Effective advertising sales start with knowing how to identify potential advertisers and understanding the economic environment in which they operate.
Local news sites identify potential advertisers by becoming deeply involved with the local business community. Niche sites may recruit advertisers through editorial contacts or participation in events they organize. The sites pitch a highly engaged, targeted audience.
Local news sites mine community connections and business networking events to identify potential advertising customers, primarily small local businesses or institutions. The niche sites, on the other hand, more often target potential advertisers from among companies that seek editorial coverage, attend or sponsor events they organize, or through ad networks.
Since local news sites draw nearly all of their advertising from small, local businesses, they are highly focused on the local business economy.
Identifying advertisers requires “really becoming expert in knowledge of your local businesses, understanding the troubles they ‘re having or the successes.” said Berkeleyside co-founder Lance Knobel.
Business networking events such as the Chamber of Commerce are a key source of potential local advertisers, who mainly are small businesses or organizations.
“We spend an awful lot of time working big events,” said Teresa Wippel, who operates several sites north of Seattle. “Our chamber of commerce has more than 500 members and they are very active and put on a lot of events. We are a fixture at their weekly luncheon and their breakfasts.”
Wippel and her ad sales rep are each on a couple of local boards. “It gives people a chance to get to know us, to develop a lot of trust in us. It takes a lot of work and it has paid off.”
In competitive markets, sales reps also track who is advertising in other publications. It is “easiest to get someone who is already advertising to expand,” Peter Blasi of Riverhead Local said.
At Baristanet, sales manager Annette Batson, tries to identify potential advertisers whose products or services fit the readership and enliven the site.
“The town likes art, culture, food. Education is really important. Parents want the best possible education and cultural opportunities. I can identify businesses who would benefit from being exposed to that population,” Batson said.
“Also they have to be sexy,” she said, citing advertisers such as local art centers and museums. “Window washing is a boring business, more of a value pack advertiser. It’s kind of subjective.”
Niche sites identify companies that want to sell goods or services to their niche audience, often through events they sponsor or when the company approaches them for editorial coverage. Depending on their size and scope they may appeal well beyond local advertisers.
Technical.ly, a network of tech sites that launched in Philadelphia in 2009 and has expanded to four other local markets has “a mass audience of 100,000 local technologists” that can appeal to both local and regional advertisers, according to CEO Brian James Kirk. Technica.ly’s primary revenue source is sponsorships of events. In 2015, it is expanding its advertising efforts in 2015, including both site ads and bundles of sponsorships and advertising.
Kirk said Technical.ly has used a variety of measures to identify potential sponsors and advertisers, including to RSVPs to Technical.ly events, newsletter subscriptions, and editorial familiarity or coverage.
Search Engine Land, a national site that covers search marketing, also identifies potential advertisers from companies that send news for editorial consideration and by checking competitive sites for leads, according to Elwell.
“If somebody’s bothering to go through a PR effort to try to influence our editors they have already acknowledged that they are interested in reaching our audience,” Elwell said. “So going back to them and saying look ‘whatever happens on the editorial side happens. We have nothing to do with that. But we do have ways to help you reach this audience.’ “
As the operation has evolved, advertising has become a smaller part of revenue for Search Engine Land and other Third Door sites. Advertising is usually bundled with lead generation, which has grown significantly in recent years.
CT News Junkie, which covers state government in Connecticut, targets lobbyists, public relations firms and ad buyers who are involved in politics and campaigns. Many of them are listed on CT News Junkie’s directory.
“Since we’re not a traditional local news operation, we end up targeting clients differently. There is a layer of middlemen between our site and the organizations that want to advertise for political reasons,” said Doug Hardy, partner and business manager of the site. “So we know which firms are working with clients based on campaign finance disclosures and other databases. And, we also get press releases from firms who are planning advertising campaigns for political clients.”
The more successful companies are devoting significant resources to professional sales reps so they can sell directly to advertisers at premium rates.
Among the local news sites, nearly all of their advertising comes from the immediate community. While larger sites like Noozhawk or a cluster of small sites like the Home Page group near Nashville may also attract regional advertising. Large niche sites, such as Search Engine Land, also appeal to national advertisers.
Most of the sites – both local and niche – are too small to be of interest to ad agencies.
“The media agencies deal with scales and we are not that big,” said Michelle Madhok of She Finds, a fashion site. “We’re 1.5 million uniques. But when you’re dealing with competitors and they’re 15 million uniques, they’re like ‘Why should we bother with you?’ “
Smaller niche sites do less direct sales, instead relying on ad networks, which generally offer lower returns than direct sales. For example, Living on the Cheap derives most of its revenue from Google Adsense, as well as companies who contact the site with press releases. Budget Savvy Bride gets most of its ads from the wedding ad network.
