I’ve been experimenting with putting ads on one of my local media sites. Last week, I wrote about my experiment of putting ads on Boca Digest. As you would have expected, the ads aren’t providing much return.
There are two reasons for this. For one, Google ads generate about 2 cents for 1000 visitors, which is terrible. But I can’t blame it all on Google, as I haven’t worked on the site in over a year and it gets very little traffic.
So my experiment is ending in failure.
But I’m not ready to give up. There must be a better way to monetize local media.
There is a future in local media. I know it. Here’s why…
- We need it – Everyone lives somewhere and everyone wants to be connected to their community.
- Search opportunity – Google loves to reward local. The “news” section can drive tons of traffic to local sites and there are great opportunities for local-based articles such as “best burger places in *insert city here.*
- Enjoyable content – Who doesn’t like reading stories of local business owners or local events?
Okay great, so we know there’s an audience for local, but we also have seen this movie before. Facebook killed newspapers. Social media destroyed advertising. It’s no longer sustainable.
So what are the options?
A few weeks ago I discovered a company called Whereby.us. It’s a media platform that owns 5 local media sites.
I read on Crunch Base that they raised a little more than $2M and that they were also profitable with 30% margins.
How is this possible?
I found the network of their local media sites and I started obsessively researching.
Like I said, they own 5 websites.
- The New Tropic (Miami)
- The Evergrey (Seattle)
- The Bridgeliner (Portland)
- Pulptown (Orlando)
- The Incline (Pittsburgh)
I looked at their entire portfolio of websites, and I didn’t see any advertising on them. I did see a subscribe button but generally speaking, a subscription wouldn’t produce revenue results that would generate a 30% margin.
I needed to know more. How are they monetizing?
I figured it out.
Whereby.us created their own self serving ad platform. The ads are served on a morning newsletter. They created a solution to their own problem and now they are bringing the product to market.
The product is called Letterhead.
Letterhead is a self serving ad network which allows local business owners to buy their own ads. With letterhead, advertisers can literally shop for different advertising packages.
In addition, the advertiser can generate their own ads and insert their own copy with a simple UX that walks the buyer right through the process. Letterhead than creates a widget that inserts that ad directly into the daily newsletter.
The reality is that newsletters provide much better advertising than websites.
The audience is much more direct, so a newsletter ad will almost always generate better results for the advertiser, especially in terms of clicks and conversions.
Moreover, the content creator can charge more because the ads perform better.
If Google adwords can generate 2 cents per 1000 pageviews, email ads can generate $45 per 1000 pageviews. What a drastic difference.
Here’s an example.
On The New Tropic, which is a blog / daily newsletter all about Miami, there is a store where advertisers can shop around for different options. So if I owned a local business in Miami, and I wanted to buy an add, I can simply go to the “store” and purchase my own package.
Let’s say I wanted to buy a single ad, (the first option) I would click the “buy” button, and then the program would walk me through the process of creating my ad and I would pay for it directly through the software.
The software would also provide me with a backend dashboard so I can see how many clicks and impressions my ad received.
No sales reps. No paperwork process. No back and forth with the design approval of the banner ads. It’s direct to consumer advertising for newsletters.
It’s brilliant. I love it.
My Conversation with Chris from Letterhead
I had a great zoom call on Wednesday with Chris Adamo, who is head of sales for letterhead. I’m excited about what they are building and I’m going to give letterhead a try.
First, I’ll use it for Boca Digest. That site has a small email list, but Boca Raton is exploding with growth. I lived in Boca / Ft. Lauderdale for 10 years and I know it is a vibrant community with lots of support for local businesses. I think there’s a huge market there.
If it works, I will see if I can make this happen on YourBoulder as well.
I also had a short conversation with Chris about the opportunity to invest in letterhead. Obviously I need to learn more, but I don’t see any reason to think that local email newsletters won’t continue to grow.
It’s a great solution and from what I can tell, a great company.