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ReachLocal Pursues Offline Display Ad Dollars

 

by Kate Kaye

As media traditionalists lament plummeting newspaper and print yellow pages ad spending, ReachLocal hopes to steepen the descent. The firm has unveiled a display ad and retargeting offering for small and local businesses.

"We're going after folks who are doing this in offline [media]," said ReachLocal CEO and co-founder Zorik Gordon, whose firm takes a hands-on approach to selling Web advertising to typical yellow pages advertisers.

In pushing the new display ad product, the company is taking what Gordon calls a "top-down" approach by going after larger local advertisers. "We're trying to move dollars off of display products in the offline world," he explained. Advertisers that buy print display ads "tend to be the larger local advertisers," he continued. ReachLocal salespeople will target the "top half" of the firm's current advertiser base, representing advertisers such as attorneys and cosmetic surgeons, as well as larger heating and air conditioning or plumbing contractors.

"We don't want $100 display campaigns," added Gordon, suggesting it may be difficult for advertisers with relatively small budgets to find value in display advertising.

The company expects its current clients using its search marketing services to add display to their online ad mix through the new system, which targets display ads to users who were served a ReachLocal search ad but didn't click-through or convert. Display ads can be targeted geographically, demographically, and contextually, and the ad platform enables optimization of publisher selection, ad placement, and bids according to performance data.

However, advertisers cannot customize ad messages based on user information and interactions like some other targeting systems can. Gordon indicated such capabilities may be enabled in the future. ReachLocal display ads are placed via relationships with Google, Yahoo, and Yahoo-owned ad exchange Right Media.

Gordon considers firms like AdReady and Yahoo -- particularly through its ad partnerships with newspaper publishers -- potential competitors of the new display service. Those firms may have a leg-up when it comes to ad creative. Currently, ReachLocal does not provide creative services -- a requirement of most small business owners. Instead, the firm can only connect advertisers to creative professionals. "We have a network of folks that are more than happy to create banner ads for these campaigns," said Gordon.

Yahoo partners with several newspaper publishers; a component of those deals lets the papers sell Yahoo display inventory to local advertisers. Many newspaper firms have in-house services for building display ads. AdReady allows small and local advertisers to customize ad templates in an online interface, and determine which geographic areas and types of sites they should be targeted to. The firm partnered with NYTimes.com last year, allowing the news site to offer small advertisers a display ad option.

Gordon sees self-service as the wrong model for attracting smaller advertisers because they tend to have little experience developing ads and handling media buys. "They want to cut a check and have somebody do the rest," he argued.

Media Outlet: 
ClickZ
Publish Date: 
Thursday, February 19, 2009

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Amber Seikaly
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ReachLocal, Inc.
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