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Jan. 31, 2022, 12:45 p.m.
Business Models

The Ad Lab experiment created an advertising network for independent media. Here’s what we learned

“Of the 16 publishers who participated, four will receive checks of $1,000 or more. The average was $562.50 per site, although some with little digital traffic got substantially lower payouts.”

The Center for Cooperative Media at Montclair State University has served as a central connection point, a hub, for New Jersey journalists for 10 years.

And in nearly every one of those years, the top request for support we get from independent local news organizations is for advertising help.

For years we’ve been asked for help selling ads. Many small hyperlocal and community media organizations don’t have ad sales staff, and their audiences aren’t attractive to regional or statewide advertisers because of their size.

That’s why we launched the Ad Lab for members of the NJ News Commons. The Ad Lab was intended to create an advertising network among independent media organizations across New Jersey, and to provide a shared sales representative to sell ads for the network.

Creating the Ad Lab

The Ad Lab was supported with a $30,000 grant from the NJ Local News Lab Fund, a partnership of Democracy Fund, the Geraldine R. Dodge Foundation and the Community Foundation of New Jersey.

Full disclosure: It took us a long time to get the Ad Lab off the ground. Setting up this kind of network and getting all the partners on the same page can take a lot of time and be complicated. We started with meetings among potential partners in 2019 and moved forward in fits and starts, but paused the work when the coronavirus pandemic hit in early 2020.

In 2021, the Center restarted Ad Lab conversations and eventually decided to work with Broadstreet, an advertising management company based in Red Bank, N.J., that works with hyperlocal news organizations across the U.S.

Broadstreet attempted to build an advertising network in New Jersey years ago but wasn’t successful. To be sure, Kenny Katzgrau, Broadstreet’s founder, was skeptical when we first approached him but was willing to give it a shot.

To get going, we recruited a couple dozen news organizations that were interested in the Ad Lab experiment, including two that published in a language other than English. Broadstreet proposed doing some basic training on digital ad sales with that cohort first, then splitting the rest of the money between hiring a shared sales professional and paying for infrastructure and consulting.

Launching the network

The digital ad sales training included eight hour-long modules, covering topics including pricing and packaging, CRMs, outreach to potential sales targets, running successful sales meetings, writing proposals, closing the deal, and handling renewals. Participants got access to resources including a media kit template, a proposal template, and an advertiser case study template.

When it came to setting up the network, Broadstreet knew from previous experience that they would be working with mostly small publishers who were busy and could be difficult to stay in constant contact with. Also, the variation differed wildly among all the participants when it came to ad inventory, site traffic, technical ability and more.

To mitigate those risks, Broadstreet did all of its communication via one group email thread. They also decided on standard, pre-set inventory — they chose big leaderboard and top sidebar positions — and handled all the setup and ad delivery. Broadstreet sold on a CPM basis (aiming for $10-$15 CPM in increments of 100,000 impressions, although additional impressions were in offered in some cases to win a sale) to ensure fairness, focused on regional advertisers only, and insisted that if an ad was sold, all sites had to run it. Streamlining and standardizing were critical, Katzgrau said.

The other key was hiring a top-notch sales professional. We were lucky to get Annette Batson, a talented sales professional who is well-known among local news providers in New Jersey, to take on the role.

The results

Annette spent 5 to 8 hours a week selling for the network in the fourth quarter of 2021. She closed six sales for the network, bringing in $9,000 across 16 publishers.

It helped a lot that Annette had immediate contacts she could pitch to. We had few complaints from publishers about the sales or the ad placements, and generated strong results for the advertisers. A total of 1.4 million ad impressions were served with 0.1% click rate across all placements and more than 90% viewability (70% is more typical for the industry).

Of the 16 publishers who participated, four will receive checks of $1,000 or more. The average was $562.50 per site, although some with little digital traffic got substantially lower payouts.

It would have helped the network to have more than 16 publishers participate, and to expand the geographical coverage. In addition when a news organization makes a change to its website, it can affect the ad tags. We were also at a slight disadvantage selling only in 4Q, as many regional advertising budgets are set at the start of the year. Having a website where the sales sheet could live would have helped, too.

Nevertheless, the Ad Lab was clearly successful and could even be a pilot model for local newsroom across the U.S. Broadstreet estimates that a full year of investment — including a full-time sales representative paid mostly via commission — could turn as much as 10–15% profit for the network. That includes covering the costs for some overhead such as fixing technical issues, communicating with publishers and bookkeeping.

“Launching during Covid presented obstacles, yet the concept of this advertising model prevailed,” Batson said.

Stefanie Murray is director of the Center for Cooperative Media at Montclair State University. A version of this post originally ran on Medium.

POSTED     Jan. 31, 2022, 12:45 p.m.
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