Selling ads on a local site to local businesses

[stan100]

I'm currently growing a local-area niche-blog. It's specific only to my location, and if all goes well, seems like it would make the most from selling ads to local businesses in the area in the same niche. I've seen some posts on WF about yellow page scrapers etc where they suggest selling space to local vendors.

What do you do about the legals of it? To anyone who has done this, did you go to a lawyer to draw up some kind of contract, or was it a less-strict kind of "$x for y months" deal? Is there some well-known contract template site out there I can finagle to work?

Edit: For clarification, my primary concern is coming off like I know what I'm doing. I'm assuming they would want to sign something, but I'm really looking for advice from somebody who's done it already.

 

[chaslife]

If this is going to be your primary source of income + affiliated with a licensed business you should speak with a lawyer and get some very broad contracts written up. MAKE people sign it. You should want them to sign an agreement for payment more than they should by any means.

Also in terms of the amount of traffic never put anything in black and white as you should know by now, that while it can be promised, its not always a guarantee on the traffic coming to their site.

 

[stan100]

Yeah. I figured as much, I just wasn't sure if there was any alternatives. It would be a good source of income for the website, but not for my primary living income.

 

[justo_tx]

Don't bother getting anything for anybody to sign, small local businesses aren't going to want to enter into some kind of contract unless they really know the game at which point, no offense, it sounds like you would be in over your head. Google "insertion order" and create a template off that, go around to local businesses and hock 250x300 or whatever for a month at a time or at some CPM rate. If they are saavy enough to ask you how they are going to be able to verify you are actually running their ad without them having to check the site everyday you better be ready to run the ads through OpenX or some other ad server so you can give them a report of impressions and clicks. Don't even bother trying to sell them on a CPC or CPA basis as their eyes will just gloss over and tune you out. Try and frame it in terms most of them understand, newspaper advertising. Tell them for 99 bucks or whatever their ad will be seen by xx,xxx number of people in a given time span. If they bite give them the IO and take their money, don't sign shit. Be prepared for them to not have their own creatives (250x300, skyscrapers, whatever) unless you are just selling text links. If you've got some creative skillz you can upsell them on creating a simple banner for them.

Any company bigger than say the local tax attorney or muffler shop is probably going to be doing radio and magazine advertising and you are going to need to know more than "my site gets x visitors a month" to land them, and they will usually want to commit to buys for extended periods and more than likely will want metrics to validate the success of their campaign, as well as features like flighting or day parting, you probably won't land any of these companies in the beginning (if at all).

You also need to be aware of handling more than one advertiser in a give placement (ad rotation) or serving something up in case you dont sell out your inventory (remnant) ignore those scenarios and you are leaving money on the table.

Long story short (too late), run OpenX hosted, learn how to use it for a month or two with some test ads, then grab your local alt weekly and start hitting up people advertising in there.

Good luck.

 

[stan100]

Keeping the bump because justo offered some good insight. I know I would be in over my head at this point; I don't plan on any moves like this for at least 6 more months while I develop the site and a following. Thanks for the heads up, is there anything else I should be aware of?

Seriously though +rep, thanks.

 

[Marketingmoore]

Keeping the bump because justo offered some good insight.

I agree this is some good info.

 

[justo_tx]

Hmm. Learning to use an ad server (OpenX being the most common for small publishers) is what you have to really have down if you want to be able to scale. If you don't know how to use an ad server that manages placements for you will kill yourself keeping your site updated with constanct ad location changes.

Also be aware of what your competitors charge. You may eke out a $0.50 - $2.00 eCPM using adsense but local niche sites tend to get a lot higher CPMs, at least $5.00 to $10.00 if not more. Pegasusnews.com, a local news/food/music site for Dallas, charges a $20.00 CPM and they upsell on creating banners too along with email lists (check the site out and find the advertising link to see their media packet). Small businesses that are used to advertising in the daily paper, green sheet, and alternative weeklies have no idea what display internet advertising should go for, even if they do Adwords it's not comprarable, so you should be able to get some pretty good margins on your inventory.

A word of warning though, it's an ass load of work, you will be in sales mode 50% of the time and education mode 50% of the time as small businesses don't have a good grasp on display advertising yet.

 

[stan100]

Thanks for 1) being awake and 2) being helpful. So do you run pegasusnews? It sounds like you have a lot of experience. My main concern is making the ads on the site work. Everything is an ass load of work anymore. I'm definitely going to look into OpenX soon, but like I said, I've got a few months to go. I have to do my research, but terms like "openX" and "insertion order" have given me some insight. Thanks.

Anyone have anything else to add?

 

[justo_tx]

So do you run pegasusnews?

No, but I was involved for a time with a project acting as a broker between local advertisers and publishers, which meant finding out what various local sites tried to price their inventory at. And prior to that I worked developing an ad server (not OpenX) so I know some of the features that bigger advertisers need.

 

[Volume10]

One thing that you could do is go to a smaller shop in your niche and tell them you want to give them "free" advertising for "x" amount of time. You don't seem to be running any at this point so it is not going to hurt your rev stream. This will do a few things for you. 1. It will give you some metrics you can use in your future sales pitches. 2. It will give you an opportunity to tinker with ad placement to measure effectiveness. 3. and maybe the one that is most intriguing, it will get the other businesses in the niche interested. If a business sees a competitor running ads some where they are going to assume that it must be working for them so they are more likely to be interested.

Usually when I have had our team pull together marketing proposals I will purposely give "example" placements so that they can see how their budget will be spent. If the media is a banner or email then I always have the creative team use a direct competitor of the business in the examples so they naturally assume that the competition is already using us. If they ask, I sight NDAs and just let them assume.