Borrell Sizes Up What’s Behind Local Ad Media Choices

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We know from the numbers that local advertisers are increasingly choosing social media to place their messages. But they’re also turning out to be cautious businesspeople who like to maintain a balance in their placements among multiple media, as the new Borrell Associates survey of local advertisers shows.

Digital banners are supposed to be so “Web 1.0,” but, as the survey of 666 local advertisers documents, they ranked only 5 percentage points below social media in local placements in 2016. To find out why, and to get other answers about the “why’s” of local ad spending, I went to Gordon Borrell, founder and CEO of Borrell Associates. Here’s the Q &A:

Based on your survey of local advertisers, banner ads were tied for third (with cable TV) among most-used types of advertising, but in return on investment (ROI), banners ranked eighth.  Why do advertisers use banners so often if their ROI is at the lower end?
Habit, mostly. Banner ads have been around for two decades and are easy to understand (for the advertiser) and easy to sell (for the media company). They also tend to be fairly inexpensive, and a lot of digital advertising that needs to be placed gets put on the programmatic networks as banner ads.

Should the digital sites of daily newspapers and “pure-play” news sites put more emphasis on revenues sources beyond banners – like, video ads, sponsorships and subscriptions? Or should they assume that advertisers would keep using banners as often in the future, despite their lower ROI?
The model that focused on selling banner ads around a newspaper’s, pureplay’s, or TV station’s “owned” local news content was the first step in a very long discovery process. Selling banner ads on “my site” hasn’t and won’t lead to riches by itself. It’s just one revenue stream that has gotten quickly overtaken by more viable advertising opportunities coming from search, social media, streaming video, and mobile apps.

If you want to generate enough money to support a content play, you’ll have to redefine yourself as a marketing company, not a “media” company that merely offers display-type exposure to a limited audience of news readers.

A second Borrell survey – on advertisers’ spending plans for 2018 – shows digital will get far more spending than any other kind of media. Do you know whether local news providers will share with other kinds of sites in that spending increase?
Unfortunately, no. I don’t know of any advertiser dying to put a message in front of people who read local news. The industry needs to get away from this news-centric mentality when talking about ways to generate the funding to support local news sites. They’re going to need to become first-class marketers.

The only way to do that is to become savvy at using all the various marketing tools now at anyone’s disposal, and then to sell that ability to local businesses. That’s why you see companies like McClatchy, Scripps, The New York Times, The Washington Post, GateHouse Media, Gannett, Graham Media and so many others creating these digital agencies.

A number of local news providers are participating in the Facebook’s Journalism Project’s Local News Partnerships, which includes Instant Articles as a monetization driver. News providers are also interacting more with Google, like Accelerated Mobile Pages (AMP).  to improve the mobile experience. Are these initiatives with the big platforms good for local news providers, or should they be more focused on their own direct relationships with users (and advertisers) in their backyards?
I think Instant Articles and AMP are good for local news providers who see them as another conduit to expose readers to their news products. There are some news providers who think otherwise, but withholding content from Facebook or Google is kinda like those standoffs we’ve seen when a TV stations refuses to deal with the local cable system and gets its signal yanked.

I’ve never seen a TV station win, nor have I seen a cable system collapse, in those cases. Google and Facebook aren’t going away anytime soon, and unfortunately, they’re also in control of their own programs. All we can do is work with what they’re offering and perhaps try to influence that offering through groups such as the Local Media Association and the Local Media Consortium.

Tom GrubisichTom Grubisich (@TomGrubisich) has written “The New News” column for Street Fight since 2011. He is also working on a book about the history, present, and future of Charleston, S.C.