ make the real returns even less once you take into account the cost of client care. Local businesses ‘get’ what we are offering because they use the sites for things other than promotion.

    You can already take advertising for national businesses through one of the ad networks but you would have to generate a huge amount of traffic to get any sort of meaningful returns from these.

    Local web sites offer small local businesses exactly what they want – customers in their area. Our strong advice to anyone building up a community web site would be to focus your sales effort on them.

    There is an additional benefit of being the champion of independents against national ‘clone’ businesses.

    The problem with national companies is that ‘hyperlocal’ to them would be London or Birmingham not Lichfield or Fulham. You are quite right that there would be substantial benefits for different local sites increasing co-operation but I don’t think ad sales would be top of the list.

    Thanks by the way for your presentation at LNO10 – very well put together and informative.

    Sean

    Neighbour Net

  3. I know that not all hyperlocals charge the same amount as we do so it won’t necessarily be that. However, looking at Lichfield they could at present spend hundreds each week advertising in the local paper and reach under 40,000 people, or spend £10 per month on The Lichfield Blog and reach around 10,000 people. I don’t believe it would be hard for us to begin to match the circulation figures of the paper with TLB and then the economics for Sainsbury’s (or more likely here, Tesco) get even more interesting.

    John suggested that nationals like Sainsbury’s could offer hyperlocals a range of options, helping them to choose whatever suits them. This could also include pricing options which would help Sainsbury’s make sure it’s worthwhile. It’s all still to play for.

    True, Google and Facebook do have very powerful targeting systems but Google and Facebook are of little use to hyperlocal sites – sites which have a very captive, engaged audience. This audience, per head, is more valuable than the Facebook/Google audience and so long as it’s easy to target them (i.e. as easy as Google or Facebook) it should hopefully be a no-brainer for the national advertiser.

    I’m not suggesting either that national advertisers should replace local advertisers. In fact, I’ve long thought that should TLB start to take national advertisers they may well be relegated beneath local advertisers deliberately in a dedicated spot. I’d guess that local advertisers will probably always bring in the most revenue but there’s also worth in nationals.

    Thanks Sean, glad you enjoyed it.

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