Flourishing at the Margins of Local-Market Omnichannel Advertising
Legacy media businesses have been under increasing pressure since the advent of the modern internet in the 1990s. Once secure with healthy margins on their advertising inventory, media companies have since been forced to adapt to an audience that has fractured across a proliferation of channels and advertisers that are no longer content to spend money without some form of guaranteed return on investment.
For legacy, local-market media companies, omnichannel advertising has come to the rescue. By selling their own owned-and-operated inventory as part of a comprehensive package that includes digital extensions, legacy media companies can appeal to the advertisers that want to reach digitally savvy consumers while still maintaining their core business of selling space in their own newspapers, radio, and linear TV networks.
Moreover, omnichannel advertising works, especially for local-market advertisers. When viewers see an ad for the same product on different screens at different times and contexts, they are more likely to make a purchase than if the campaign had appeared on a single channel.
Local-market media companies, in turn, have made a priority of selling comprehensive omnichannel packages that include their own inventory alongside open-web banner ads, streaming video, audio, out-of-home and more. Advertisers want performance, and media companies must deliver it one way or another.
The problem facing these legacy media companies is that they want to maximize their margins; they naturally make far more money on their O&O inventory than they do selling ads on behalf of Meta and Google. So, what does it take for media companies to be successful selling omnichannel campaigns that include digital extensions?
Automation: The Key to Success
To make money selling omnichannel campaigns, media companies need software that can wring every measure of efficiency out of every part of the process. That means automating sales, planning, execution, reporting, and optimization. A robust database and modeling engine can automate media planning and execution to fit an advertiser's objectives while diminishing the need for intensive in-house resources and manpower.
Put another way, thin margins on omnichannel campaigns can constitute a slow bleed if you're not careful. To make money on extensions, efficiency is the name of the game, and it's only possible if the right technology is squeezing every last cent out of every digital transaction with minimal inputs.
There are two additional things to consider when viewing the overall picture: First, an omnichannel approach to local-market advertising allows legacy media companies to own the relationship with their advertisers.
Instead of sending a prospect to do business directly with agencies or DIY tools from Google or Meta, the local-market media company can offer a real relationship and audience understanding for their local-market advertiser while still providing all the benefits of digital. By giving advertisers a "one stop shop" for all their advertising needs, local-market media companies can strengthen loyalty and broaden their appeal.
Second, an omnichannel approach helps media companies sell more of their owned-and-operated inventory. If your omnichannel campaigns are offering greater return on investment than your competitors', you're going to do more business, and that business will necessarily involve your highest-margin product.
Legacy media companies can be understandably wary of the threat posed by digital advertising and its accompanying technological bells and whistles. Whereas the digital ad market once constituted a patent threat to legacy media, it now offers the most viable path forward for a challenged industry.
People's viewing habits are changing, and they're spending more time with digital media whether media companies like it or not. The companies that recognize that fact, adapt, and embrace it will be the ones that flourish in an evolving market.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Oliver Jacob is co-founder and president of Frequence.