ionadas local LLC

DirecTV to Offer Geo-Targeting

DirecTV has announced that starting in 2011, advertisers will be able to deliver commercials based upon the location of the viewers set-top box. Prior to the release of this service, satellite signals could only target large regions of the globe. A typical targeting might be the eastern or western half of the United States.

While this remains well shy of the targeting we enjoy with Internet advertising, it’s a big step in the correct direction, and should at least bring DirecTV in line with the cable providers.

Yahoo Continues Push for Local Display Ads

According to WebProNews, Yahoo has added five papers to its Newspaper Consortium. The entrants include the Orange County Register, the Gazette in Colorado Springs, the Record and Herald News, and the San Diego Union-Tribune.

The Yahoo Newspaper Consortium is made up of 814 newspapers. The papers receive access to Yahoo’s contextual advertising, paid search and web search products, as well as sales training.

While the challenges the newspaper industry faces are still imposing, at least they’re trying something different by working with Yahoo. And by working with the number two player in the online advertising industry (rather than working with industry leader Google), they likely retain a much larger share of the revenue generated.

As these offerings and relationships mature, they may turn into a highly valued channel for the local advertiser, who often had all too few ways to reach targeted prospects online.

Local Ad Dollars Move to Search

Advertising dollars for local businesses are moving from traditional vehicles such as radio, newspapers and television to online vehicles such as local search, according to an article by MediaPost. While the recession certainly accounts for a great deal of the decline of the traditional vehicles, a non-trivial portion comes from the specific weaknesses of those vehicles.

While radio, newspaper and television are powerful tools for reaching large numbers of potential customers, that reach comes at a high cost and with very little audience targeting. Search and other online marketing, however, can be targeted to a very discreet level, and generally have minimum purchases at a fraction of the amount of the traditional ad vehicles.

At ionadas local, we certainly expect to see this movement of local ad dollars online to continue.

AOL Adds Heat to Local Marketing

The local marketing industry is certainly heating up, with AOL announcing the acquisition of a paid of locally focused companies: Patch Media and Going. Patch Media provides local news and information, which Going is more of a social network, allowing people to share information about cities and destinations.

These will be added to AOL’s current local properties MapQuest, CityGuide and When.com. Together, they provide a valuable channel for national advertisers to reach into geographically targeted markets.

It remains to be seen whether this will provide any opportunity to true local advertisers. Traditionally, AOL has had minimum commitments beyond the reach of smaller businesses, and a sales force that doesn’t know how to deal with them.

Economics of Search Marketing

Early in June, Borrell Associates published its “Economics of Search Marketing” report. It discusses some of the challenges of search marketing for small businesses, both for the advertiser and the service provider.

One particular quote stood out to me:

This [margin to the service provider] changes with the higher levels of spending by the advertiser. Our model, based on interviews with advertisers and resellers, indicates that at the highest levels of spending – above $50,000 per month – an advertiser will see 89% to 94% of the expenditure applied toward keyword purchases. Conversely, those spending the lowest amounts see less than half their dollars used to purchase keywords.

These numbers certainly agree with what I’ve seen in the industry, and they bolster something I’ve been saying for years: if you’re company or market do not support a budget of at least several thousand per month, you’re better off not outsourcing your paid search campaigns.

Outsourcing of marketing campaigns results in increased overhead and expense. If you’re spending $5,000 or more per month with Google, Yahoo and Bing, it might make sense to avail yourself of the expertise a paid search agency can bring.

However, for many locally focused advertisers, the keyword volume for your market might not support a budget of more than a few hundred per month. In these cases, the overhead of outsourcing the paid search management makes doing so not viable.

You need to manage the campaigns yourself, although training and outside assistance might be needed on the front end.