Why I Talk Hyperlocal Ad Network Dreamers Off The Ledge
May 12, 2016 by Dave Haynes
It seems like every week lately I spend some time on the phone talking a guy off a business ledge.
My office number is listed on my contact page, so people ring me up, asking what I think of their plans to start a network of digital signs littered around their town, their city, their resort strip … some variation on that.
They sheepishly admit they know that as a consultant, I charge people real money for that kind of advice, but then confess they can’t afford me. So I listen, and they ask, “So, what do you think of that?”
“Don’t do it.”
I always say that.
“Just don’t do it.”
The capital and operating costs of installing and running ad-based networks in places like shops and salons are a fraction of what they used to be. You can probably kit out a salon with a decent-sized LCD TV, mount and Chromebit for less than $500. You can probably borrow on available WiFi to get it connected. There’s no end of free software.
But that’s the easy, one-time stuff. What’s not so easy is selling advertising. It’s hard. Really hard. Local business people are chased around all day by people peddling everything from local cable TV to ads to mobile proximity messages and digital coupons to coffee cup sleeves and audio spots on podcasts. Our fragmented media landscape is only showing signs of getting more fragmented by the endless options.
My callers run scenarios by me, like putting screens in all the area bars, and then getting Anheuser-Busch to buy ads.
“Not gonna happen,” I tell them, unless their idea of area bars is 1,000s of sites, in all the top US markets.
And even then, it’s a maybe …
Local sign network operators, when they do close ad deals, will then have to collect, and have the discipline to insist on a check and not a free mani-pedi for Mom, or dinner for four.
There IS money to be made in hyper-local digital signage, I believe. But it’s on the recurring services side, with the guys who are targeted as advertising clients or venue hosts for screens.
A local salon or personal trainer studio might have services they want to steadily promote or classes to drive registrations on. They likely know screens would do that – but don’t have the time, patience or IT-savvy to get started and then keep it running. But if somebody could worry about that for them … if it didn’t cost too much … well …
There are national solutions providers who do that sort of work, but rarely down to the small business level, and even more rarely in smaller markets. Local pro AV guys MAY do digital signage installs, but few will have the ability, experience or interest in providing deployment and ongoing technical and creative support.
Annual or multi-year contracts with predictable payments each month beat the hell out of the totally unpredictable world of hyperlocal media sales.
There are always exceptions. There is a thriving hyperlocal ad network out there somewhere, and that’s awesome for that team. But the great, great majority of these efforts fail. Look around your local shops and salons and you see screens that seem to always have ADVERTISE HERE in the ad rotation. Most senior CMS sales guys dodge these kinds of opportunities because they’re small, risky and needy.
If you are thinking there’s a business in selling ads in screens in local businesses around your area, there probably isn’t.
Don’t go out on that ledge. Falling off hurts.