Lets discusses the importance of obtaining cost-effective banner designs and creatives for scaling local advertising with small and medium-sized businesses (SMBs) and acknowledge the price sensitivity in this industry, particularly during the pandemic, and recognize the need to keep creation costs low in order to achieve a viable business model and return on investment.
the cheapest creatives to scale local advertising in the long tail advertising with SMBs.
I am fully aware of the price sensitivity in this field, with low budget campaigns and especially now in the pandemic.
And yes, I do get that there will be only a business model and a return on investment if I can get the costs of creation low. And that’s the reason I wanted to go through the main possibilities, how to build those banners at cost, that I saw with various publishers across Europe and other regions.
So obviously, the first one is doing it internally, but I probably do not need it to tell you anything, that this is probably at the highest cost. You have to have the people, you have to train the people, you have to give them the right software. So it’s internally with the existing tools, and existing tools in a lot of cases just means Photoshop. It’s obviously not a choice to scale local advertising, where I need to push out hundreds of ads per week.
So the only thing that I saw here that might be an option is really to go for the sales service tools like Bannersnack, where you can add templates and then work from the templates, but also, the price for the tool itself has to taken into consideration but once again, it’s the internal costs and even more important, what I see for a lot of the times is that we have to take consistency into consideration, because a lot of the times, there are one, two or even four people in the team that can do those banners at high quality and at high speed, but it’s usually not that all the team can do it at the same quality. Especially if you take into consideration that those self-service tools usually need some training, need some creative talent and need some high affiliation with those tools and they need some time to get in there.
Students & Freelancers
So second option that I saw that that were good for a lot of publishers is really going to students and freelancers. There are some amazing design students out there that can do amazing banners. And sometimes, as there are students that just looking for a job, they can do it at amazing prices. The downside of that, what we saw is once again the consistency. So not only that not every design student can do the same high quality of banners, but it’s of course that they do a very different design style or they just use a very different code. And that leads them to situations where one local advertiser wants to have the banner in the style that he saw it from the other advertiser, but you can’t reproduce that because for example, this student already left or the student is currently not available.
First thing, the student already left could also be the second big downer for the student and freelancer solution, because we have a higher turnover. So students are leaving. Students are changing jobs. Students are constantly on the move and that makes it much more difficult if you try to push out hundreds of ads.
And third is really SLAs. So Service Level Agreements. Can I really guarantee that my students and freelancers are available each and every day that I really need them? And then they can guarantee me a turnaround time of 24 hours, of 12 hours, whatever I need to have high speeds of those long tail SMB ads? So that works, but I personally would always say, as well, the self-service tools as the students and freelancer, I would rather use them for not really key account campaigns, but higher volume or higher budget campaigns.
So then it’s really worth to potentially do a feedback loop, because as you can’t guarantee the consistency, you have to do a feedback loop, because models that really in our experience are crucial for the success and the profitability of those long tail SMB campaigns is not having a feedback loop. And you can only not have a feedback loop if you really manage to have the highest possible consistency. If it’s not only working about templates, but if each and every ad looks good and each and every ad, no matter what the source material was, is a success for the local advertiser. So that is why we are usually a little bit careful with suggesting to go for students and freelancers or the self-service tools when it comes to long tail advertising.
Various Types of Agencies
The alternatives are definitely agencies. So on one side, the real web agencies on the other side typesetting agencies, often coming really from the print side of the business. That really depends who you have in your area. It might be that there is a certain degree of trust and you want to build on that. That is totally fair, but usually from our experience, there’s still the price argument. So what can I really pay per banner? Is that really less than I could do internally? Is that really less than I can do with students and freelancers, but yes, I definitely have a lower overhead and that’s the biggest advantage. I just go there and say, Okay, I have an SLA, I want to have 100 ads per week at a service level agreement of for example, 24 hours. And then I can hit a very high probability get that. But you really, once again have to see, are they solving the problems that you would have internally? Can they deliver the consistency? Can they have low turnover of people and can they deliver the prices?
With all of these options, we saw that there’s always a few big buts. So why does that not work for a lot of publishers that we saw and why did a lot of publishers that we saw change the model of how to build those long tail displays? So first of all, a lot of those publishers started looking really at the full cost and the full cost is not only the price per creative, per banner or per banner set, it is really the full cost, including the campaign management. It is often, and this is also one thing that you need to keep in mind when you’re looking at agencies. It’s a lot of the times, the integration efforts. So the one time efforts, but also the running costs, which is not only campaign management, How do I get this in my ad server? But it’s a lot longer, How do I get the briefing of advertiser to the agency who is communicating in cases of feedback loops.
Then you have those feedback loops. The feedback loops do not necessarily directly go to the agency, but they go via the sales reps. And then you get additional costs that the sales reps don’t have then the time to do sales because they have to go through feedback loops about colors and pattern designs. So that’s what we really saw that the full cost is much, much more than just the price per creative.
And then there is one big thing that a lot of the publishers that started with very ambitious programs, even with technology, where they really not only work with web agencies and typesetting agents, but really build internal tech teams that build a solution where they had a self-booking tool themselves or where they had a self-service tool themselves, they ended up not being able to solve one crucial part of the equation. Not only the consistency was crucial, but also the landing pages, because if I click on a banner and I have great click rates, but the landing page, so the entry page into the advertiser’s world is just not optimized for devices, it’s just not optimized for any call to action or just is not interesting to do any action, it is very difficult to sell the advertiser a success.
