Outsourcing of digital advertising takes on new importance
Local news operations are well-positioned to develop more creative digital advertising campaigns, particularly for local businesses looking for custom projects like a Facebook page. However, keeping up with demand takes flexibility, which is why some publishers plan to rely more on outsourcing ad production to reduce costs.
Like magazine companies, newspapers have moved to integrate more custom publishing and marketing services into their organizations. Big newspaper companies have created standalone marketing units, such as The Washington Post's recently launched agency specifically for Facebook.
Anna Singletary, executive director of advertising services at Hearst Media Services, noted that Hearst is striving for more integrated packages across print and digital, encouraging sales reps to sell print, digital, Facebook fan pages, etc., in bundled campaigns at a reduced cost.
“If we're charging them less, we're going to have to do it cheaper,” she said. In order to accomplish that, Hearst and others have turned to outsourcing ad operations to firms with large overseas presences to churn out advertising and other marketing projects.
Adding marketing to the advertising mix
2adpro and Affinity Express are two service providers working with many local publishers on both print and digital outsourcing. Kelly Glass, vice president of marketing for Affinity Express, which works with Hearst, said the trend started a few years ago when most newspapers turned to outsourcing for print ad production, which seamlessly turned into to digital production. “Now at an even faster pace it's expanding to include a broad variety of interactive services such as video, social media, and publishing content online,” she said.
Glass said newspapers have an opportunity to sell to local business owners looking for websites and more customized services, but they need to be nimble and flexible in order to compete with new non-news sources online ― which is where Affinity comes in. “The more broad array of services the newspaper can offer the more advertisers can rely on them,” she said.
Like Affinity, 2adpro's clients, including big media companies such as Gannett, Scripps and McClatchy, use the service to design print, online and mobile ads for a quick turnaround. Ad materials are loaded into a cloud-based system and sent to India, where a 24-hour staff of 500 designers can produce them by the next day. (Affinity has a similar workflow and does the large majority of production in India and Philippines.)
Now 2adpro applies the same method to social media, which will continue to play a bigger role for publishers, noted Todd Brownrout, 2adpro's co-founder and chief marketing officer. 2adpro announced an expansion of services to include high-volume social media page design and production. Whether it be building a landing page, a YouTube channel or rich video ad, they can produce it.
The value to publishers is they don't have to devote more resources to new platforms as advertising gets more customized and media companies are expected to be “media consultants,” Brownrout said. “People expect customization. What we're delivering in a way is mass customization,” he said. Publishers pay 2adpro based on a fee or a revenue share, depending on the relationship.
In some cases these outsourced ad production units aren't so outsourced. Affinity typically has long-term, contractual relationships, paying for ads as they are produced. Bigger clients (such as Hearst) have a representative onsite. Singletary noted Affinity is “more an extension of our team."
Hearst doesn't fulfill all advertising through Affinity's system, as “white glove” clients requiring more customization are still handled by in-house creative. Hearst relies on the service more for print, but Singletary said Hearst is moving to fulfill more digital advertising, including developing a system to better integrate print and digital.
Ad production cost savings
The amount that publishers rely on outsourcing ad production varies, and so the cost savings can vary. Brownrout said clients typically see an average overall cost reduction of ad production by about 30 to 40 percent.
The other potential benefit is in being able to sell more thanks to efficiencies. “It's about giving your salesforce more confidence that any time they talk to an advertiser, they can deliver,” he said.
At the California-based Orange County Register, published by Freedom Communications, Inc., the benefit to using 2adpro is additional flexibility to build ads, particularly when special sections or events create a spike in volume, said Keith Gilpin, vice president, direct marketing and advertising operations with Orange County Register Communications. It also gives them access to creative advertising for the many emerging advertising types.
He expects a larger percentage of the newspaper's ads to be digital, “and to a growing extent many of those ads are being outsourced.”
In addition to relying on others to create ads, newspapers also have the option to let clients to do it themselves. The Register developed a self-service ad portal for partners, with templates powered by 2adpro, so that smaller advertisers can create their own ads.
“Oftentimes the ads we see coming through here are ads we wouldn’t have seen otherwise,” he said. “I think as an industry [self-service advertising] is going to continue to get bigger.”
Glass said publishers get the most benefit from the Affinity service by using it not just for overflow but to transform their production. Publishers can move away from a lot of heavy overhead to a much more transaction-based relationship (paying for ads as they go), she said.
Hearst's Singletary affirmed that the benefit to working with Affinity is both decreasing costs and increasing sales.
One criticism of outsourcing is that it takes jobs away from ad designers. Singletary said she sees it more as freeing up resources to put people in places that add value, for instance, by putting resources behind creating campaigns and knowing the resources exist to fulfill them.
Glass said outsourcing can give publishers the capacity to sell more. “They get the scale and cost and they don’t add the risk into their business,” she said.