Publishers should sell into fastest-growing revenue streams: search and advertising networks


It seems simple.

If consumers are predisposed to buy certain products, manufacturing companies produce them en masse, and try to catch the wave and sell a ton of them.

Likewise, if you are selling media, why wouldn’t you sell into the sweet spot of what advertisers are inclined to buy?

Search and advertising networks are the hot products today.

You’d be hard-pressed to find advertisers large or small that don’t think they should be buying search as an advertising medium. Every day a new story appears touting the importance of SEO and SEM as a central piece of a company’s marketing strategy.

ReachLocal (RLOC) was established in 2004, generated revenue of US$146.7 million in 2008, grew to US$203.1 million in 2009, and grew 44% more to US$291.7 million in 2010 targeting small- and medium-sized newspaper and yellow page advertisers with search (and display) campaigns advertisers were ready to buy. We need to respond to ReachLocal’s appeal.

In fact, WPP’s Kantar Media unit just announced that it would create a new service, and measure paid search as an advertising category. Kantar will also track keywords purchased and the number of clicks keywords receive, validating search as a very real consideration in most ad buys.

In addition, I’ve written in past blogs about the power of ad networks that gives newspaper publishers the ability to sell ad impressions “outside of their networks” with behavioural or geographical precision (targeting) either as a part of the integrated sales model or apart from it. In other words, a digital-only solution for the customer that does not include print.

Interclick (ICLK), established in 2006, is a digital advertising network that generated US$22.5 million in 2008 buying groups of Web sites for its advertisers. Interclick posted US$55.3 million in 2009 and grew 83% year-over-year in 2010 to US$101 million.

To maximise the effect of the marketing solution for local advertisers, newspaper sales organisations can marry their existing digital product portfolio with search and network display ads.

This is exactly what ReachLocal does in selling against newspapers.

The point here is that newspapers have to grow revenue at these rates to not only reduce the downside of print declines, but to remain competitive with digital marketing companies now operating in local markets. Publishers also have a unique opportunity to support these sales models by capturing audience data to bring more targeted media campaigns to client partners.

There are several competitive advantages of adopting and supporting these sales models:

  • Selling premium inventory on your own Web sites that ad networks can’t buy (unless the newspaper allows them to).

  • Ability to effectively bundle a range of digital products into a cohesive campaign that includes the “out of network inventory” beyond the newspaper's dot-com reach (this could be display, e-mail, mobile, and so on).

  • Data from user behaviour that builds a foundation for more effective digital ad buys and higher advertiser retention levels.

This is one example of how publishers might approach the challenge of transforming legacy sales organisations and achieving revenue growth.

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