And it’s not only that I have a difficulty explaining him the success of his campaign, a lot of the time he will proactively say, “Okay, is the success of my campaign,” if I’m a restaurant, if I’m a car dealer, “The number of visits you bring to my website or isn’t it rather the number of people calling me the number of people, knowing about the special offer that I have out there?” And this is something where we believe that we have to control the landing page. And this is something that was really a game changer for a lot of other publishers out there that we talked to, because it’s suddenly not anymore about the creative, it’s about attention.
The landing page is the holy grail of sales success with local clients
What do I create via the landing page? How many minutes of attention? What do people do on the landing page? Suddenly, it’s not anymore about the click rates, because one thing we definitely are not allowed to forget, if I’m selling a campaign to BMW or another big company with huge digital budgets, they definitely know that 0.2 or 0.4% of a CTR is a great result, but the local advertiser just hears 0.2% and says, “Wow, that means 99.8% didn’t click. Wow. That is a bad targeting. This is not the right thing to do for me.” Because he expects in print it was like 100% watched his ad, because that is something that we are at least allowing to be understood that way. So that is something that makes it difficult for a lot of local advertisers to buy local ads, because they say, “Okay, I’m not in the business of making more visits to my website. I do not understand the CTRs and the overall business model is super complex for me, CTR, CPC, CPM and targeting options. And I’m just not doing it.”
What we saw, what really worked is then besides the things, consistency with the creatives, building a own landing page and changing the narrative, like telling about attention on a landing page while controlling the landing page, instead of just saying, “I send you the click, you have to take care of the click,” is really then looking at the whole business model, not asking, “What is the price per creative?” But looking at the whole business model.
So that means a) full cost, but b) it means, what is my revenue that I’m additionally making? If I really manage to upsell, not like I’m doing it right now, 5 or 10% of the ads into real digital campaigns because a lot of the advertisers are just not open and a lot of the sales groups can’t sell it, but if I can really sell it to 50, 80 or a 100%, I can really auto bundle it. Then I have a chance to have a much higher revenue, even if it’s now just 50, 100 or 200 euros per campaign, but if I can really scale this up to hundreds of ads per month, then I really get a much bigger, absolute number of revenue. And if I then pay 20 or 30 euros per ad, ideally plus landing page, instead of another case, perhaps only 5 euros without full cost, it’s a much higher absolute revenue if I’m only selling 10 of those ads, but I’m having the people around all the time because I’m doing it internally.
What is more? 50 times a 500€ campaign or 500 times a 100€ campaign?
Besides, I have a fully scalable, fully volume-based model, including landing pages and I’m just really doing it at scale. So in having done the business model, it gives an absolute high revenue, but it’s also a business model that’s sustainable for a lot of sites because I have a still high CPM. If I’m selling a 100 euro campaign at 5,000, at impressions, I have a cost of whatever, 20, 30 euros of creation, full cost, including everything, including my integration into the ad server, I’m still making 15 euros of CPM. And there are not a lot of programmatic and not a lot of big national, shiny campaigns out there that can match that number. And that’s really the beauty of this local long tail advertising. If I nail it, if I’m not putting all the overhead into my company and if I’m really managing to put consistency and good landing pages in check.
So on what we then learned, if I really build a very simplified product for the small and medium-sized enterprises, I can really tease them later for bigger campaigns. They don’t need to build the 100 euro campaign as the last thing they ever did. It’s rather that it’s a teaser for much more to come. Yes, with the 100 euro campaign, they have a landing page included. They can’t change it, but if they want to have a different format, if they want to have a different landing page, they can always book a 500 or a 1,000 euro campaign. And it is really great teaser.
Tell better stories and forget about CTRs for SMB advertisers
And last, but at least, it really helps to tell better stories internally and externally. So internally, for the sales reps that always said, “I can’t sell online because it’s also overwhelming for me, all the complexity of formats, of targetings, et cetera. But now I can tell a story of attention. I can tell my local advertisers how much attention do they get on the landing pages.” And also externally, because the advertiser has something that he can really relate to instead of having just pure CTRs.
Profitable Overall Revenue is crucial – not Revenue per Customer at High Cost and Overhead
And if I nailed that model, the result that we saw is basically that the price per creative is not the crucial part of this business model, of this return on investment calculation. The crucial part is really, how can I scale the number of ads that I’m selling? And if I can do this hundreds of times and make only, let’s say in the example of a 100 euro, a small-sized campaign. If I only do 80 euros of profit or contribution margin per campaign, but I can do this a 100 times, it’s much better if I can only do it five times, but I have 90 euros of profit. Or I do it 200 euro or 500 Euro campaign, and I have a higher profit, but if I can do this hundreds of times, this is really the matching of the model.
Consistency, Operations and Motivation
And this only works if you can nail consistency, no overhead for your own organizations and really evangelize your sales reps, each and every one of them to suddenly being able to sell a great online campaign, that their local clients will say, “Wow, that really worked for me. That was a cool campaign,” and they don’t end up in just saying, “Oh, 0.2% click rate is 99.8% that didn’t click.”
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