local media insider
Featured

Profitability is the problem. Does this company have answer?

Self serve advertising platforms eliminate most of the costs of delivering digital services

Posted

Profitability is the major issue for digital executives at local media companies. 

It is a tricky situation.

They have to sell an increasing number of marketing products businesses want, while still meeting profitability goals.

Reselling Google and Facebook are notoriously low margin and using a white label partnership takes another slice out of the pie. Managing these programs inhouse, on the other hand, incures significant start-up costs and leaves programs vulnerable to loss of a key skilled employee. 

The problem is not actually new. Small and medium size businesses were priced out of TV, radio and newspaper advertising in larger markets years ago. Digital ad and service divisions are supposed to be able to both recover advertisers and reach these lost markets. 

But most programs, even those that are mature and barely profitable, considered loss leaders neccesary to retain and build client relationships for traditional advertising. 

“We have to be asking what is the most efficient way we can sell what is perceived as a “commodity,¨ said Chris Edwards, president of the Cedar Rapids Gazette and its agency FusionFarm, at a recent media conference. “And we have to look at automation.”

Self serve advertising platforms may be a way out of the dilemma. 

iPublish Media, the leading developer of self-serve advertising, automates both the buying process and the back end fulfillment, making each sale hands-free. The process elminates the need for a sales rep, ad design and placement in the distribution channels. 

iPublish Media co-founder, Brian Gorman claims that these costs from the seller allows bundles as low $99 a week to achieve a 60% margin.

The stakes for local, journalism-based media companies are huge.

64% of small businesses do their own marketing without a sales rep or agency of any kind (Borrell Small Business Report, 2017) and they are doing badly by their own admission (71% according to the same report). 

Take a minute to think about this number.

If your media company has 20,000 businesses in the prospect database, more than 12,000 of them are already using DIY advertising and just buying it from other companies that do not support local journalism.

What would it take for your company to sell DIY local packages that include trusted local media by email? 

iPublish Media´s new SMB platform  ‘Amazonify's’  the purchase of print, Facebook programmatic, email, video and even Waze ads, smartly bundled into three tiers at low price points. The platform pulls content from the "Google my business" panel to automate ad design and places the ads via a variety of slick integrations. 

Typically, the bundles sell for $129 to $199 a week—affordable to almost all small businesses. Businesses like being able to create their own marketing campaigns in a few clicks, with estimated clicks that will be achieved and automated reports. 

“No one believes me,” Gorman says about the 60% margin on small campaigns. However, some companies apparently do. Gatehouse has signed up and is in the process of deploying the new SMB omni-channel platform. 

iPublish Media, may be the right company at the right time. They already have 12 years of experience selling white labeled DIY front end platforms for obituaries, private party ads, public notices and real estate under their belt. In fact, they claim their DIY transactions reached more than $200 million last year and have surpassed a billion dollars in the last decade.

If they can bridge the profitability gap, the marketing department of local media companies will be tasked with driving e-commerce sales of marketing packages. 

*https://www.adweek.com/digital/new-research-shows-ads-in-trustworthy-environments-are-becoming-significantly-more-effective/