Are Local Media Companies Missing Out On Big Display SME Opportunity?

ExchangeWire wrote a piece recently on why local publishers should build out the SME platform, leveraging the already existing relationships that they have with local businesses.

It is interesting to see 1&1 in the UK really aggressively going after the local SME market with a blanket TV campaign. Owning the digital relationship with SME is a huge opportunity, and scale in this market is a massive untapped opportunity. Google makes much of its search revenue from the SME sector - but display thus far has failed to really open this market segment. 1&1 is now trying to offer social media management tools to its current clients so clearly owning the platform can allow you to upsell advertising and marketing management solutions.

By building the CMS as well as a media buying platform, we made the point that local media publishers could be the digital gateway for local businesses. Building another undifferentiated PMP is a good idea but it only addresses the buying needs of a finite number of big national/global brands - and budget especially when you are competing with big media and platform businesses. But how exactly can you execute a localised ad strategy?

Don't build, borrow

Local media companies do not have the resources or the cash flow to build out platforms for the new SME marketing platform? And why should they when they can re-purpose or white label existing solutions on the market - as well as leveraging your local sales network?

Building the CMS on existing solutions

Building a platform is difficult. Local media planners trying to build the new CMS for SMEs should not entertain anything like this. Use the existing tools on the market. WordPress is the best CMS tool on the market. Built on PHP and the best open-source CMS on the market, it could easily be re-purposed for the basic requirements of the SME. A development team would be required, but could also be out-sourced. Push the new solution through your existing media channels to get adoption from local businesses. Once they are on-board, you can then begin to up-sell the media buying and digital marketing business. Or you could just call 1&1 and partner.

Self-service advertising the key for local marketers

It will be extremely difficult to manage and execute 1000s of small display campaigns, and it wouldn't be a very efficient business. A self-service business is, as Google have shown, an effective way to sell to small and medium sized businesses. How would you do this in display - without trying to build a flawed ad technology solution? A tool that truly addresses the requirements of local marketers needs to be properly tested. Don't assume what this market segment wants. Be mindful of the lean start-up thesis: build, test and learn.

What would this self-service tool look like? You could easily bucket everything initially into display. Tag up local business sites. Licence DSP. And execute retargeting buys (prospecting could be outsourced) via the DSP/platform you have partnered with.

A UI will be required to allow marketers to pick and choose audience buckets to buy from and track campaign performance. Many of these tools are already available on the platforms that have an open API and Apps strategy. Many of these apps are available, but a customised UI for local marketers is a requisite.

If this sounds too complicated, then simply whitelabel a vendor like PaperG, who offer a self-service marketing and retargeting solution for SME. Still based in the US, this company has identified a massive opportunity in the fat middle and long tail of display advertising. That newspaper advertising has to go somewhere, and why should it all go to Google? Much of this solution offering is re-targeting, and this type of display targeting has proved it can compete with non-branded search on performance.

How this SME-focused solution hasn't been replicated in Europe (particularly Germany) is a mystery, given the market penetration of pure play platforms. Yes, it would be more difficult then simply selling into agencies, and aggregating unsold inventory in a PMP (not a bad idea in itself) - but the upside of a local marketing strategy would certainly yield more revenue and growth over the long term for cash-strapped local media companies.

Will getting more innovative help local publishers unlock new revenue?

The old media model is fundamentally broken, and is in decline. Matthew Ingram wrote a great piece recently on Paidcontent about why mass media is now not feasible in a world of platforms like Twitter, Facebook and in the case of local publisher localised search solutions like Yelp. Maybe the publisher needs to stop thinking like a legacy media company. Will selling more ads to big media buying agencies make up for declining print ad revenue? Not likely. It might yield single digit growth, but won't stop the bleeding. A new type of thinking is necessary here.

The local publisher needs to start thinking like the new platform businesses who are looking to own this new local marketing spend. By becoming the SME marketing platform of choice, this could well open a massive ad revenue opportunity for these media companies. Let's see if local display can think outside of the box.