Advertising Resources for Local Sites: InstiAds

Posted on 12. Jan, 2011 by in Revenue

Interviewed by Jennifer McFadden

Describe your product/service.
InstiAds is an easy-to-use, self-serve ad buying and management toolset that can be used on any platform. It was designed especially for small and local businesses.

How can Instiads help local publishers?
The cost of advertising sales is extremely prohibitive to local publishers, which are often small, extremely focused operations. Instiads makes it possible for a one or two-person team to generate sales, manage advertiser campaigns, and handle billing while continuing to run the day-to-day content and news-gathering operations. Self-serve isn’t magic – there are still *plenty* of opportunities to talk directly with your advertisers – but it reduces the cost of sales to a sustainable level. We also have engineered our service to be extremely network friendly. In fact, you could use Instiads to build an advertising network in a very short time.

How do you simplify the process of advertising online for local businesses?
The simplest way for a local business to buy an ad would be for them to call up the local publisher, talk through a rate card, and hand over a credit card number. We’re not that simple! But we do turn the transaction of buying an ad into a step-by-step process that leads a local business advertiser from a menu of available inventory right through the creation of an ad using an image provided by the advertiser. Our goal was to make it no more complicated to buy an ad on a local blog than it *used to be* to buy an ad via Google AdWords. Google has since made many changes that cater more to big agencies than small and local businesses. This has over-complicated the transaction process.

Who is currently using your product?
Our biggest success has been the deployment of Instiads to create the Seattle Indie Ad Network. More than twenty Seattle area news sites and local blogs, using a variety of publishing platforms, have created a combined inventory pool that allows Seattle advertisers to reach a substantial local audience. Some of the sites include: Pubicola, My Green Lake, Wallyhood, and Seattle Transit Blog.

How can local publishers increase revenue on their sites?
First: Optimize your own inventory and use an ad-serving technology capable of advanced serving, even if you sell only flat-rate placements. Join and create networks.

Second: Join and create networks. Creating a secondary flow of revenue – especially one that is traffic sensitive, i.e., you make more when you have more visitors – is one of the few opportunities we’ve seen work beyond the first tier of simply selling your own site inventory.

Who are your primary competitors? What value do you provide that makes
Instiads a better solution?

OpenX and Google Ad Manager are widely used. Of the two, we’re most similar to Ad Manager, although that system does none of the self-serve on the buy side (yet!) that we do. We’re a much simpler “installation” than OpenX – our system isn’t about massive amounts of flexibility and integration with back-end coding, etc. We’re a service – if you want Instiads on your site, you create an account, set up a couple inventory positions, and add the javascript widgets to your site template where you want the ad to appear.

What is your revenue model?
We share revenue on any credit card transactions in the system – our share is 20 percent. Revenue shares are a funny thing when you’re talking local publishing. I talk to a lot of people worried about 20 percent of zero. I understand it. From what I’ve seen, though, you have to have a solution more advanced than sticking a bunch of graphics in a page and then trying to collect checks. You don’t have to use Instiads, but we think the value is a fair trade and, frankly, we’ve pounded it down as low as possible to the point where the share is mostly about covering credit card transaction costs and technology fees for serving.

How does a local site implement your products?
Sign up here, create some ad positions, cut and paste the javascript widgets in your site template, profit.

What is your outlook for the local advertising marketplace over the next 2-5 years?
There remains a massive underserved market of businesses that “don’t advertise” – we think one of the biggest reasons they don’t is because there really haven’t been a lot of sites that have good ROI for the locals. As new sites and services are created to give local advertisers a good audience to reach, we think that will drive growth. Not just display advertising, but every type of marketing – even search.

We’re also seeing a mashing together of social media and display advertising that attracts local advertisers. The social media appeal is obvious – it’s relatively affordable. The display component comes in both to augment their decision to commit to a social media effort and, interestingly, to better surface things like Facebook and Twitter accounts. We assume there will be more and more self-serve paid promotion type opportunities in the social media space. We think this will help create more advertisers out of the “don’t advertise” mass.

Finally, self-serve is bigger than most people think. There is always going to be a barrier to a local business owner spending the time and effort to learn how to use online advertising tools. But as more and more systems become accessible, we’re seeing smaller and smaller “agencies” – probably better to start calling them agents. These agents will have the same needs as big agencies and the tools will eventually scale down to serve them. In the meantime, there will be lots of manual, sloppy display purchasing. Eventually, targeting and the like will scale down to the local agent/social media expert level. But self-serve abilities will be at the core of this scaling down. It’s really important and I’d be skeptical of any large players who don’t move quickly to make self-serve the model for how their ad buying and management operates.

We also see the growth of group buying services.

What do you see as the biggest hurdle for local advertisers? How does Instiads address this issue?
The biggest hurdle for a small business is knowing how much to spend on advertising. Since Instiads offloads the technical and business processes from the publisher, we can help them attract more local ad dollars by allowing them to keep their ad rates lower.

What sites do you think are effectively targeting and reaching the local market?
There are 2,002: a couple thousand independent news sites that I’ve never even heard of. Plus Twitter and Facebook.

Contact:
Instiads
Justin Carder — justin@instivate.com
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