Why we built the world’s easiest self service digital advertising platform for local media.
There’s a major problem facing communities everywhere — local news is losing the competition for advertisers to the duopoly (facebook and Google). These two firms account for around 70% of all digital ad spending globally, which has forced closures and cutbacks and severely threatened the future of journalism.
It’s important to highlight that facebook and Google became the giants they are today not by servicing the fortune 500 companies to win industry awards with Madmen agencies but by turning their humble users into marketers by providing simple, transparent, self service ad tools. For a small local business managing advertising themselves on a strict budget, their loyalty to the local newspaper has rapidly been replaced by the convenience offered these oversees corporations. As a result there are around 30 million SMBs registered with pages on facebook alone.
You might ask, but can’t online ads with media be bought in a similar way using software? Kinda; currently programmatic ad technologies, which enable automated buying of ads on millions of websites that have included their inventory on the open ad exchanges, are overly complex and expensive and are therefore used mostly by fortune 500 companies or experienced media agencies. Therefore the only alternative today for an SMB wishing to buy digital ads on their local newspaper involves calling their sales reps to negotiate an order which requires graphic design services, countless emails and can take up to a week to complete. And let’s not get started with performance reporting and campaign optimisation, sometime is the keyword here, forget realtime. And all the while facebook is whispering “just turn your facebook post into an ad campaign from $10”.
Local publisher’s commercial infrastructure is not typically setup to offer self service. For one they employ sales reps, who have their own incentives; they’re not interested in commission on the $50 florist campaign, and add to that they’re often only just coming off print sales — in some cases they have even less knowledge of the digital space than their facebook savvy prospects.
But a whopping 37% of SMBs plan to increase their marketing spend! So without affordable, intuitive marketing alternatives you can guess where their budgets are going — back to the status quo; Google and facebook ads.
The opportunity
But let’s get back to the opportunity. Local news is relevant to local businesses. Why?
Newspapers are the oldest form of mass media and they have been responsible for reporting credible and thorough everyday stories and issues on a local, regional, and even global level. Local news publishers work extremely hard to maintain a positive relationships with their local community and build a loyal reader base. As a publisher’s reputation grows, the community places more trust and reliance on the news, which in turn gives a halo effect on advertising in this medium.
In Norway, research agency Respons Analyse conducted a survey among 2600 respondents and found that ads on local media had 3x higher trust than facebook. According to a research from Newsworks and the Association for Online Publishing, ads alongside premium editorial content are processed by the brain more effectively than those that appear alongside social, achieving 17% longer viewing duration and 29% higher levels of engagement.
So if we agree that value is there, what if a fraction of the 80 million SMBs registered with pages on facebook could be given the keys to digital ad buying with their local newspapers?
In January 2018 we began building such a solution.
Solo — a hybrid ad technology solution
We wanted to enable programmatic ad buying for the SMB market by innovating a smart self service layer on top of the programmatic ad technology using the SMB’s Facebook page data.
– Automated ad creation: no need for expensive or complicated graphic software.
Comparing to the obsolete display advertising, studies show that native ad format (an ad that looks like an article) is not only more visually attractive to the viewers but also contributes to 9% lift in consumers’ brand preference and 18% lift in purchase intent. In one click, Solo turns any facebook post into a native style ad.
– automated media targeting: identify relevant news sites based on preferred geo location/s.
Embracing GDPR we focused on creating premium whitelists of media sites in each country, and preferred contextual targeting by geo fencing to select the publications and filter the audiences rather than creepy behavioural targeting based on the reader’s traits.
– real time reporting to interpret success: breaking down the performance per site the ad is served on.
As the ad goes live and starts to receive impressions for the targeted sites, the Solo dashboard reports which sites the impressions are distributed on, as well as the clicks and corresponding CTR (Click Through Rate).
– automated optimizations to increase campaign performance
Behind the scenes the campaign is continually optimized for the best frequency (how many times the ad should be seen by the same viewer), time adjusted delivery (how the budget is paced over the campaign duration), price (to bid as low as possible while keeping on track to spend the budget), viewability — with the aim to keep above 70% viewable, and clicks — to get the best equivalent click price by buying at the most competitive CPMs.
Whilst leading programmatic firms like Appnexus (bought by AT&T for $1.6B-$2B in 2018) focus on offering complexity as a value for the more mature marketers they serve, Solo offers a two step process similar to facebook using automated technologies and no price barrier in order to appeal to the marketing novice and long tail segment. All the while keeping the nerdy technical stuff behind the scenes and running automatically.
Why Now?
Like with any product, timing is key for success, and we believe there are two main factors in supporting such a product’s adoption in the market:
- Programmatic ad buying online is powerful but too complex for small businesses.
Programmatic has grown to represent 28% of the global digital advertising spend and is typically employed by larger corporations and fortune 1000 brands that can afford to employ media agencies who bring the expertise needed to bid for inventory on the programmatic ecosystem. In 2017 the US alone spending surpassed $10B and is predicted to nearly double by 2020.
2. Self service ad buying on facebook is easy for SMBs but increasingly expensive.
Facebook provides a fully self service ad solution which means anyone can start. It offers targeting to more than a quarter of the world’s population, allows buying for any budget with no minimum spend and no hidden fees and can be live in minutes. facebook made $27B from ads in 2017 a revenue stream it is eating from local publishers. However the cost per ad view has been steadily increasing year on year, in Q1 of 2018 the average price per ad shot up 49%!
Competition
Solo is the only ad product to combines all three buying values in one solution:
– Social platforms offer cheap, self service ad tools but limit distribution to their apps.
– Programmatic offers wider ad distribution to thousands of news sites by automating the ad buying process but are too complex and expensive for SMBs.
– Alternatively SMBs can buy premium ad inventory by calling individual newspapers directly but this manual process takes days to complete the ad production and setup.
Encouraging results
We launched Solo in Norway in Q4 2018 and since then have expanded the service across all the nordics: (Sweden, Denmark, Finland).
Ad buying takes minute not hours
Solo customers are completing orders within 60 seconds of logging into the platform for the first time. A huge validation that it is possible to create a programmatic buying experience similar to “boost post” on facebook.
Media advertising is price competitive
Even though Open RTB (Real Time Bidding) media buying is done on a standard media model of a CPM (Cost Per 1000 views) basis, Solo advertisers are finding their campaign’s equivalent CPC (Cost Per Click) is up to 50% cheaper than facebook.
For a behind the scenes look into how we took the product from concept to launch check out this post.
What’s next?
With a digital savvy population, the Nordics has been a fantastic petri dish. Next we’re looking to bring Solo into the larger markets in Europe: the UK and Germany, and beyond that we’re interested in the US and english speaking Asia. Our biggest challenges are:
- Reaching SMBs directly is really really hard! We have had some success with mid sized agencies that either don’t have programmatic or can’t offer it to enough of their customers because of limited budgets. But we have also begun talking with potential channel partners such as e-commerce solutions, CRM, ERP, and generally trusted products with a large base of SMB customers.
- Our current DSP partner is not “API first” so we have some manual processes to fix for scale, it also only offers bidding capabilities in Europe and there is no possibility to add greater contextual targeting such as article or section targeting through keyword.
Want to help or interested in having a chat? Get in touch with our CEO: daniel (at) socius (dot) co
