Healing What Ails Local

Mario Diez is a guest author. If you’d like to submit a guest post, click here.

When the economy took a nosedive in late 2007, the search segment held online marketing afloat. To this day it commands the most online ad dollars ($12.37 billion) and is generally the point of entry for online marketers. Since search became the bell-cow of the digital marketplace four or five years ago, there have been whispers about how display advertising might come roaring back, powered by an expected boom in local advertising. But that local explosion hasn’t happened yet.

Local has always been regarded as the sleeping giant in digital, with so much heavy lifting required and so few solutions available at scale. Local merchants experience benefits from text ads, but scaling local buys for national brands across local publishers’ sites has always been a big challenge. In today’s data ecosystem, as with the rest of digital, the last beneficiary may be the most important one — the brands wanting to buy in local environments. But, at long last, a solution may be at hand.

Local websites have a built-in geographic starting point, but improved audience data gives advertisers a better estimate of age, gender, demographic and interests.

Local publishers are now finding a way to grab those national dollars by participating in centralized, single point-of-entry buying platforms that give national brands the tools and data needed to buy premium local audiences with national scale.

For years, national brands reached local audiences through newspapers. But print editions don’t attract consumers like they once did, and the shift in media consumption habits to online editions is forcing marketers to re-evaluate how to reach these valued audiences. Yes, brand advertisers can still reach them by buying inventory on the papers’ websites under the assumption that this is how past subscribers access the news. But there are two main problems with this approach: the level of work required to drive scale, and the loss of subscriber data.

One of the things that made newspaper print editions a larger and healthier business was that advertisers knew important facts about subscriber bases, such as the total number of subscribers and a breakdown of communities. This obviously helped them reach consumers who were more likely to buy their products. As much as any other element, this is what spawned the extremely successful weekend insert business, which was always a tremendous performer for performance marketers with their coupons.

Online, local advertising has been held back by limited audience insight. This is where the private, single point-of-entry, multi-faceted audience platform makes the most sense. Display has evolved rapidly over the past few years with the rise of ad networks, real-time bidding, ad exchanges and agency trading desks. Advertisers have shown that they want to reach the best possible audience available and are willing to pay more for impressions that hit the target.

Through a private audience network and real-time exchange, advertisers have the best of both worlds in buying upfront premium audiences in a guaranteed fashion while also bidding on impressions on a case-by-case basis. Local websites have a built-in geographic starting point, but improved audience data gives advertisers a better estimate of age, gender, demographic and interests.

Say a consumer spends a few minutes researching new cars, then surfs over to the Los Angeles Times’ website to check the news. The consumer is identified as potentially in-market for a new car, and Toyota or Ford can buy that auto intender audience upfront and serve the consumer an ad for not just a car, but a local dealership in Glendale. This localized creative helps drive offline sales; retailers can use this strategy to advertise new locations, guiding consumers into bricks-and-mortar stores.

A centralized local buying platform also solves a lot of campaign reporting issues associated with using multiple publishers and ad networks. A single platform gives advertisers real-time optimization recommendations based on campaign insights. It can deliver quantitative and qualitative insights about individual campaigns, the back-end learning that provides value to buyers.

This approach does not signal the end of direct sales by any means. It still makes sense for Dunkin’ Donuts to buy inventory on The Boston Globe’s website and run a campaign for iced coffee built around Boston Red Sox players. That campaign appeals to a wide audience of New England-based readers and the publisher can still command a premium rate and work in sponsorship opportunities and takeovers.

Those tactics aren’t going anywhere, but they offer complications when advertisers try to make direct buys across hundreds of publishers on a national scale. Creating national scale through individual buys is a nightmare that requires more time, staff and resources. A centralized system removes that headache and gives advertisers a variety of options for reaching local audiences.

It also creates tremendous efficiency and makes every data-driven transaction a simple exchange between buyers and sellers. It streamlines the local buying process, giving national scale on local sites while ensuring that more dollars from every campaign go to inventory and not to intermediaries. Improved audience data gives advertisers the audience they want while helping more publishers protect more of their rate card.

Mario Diez is the CEO of quadrantONE.