By contrast, most of the local news sites do not participate in automated networks like Google Adsense. They fear this could undercut their own sales if local advertisers discovered they could have their ads displayed on the same the site for less money by buying through the network.
Uriah Kiser of Potomac Local tried Adsense but quickly dropped it “when advertisers I was pitching showed up in an Adsense unit.”
Niche as well as local news sites also draw advertisers from referrals or unsolicited queries.
“A lot of them come to us,” said Tyree Worthy, the sales rep for Uptown Messenger.
“We are community based so we do have a lot of really small businesses on our site and they’re really interested in what we’re doing.“
Smaller niche sites are considering direct sales as the CPM rates they receive from networks decline.
Budget Savvy Bride derives most of its ad revenue from a wedding-focused ad network but as rates fall, founder Jessica Bishop knows she will need more with direct sales.
“I don’t do outreach. I don’t have time. I don’t have a sales person. I can barely keep up with my emails and writing content for the blog,” founder Jessica Bishop said. “I’ve been able to make it work without dedicated outreach but I know that I’m leaving a lot of money on the table by not doing it.”
She Finds, a national fashion site, has generated approximately $1-$1.5 million in annual revenue, with 70 percent from an advertising network, Glam. But Glam’s rates are falling.
“At one point CPMs were $10 and now they’re a lot of times below $2. It’s gotten worse over the last year or so but it’s been happening since 2004,” said founder Michelle Madhok. She plans to develop her in-house ad team with more focus on sponsored content.
The sites can pitch targeted audiences to advertisers, whether local or topic-focused, or in some cases, both.
The local news publishers are selling visibility on a highly local site frequented by people who are part of and interested in the community.
“Local businesses need to have support of local residents. That’s what I can deliver to them. I can deliver exposure,” Baristanet’s Annette Batson said.
A few local publishers also seek support because the advertiser may consider their sites a community asset.
“We encourage advertisers to support us in the same way that NPR solicits donations. We pitch ourselves as a public good, but one that can be effective for the business as well,” said Robert Morris of Uptown Messenger.
Niche sites can offer advertisers an audience with a high level of engagement with a focused topic, such as technology or marketing, or type of purchase, such as fashion. Also, they are more likely to attract regional or national advertisers that may be willing to pay a premium to access their audience.
“The unique market advantages we have are geographic focus and niche audience,” said Kirk of Technical.ly.
With their display advertising, the local news sites are pitching local visibility over time, not necessarily immediate user clicks or purchases.
For local advertisers, the payoff on a local site is that they are seen frequently so the customer will remember them when she needs the product or service the advertiser offers. That is more valuable and realistic than the idea that many people are going to click on their ad and immediately down to their store to buy something based on seeing the ad one time.
“When an advertiser wants to know clicks, I explain that eyeballs are more important. Over time, the customer will remember them,’’ Blasi of Riverhead Local said.
That means that ad campaigns need to last a while to be effective. This dovetails with the publishers’ aim of getting advertisers to sign long-term contracts so that don’t have to constantly resell their inventory.
Blasi says his pitch to new advertisers highlights the low cost and effectiveness of online advertising compared to print.
“Digital is so much more affordable. I think it’s the cheapest way to advertise now,” he said. “You can’t click on a newspaper and go to their (advertiser’s) website.”
Borrell Associates, a leading advertising research and sales training company, stresses the need for a consultative approach to sales in today’s advertising environment. As more and more online products become available, potential advertisers face a bewildering set of choices.
The sales person must be a “trusted advisor. The customer benefits from the sales person’s expertise,” Borrell says.
Blasi agrees. He emphasized that the job of the sales rep is “solving a business problem for them, not just selling them an ad.”
Blasi and others said they try to avoid overselling. “I may tell them to go
for the cheaper ad and see how it works. Then they pay three or four hundred rather than seven hundred and then be mad at me after two months.”
“It’s all about the product. It’s all about community, community, community.
If people aren’t getting results, I don’t want them on my site. That’s the worst thing that can happen,” Blasi said. “If you’re not confident in the product you’re never going to make a sale. I’m confident we’re getting the numbers every day.”
Traffic, or the amount of exposure a news start up can offer advertisers, is obviously one key determinant of rates. A number of publishers, including several in this study, have launched sites in neighboring communities in order to offer their advertisers more reach.
Typically, they offer advertisers the ability to advertise on a single site. Or, for a higher rate, the advertiser can be seen across multiple sites.
For example, advertisers who buy across Home Page Media Group’s four local sites near Nashville get a 10 percent discount, according to Gilfillan.