Chad and Adam attended the Borrell Associates' Local Online Advertising Conference last weekend and came back with a wealth of knowledge. The conference was well attended, with large media companies like The Chicago Tribune, Gannett, Clear Channel, and Pandora. After attending various sessions and speaking with representatives from these large companies, it was clear that where they were investing in the online advertising and marketing space, as well as their weak points. Watch today's Daily Brown Bag to hear about Chad and Adam's experience at the Local Online Advertising Conference and what they learned about digital marketing trends in 2014.
TRANSCRIPTION:
Hello, and welcome to the Daily Brown Bag. Today, we want to talk about our trip up to the Borrell Local Online Advertising Conference in New York. I’m Chad Hill, and I’m joined by Adam Stetzer.
Large companies backing into SEO
Yeah, good morning. Welcome to the Brown Bag. Yeah, Chad, it was a great trip down to New York City. This conference was quite interesting. Again, this was the Borrell Local Online Advertising Conference at the Grand Hyatt in Manhattan, and it was well attended by a lot of publishers. We had TV stations, radio stations, newspapers. You know, some of the big names were there. We talked to the Chicago Tribune, Pandora Music stopped by, very popular radio station that uses streaming for delivery. You know, Gannett and Clear Channel were also there, and I think this conference is very interesting to me, Chad, because, you know, we’re typically in the SEO Reseller space and talking to our seller community, and most of those folks find us because they’re already in, selling, and doing SEO and are looking for scale and white label, the things we typically talk about.
The folks we ran into at this conference, though, are coming from a very different place. These are publishers, and coming out of the advertising side, the display side, and sort of backing into SEO, I think a lot of them just have no awareness of the SEO reseller space, but when you get down to the nuts and bolts of what they’re looking for, which is, I think we should cover today in our Brown Bag, it’s very interesting how these worlds are colliding.
What large media companies are selling in 2014 (Stats)
Absolutely, and, you know, one of the most interesting sessions that I went to, I attended the digital agency track, and they provided a lot of interesting information about what some of these larger media companies are selling today and what they’re looking to sell in 2014, so I have a couple stats from Borrell and the research they’ve done. One of the stats was that, basically, today, about 73% of large media companies are selling online display advertising, and, essentially, that includes mobile advertising, at 55.7%. They’re also doing some social media advertising, 41.8%; and search engine marketing; 39.2% of these companies use publishers Adam is talking about are selling these services. The big growth area, though, is really moving into digital marketing services, and today, 38% of these companies are selling digital marketing services.
What I thought was interesting was to maybe quote some of the categories within the digital marketing trends that they’re selling. The biggest one of these digital marketing trends is SEO. So, 82% of, again, these companies are selling SEO, then it goes to 76% of ad retargeting. Right after that was website development at 71%, and then content marketing is surprisingly there at 58%. So, really, I think the big trend was that, and what people were talking about at the conference, was that these digital marketing services are a growth area and it’s a way to control more of the share of the advertiser’s spend, and so a lot of our SEO resellers’ typical customers -- the small website developer, the local digital marketing agency -- you know, they’re now going to be competing with some of the larger advertisers that are out that have existing relationships in radio and tv and print. So, it’s an interesting place where we are, Adam, in this.
It was all SMB focused
Yeah, it is interesting, and I think what’s fascinating to me is just that the folks at the conference, you know, don’t identify themselves as “I want to be an SEO reseller;” that’s just not where they’re at, they’re not coming from that, but when you look at those stats for digital marketing trends and when we have these discussions, they do want to be that. They just don’t know that’s where they need to be. When you start getting into it, they’re looking to grow revenue, they’re suffering losses because a lot of their traditional ad-revenue streams have been gobbled up by Google and Microsoft and Yahoo!, and so as you start to explore, they’re 100% comfortable with the distributor-reseller-OEM-type model, and they’re all trying to get into the SMB market. I mean, every conversation I had, Chad, was about, you know, what do you really do for the small-to- medium-sized business? It was all SMB focused.
So, again, it’s just interesting to me how that industry is moving more towards where we’ve already seen these web design and agency consultants, who are in our SEO reseller community today, already are, and they’re definitely coming closer. So, I think that’s going to be very interesting. Of course, also, our friends from Google were there, our rep was there, and our friends from Bing and Microsoft were also there, but they were more trying to sell to us, of course, because, you know, they want to make sure, they probably are kinda fighting this fight, Chad, right, they don’t want to see it move more into SEO and these other organic things. They want to keep the money right where it is at in PPC.
Is SEO outsourcing the way to go?
Yeah, absolutely, and I think once you get there that you need to be selling these services and the digital marketing agency services. The big question, what people were trying to understand, is: should they build, these larger agencies, should they build their own agency, or should they outsource SEO? And this, we’ve had this discussion many times, Adam, and so, you know, here we are again sort of looking at why do you build something, why do you outsource, and a lot of times with outsourcing -- this is, I think, really the crux of the matter for these companies -- is are they good at building digital marketing services in-house, or should they work with a third-party who is focused on that 100%?
And a couple things that I continue to hear being the, really, the Achilles’ Heel of this strategy for a lot of these companies is whether or not they’re going to be able to do this with margin that’s acceptable for the business that they are traditionally used to selling -- broadcast media, print, and newspaper. I think all of them acknowledge that the margins are definitely lower in agency services, but I think that at the same time they’re making a lot of mistakes in some cases where they’re trying to be too custom to a group of customers out there that really can’t afford custom. So, Adam, I think you had some discussions about average price points that a lot of people were paying. What did you hear there on that?
Establishing the right price point
Yeah, I mean, this is the classic, you know, I got a Volkswagen budget but I’m trying to give you a Cadillac, and -- I don’t care what business you’re in -- that just doesn’t work. So, yeah, many times people come up to the booth, some of these bigger publishers and distributors, and I would say, you know, “what’s your price point need to be for this small business?” and they’re saying, “Yeah, we need it to be, you know, three, four-hundred dollars retail,” and we’re saying, “wow, that’s tight!” I mean, Chad, you and I’ve just covered in some of our video responses, that piece by Pratik, and he said a small business can’t even really do SEO for $600 a month retail, so this is a real strategic issue. And, again, I think our SEO resellers have this better understood because these are small guys. They’re used to dealing with small business and they’re used to dealing with very, very tight margins, and so they figured out how to keep the scope very contained and keep their clients happy.
I think some of these bigger publishers are still coming along that learning curve, but they’re going to have to crack that. They can’t just come in with a boutique approach and say, “Yeah, I’m gonna get, you know, 40 sales reps or 100 sales reps to go out and sell this differently every time,” when it’s a $499 a month product, “and we’re going to have this great margin.” I think they’re just not there yet, but I think it’s a fascinating place to be, Chad, and just like the BIA Kelsey conference in San Francisco, you know, as we looked around that room, we saw, what, every other room was this point service, a lot of display, retargeting, reputation management, and ad-creation services, video-creation services, but we really didn’t see anyone like us, and we certainly didn’t see anyone from the SEO reseller community in that room with us. So, I think it’s a good place to be, and I think this industry is definitely changing according to the digital marketing trends we picked up on, and I’m sure we’ll have more to report on this soon.
What are your thoughts?
If you have questions or want to hear more about the data that we learned at this conference, please drop us a comment, and we hope you’ll subscribe to our YouTube channel. We’ll see you back tomorrow.