Navigating the New Landscape: Strategies to Elevate CPMs Amidst Declining Programmatic Revenues

This article appeared first on inma.org

Falling budgets

Budgets that big national advertisers and especially e-commerce giants are spending in digital and programmatic are falling as the end of the “Corona bonus” has stalled the growth of many rising stars. Stock market valuations have plummeted and lots of ad-hoc messages show the trend of astronomic 2021 e-commerce growth rates not being a sustainable trend but a one-time effect.

Don’t get me wrong: e-commerce will grow. E-commerce will have a great future and Amazon is on the best way to world domination. But: for many of the big fishes behind Amazon, the outlook became more realistic.

For lots of publishers that mean dealing with reduced CPMs – especially in the programmatic campaign when the overall notion of “buy revenue at all cost” starts to vanish.

New opportunities

But the good thing is that there’s still one group of digital advertisers that can make up for this loss in CPM … while even making readers happier than being hunted by products all over the internet they once watched in an online shop 10 days ago: I am talking about “Local advertisers”.

Local advertisers are the most underserved segment of online advertising as they …

• … are hard to sell to due to their lack of digital advertising experience
• … are often not profitably to sell to due to their small budgets of only 100$ for a digital campaign
• … are often not able to buy due to a lack of proper banners and landing pages‍

Confusing amount of options with many publishers to book a simple online ad

Assessing the opportunity

The good thing: This can be solved, and the potential return is high:

• While a typical programmatic campaign cashes in $2 to $5 per 1.000 impressions,
• A local campaign can easily make $15 to $20 per 1.000 impressions.

Why?

Because local advertisers need more service around the ad that has to be paid and they just lack the negotiation power a 100.000.000 ad impression direct customer has with publishers and the programmatic network. And: it is direct sales and no intermediary that takes away from the publishers’ revenue.

Execution is king

Execution is kind at getting small local advertisers to buy digital campaigns.

Challenge: how to transform smb print advertisers like this into digital display campaigns

The simplest way is to define a set of print advertisers that from now on should receive online equivalents of their print ads – e.g. based on the print budget (“every print advertiser <$500” or “every print advertiser <1/2 page”).

Each of those advertisers should receive a set of banner/landing page plus a fixed amount of regional ad impressions (e.g. 5.000 for $99 in 1 banner format). This first step is crucial for getting a simple and scalable sales model without too many options that sales reps can sell in less than 5 minutes.

The second step is to automate the delivery process. Optimizing the sales process is step one and secures efficiency and margin but starting with individual briefings and feedback loops from there would immediately wipe out all profits for a $100 campaign.

Services like Smartico offer to build banners + landing pages directly from PDFs of the print ad including all data from the print ad, as well as additional information from the homepage, social media profile or Google Places entry of the local advertiser. Without the advertiser or sales rep having to deliver any additional information.

Creatives: nice banners out of print data enriched with web data about the advertiser – here in a carousel ad

Smartico offers its service paid “per ad” and can be run as a “profit centre” from day 1. Additionally, its service offers reporting dashboards for each and every print advertiser focussing on “time spent on the landing page” instead of cryptic “click-through-rates”.

Cases from many newspapers – with and without Smartico – show that local loyal longtail print advertisers are still a huge untapped business in digital for most regional publishers that can easy make $100.000s of new revenues per year.

Schwäbisch Media from Ravensburg in Germany introduced an automatic bundle to all its small ads in weeklies and its daily newspaper which now makes them $300.000+ profits per year. Feel free to reach out to get the full case study of them (cs@smartico.one).

Be bold with your loyal print advertisers and offer them – as well as your readers – as solution they want for digital advertising: full service and high-quality niche ads instead of the same national campaigns on all platforms. High CTRs show how well readers appreciate those local exclusive ads (even behind paywalls).

Print advertisers need different KPIs to be reported than CTR. Attention on the landing page in terms of “minutes spent” is a great example of that.

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