Local Advertising Delivers Better Performance Than National Advertising

May 9, 2018

A small publisher’s greatest asset is the ability to deliver value. The definition of value may change from advertiser to advertiser, depending on the goals of individual campaigns, but the ability to deliver better performance than larger publishers is something that local magazine and hyperlocal publishers should always have in their back pockets.

For many advertisers, delivering value means generating leads. Other businesses are looking for branding or product awareness or even increased customer retention. The articulation of business objectives is necessary in order to design an effective advertising campaign, but particularly in the digital world, where publishers have so many packages and advertising options to select from.

Here at Broadstreet, we have benefited from having an up close look at the way local publishers provide value for advertisers. After studying two-years worth of data, we were able to determine that smaller publications yield higher engagement rates for ad campaigns than larger publishers. Engagement rates increase even more when great placement and a large, dynamic, or informational creative is used in the campaign.

Publishers on Broadstreet see click rates of 0.5% or more, even for lenghtier campaigns. They see greater engagement rates than large networks, as well.

Click rates and engagement rates matter because they help us define value as it relates to digital advertising campaigns. Local advertisements perform better — we know that. The next logical question is why that is.

Why do advertisers see better results when they run campaigns with hyperlocal publishers than larger publishers?

The answer is simpler than you might think. Local advertising performs better because users who see the ads are legitimately interested in local businesses. The small business owners advertising with local magazines and hyperlocal publishers are community members first. People in the community know the owners of these businesses, and because of that, local advertising isn’t just something to “look away” from. It isn’t something that people quickly scroll past, either.

Local advertising gets 5x higher click rates, on average, because readers who see these ads are invested in the success of small, local businesses.

In the local publishing world, clicks and engagement are worth more than impressions. Small publishers who don’t understand that are missing out on the intrinsic value they bring to advertisers, and they may be selling themselves short.

Scale isn’t necessary when you deliver higher performance than a large network. If local magazines or hyperlocal publishers are delivering 3-5x the performance of large ad networks, then that has the effect of 3-5x more impressions than the advertiser is being charged for.

Let’s break this down and look at the cost for a business running the same ad creative on two different platforms.

• The business agreed to pay the large network a CPM of $3, and its ad received two million impressions and 2,000 clicks, which means the advertisement had a 0.10% click-through rate (CTR). For this, the business paid $6,000, or $3 per click.
• The same business agreed to pay a small publisher a CPM of $10. Although the ad received just 500,000 impressions, it still had 2,000 clicks, which means the advertisement had a 0.40% CTR. For this, the business paid $5,000, or $2.50 per click.

The advertiser in this scenario paid $1,000 less for an ad that saw the same number of clicks. Not only that, but because the ad ran with a hyperlocal publisher, the people who saw the ad were much more likely to be local consumers.

Yes, these numbers are complex. We understand it can be a challenge to help small business advertisers understand the value in local advertising. But that’s one of the reasons why we recommend smaller publishers use flat-rate pricing based on the number of views their websites get each month.

The local publisher’s greatest advantage is the ability to deliver value. Too many publishers are underselling themselves under the false assumption that they need to achieve scale in order to succeed. That simply isn’t true.

If you’d like to learn even more about how small publishers can harness their strengths to increase digital ad sales, be sure to check out our free eBook, Ten Advantages: How Magazine and Hyperlocal News Publishers Will Win In the Era of Facebook and Google.