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Local Ads: Social, Digital Offer Low CPMs, Lowest Barrier of Entry

Published on March 28, 2012

Local TV stations are integrating with advertisers, and extending their coverage and conversations with viewers, through social media, reports Ad Age. The magazine was reporting from the American Association of Advertising Agencies (AAAA) Transformation Conference in LA, and on a panel called “Socializing Local TV.”

As an example, President Valari Staab of NBC Owned Television Stations described how Facebook helped a local NBC affiliate dominate coverage of Hurricane Irene in its market. Viewers engaged about the hurricane on the affiliate’s Facebook page, which provided enough content and interest that the station’s news broadcast went on-air live at 3 P.M. versus 6 P.M. “We slaughtered our competition on the coverage,” as Staab described.

Local advertisers can benefit from a station’s social extensions, remarked panelist Dunia Shive (president-CEO of Belo Corp., a Dallas-based owner of 20 broadcast stations and two cable stations). Still, Shive believes the connection between advertising and breaking news is tenuous. Belo plans to introduce a mobile streaming product later this year in 32 U.S. markets. " We'll have to see how consumers react to that launch and how content is used, and then build digital-ad opportunities,” said Shive.

Local advertisers will likely latch on, for the lower cost-per-thousand (CPM) impressions alone. Local ad spending fell 2.4% in 2012, according to analyst group BIA/Kelsey. The group expects local advertising to bounce back this year, and continue through 2016 with a compound annual growth of 2.6%. BIA/Kelsey chief economist Mark Fratrik told Media Life that “Online/interactive/digital probably wasn't hit as much [in 2011] because it's new and exciting and it tends to be lower-priced CPMs…There's sort of a movement from higher-priced media to lower-priced media.”

The good news, according to Fratrik, is that smaller and medium-sized local businesses can now afford digital and interactive ad vehicles. He raised the example of a plumber in the suburbs who can taret paid search in a 12-mile radius, which newspapers find difficult to do and local TV finds impossible.