How Local News Publishers Can Win SMB Ads Against Facebook: A Case Study

We know that local news providers can compete with Facebook for brand advertisers. But what about publishers also capturing SMBs—is that too much of a stretch? Does Facebook still have the competitive edge with the restaurants and other shops and services at the local shopping centers?

On the surface, it may seem so. Facebook makes it so easy for a busy, neighborhood-based merchant to plan his or her ad strategy, including creating the actual display or video message—and the local business owner or operator can do all of this without having to sit down for time-consuming meetings. In fact, the harried restaurateur can go through the start-to-finish process online after closing for the night.

Besides, Facebook can sell a micro-targeted audience to the merchant at a price that can accommodate the tightest budget. There’s no minimum pricing for Facebook ads.

Facebook has yet another advantage. According to programmatic expert Ratko Vidakovic in a recent article penned for AdExchanger, middle-man ad-tech vendors have “abandoned” SMBs on demand-side platforms (DSPs), which aim to deliver the best ad deals to businesses in fast-paced programmatic auctions. That leaves only one place to which SMBs can turn for their messaging: Facebook.

Or does it?

Not so, says Michael Dinan, editor of the local news site New Canaanite in suburban Connecticut. Dinan, who founded his site four years ago, is quite credible on this issue. He has 34 active local advertising accounts, and he is profitable.

To find out how Dinan does it, I put the following questions to him:

Let’s start with what you see as your basic advantages against Facebook and other platforms. Would you detail them?

First, we offer geographic and other qualifications that Facebook and Google cannot guarantee. We’re reaching prospective customers for retailers and service providers in New Canaan in a way that those larger ad platforms are not structured or equipped to do. While advertisers may choose to float a “boosted” (i.e. paid-for) post in front of those who identify as living in a specific town, using Facebook alone in no way says that the target user seeks out or trusts Web advertising that pops into the user’s News Feed.

In fact, Facebook has grown so popular that it’s almost a given that person X on the street has an account. As a result, the effectiveness of digital advertising through the social network has grown less effective—we are no longer talking about a self-selecting community of the Web-savvy.

Businesses may also choose to advertise to those who “like” their pages and through those users’ friends. However, Facebook users’ networks are vast, and as friend lists sprawl, they only become more so. While it may help a business grow its own social following to promote a professional Facebook page, there is no guarantee that such boosts are converting into customers or sales.

What do you see as New Canaanite’s unique strengths?

NewCanaanite.com is read entirely—and, if our newsletter stats tell me anything (66.5% open rate, 31.3% click-thru rate), near exclusively—by local people, including the most involved stakeholders of the town and supporters of its merchants. We do still have two weekly print papers in this town, decades-old, both of them, and there are readers who are accustomed and dedicated to those legacy media products. But those who choose to read New Canaanite are familiar and engaged with our news site as a trusted source of information in a way that unconverted news readers are not. I believe our strong reputation and credibility as a source of solid hard news benefit our advertisers by association.

Secondly, publishers like me run very lean operations. I wouldn’t say we as journalists take a vow of poverty, but I earn a comfortable income by reporting on one small town. It’s a dream job, and there’s no thought here of “scaling,” as the AdExchanger article says. This is the mountaintop, and I think it’s important, once you’ve ascended the mountain, to recognize and appreciate where you are.

While we are not exactly a demand-side platform in that advertisers must deal with a human (me) in getting their digital ad up on the site, the Broadstreet Ads platform, which I use, does give SMBs control over elements of the ad. The Editable Ads, in particular, are attractive to realtors, retailers, food service providers, animal rescue, and others who want to update their ads’ photos and text on their own. While ad tech may have “abandoned” SMBs on programmatic DSPs, Broadstreet is a great example of a company that serves both independent news publishers and small businesses.

Thirdly and most importantly, I would say, when you’re talking about local business owners, you are talking about local people. They not only own and operate shops and service businesses in town, they also volunteer on municipal and nonprofit boards, coach little league teams, belong to service organizations, and attend community events.

There’s a lot that goes on in a small town, a lot of information out there, a lot of competition for people’s time and attention. As a result, it is a plus to have an “in” with the local news outlet with the best reach—whether that means you can text or phone a publisher to have your church’s tag sale or your organization’s event appear higher in a list of featured events, or have a new product, sponsorship, or promotion at your business mentioned specifically in a news summary, or have a letter to the editor from someone you know get directly through to a publisher during a very busy time.

Still, Facebook, along with Google, is scooping up so much advertising, including on the local and hyperlocal scene, as shown in this chart from the Interactive Advertising Bureau’s recently published ad revenue report. Your response?

Social media marketing has gained popularity and market share for many of the reasons cited by the Ad Tech report—it’s easy to use, executes rapidly, starts at a very low point of entry money-wise ($5 or $10) and provides enough data to an advertising SMB to allow owners to check off the marketing box. But how effective this type of advertising is for local businesses is another question entirely. Certainly, it garners “likes” and shares. A Facebook user will give those types of clicks rather easily. But that user parting with money in a purchase of a product or service is another thing.

Bradstreet Ads hasn’t abandoned SMBs. Just the opposite, its various formats are designed to serve those smaller businesses specifically. One of the advantages of the Facebook or Google platform is that it’s user-driven—the interface is intuitive, easy to use. But once one of my advertising clients is on-boarded to Broadstreet, he or she experiences much the same facility, and in even more powerful ways. With the Editable Ad, for example, the user creates a single template that can be used to tout various products or services in images and language, updated as often as the advertiser wants.

If local news providers want to avoid being overwhelmed by Facebook, you’re saying they should build or maintain a direct relationship with local merchants instead of going the whole programmatic route—correct? 

That’s exactly right. I shun programmatic advertising entirely, because I must control who my advertisers are. Programmatic is a sort of “Set-it-and-forget-it” approach, and that may be attractive to some independent news publishers. But those types of publishers are not succeeding and never will.

The way forward is to curate your advertisers very carefully and say “No” if it doesn’t feel right. I’ve turned down many potential advertisers because they seem like difficult people or have expectations on the editorial side that cross the line—as in they want specific coverage, like a “pay-to-play” model, which I don’t entertain and never will.

Operating a lean business model goes hand-in-hand with establishing credibility. A news publisher should never be at the mercy of an advertising business or risk it. And you can never get into a situation on the cost side where you can’t turn down an advertiser because you need the money. That’s a death spiral.

Not controlling who your advertisers are is a trap as dangerous as not controlling your content. It’s not just a matter of avoiding conflicts where an advertiser you really want should have exclusivity in its vertical market. In small towns like the ones I cover, everyone knows everyone else. There are Hatfields and McCoys. There are certain combinations of advertisers that just won’t work, and you choose this one or that one.