Small businesses have traditionally been locked out of the TV market because of the prohibitive costs of running ads. However, one California-based company is looking to change this by allowing companies to produce and plan ads online.
Set up by entrepreneurs Nick Grouf and David Waxman, Spot Runner offers a ‘self-service’ platform for businesses to create and plan ads, and says it can allow firms to run campaigns for as little as $1,500. It recently received funding from a string of big media companies, after previously attracting the interest of Google.
Although the firm is focused solely on the US for now, Spot Runner’s Keith Wiley spoke to us about how its service can be used by advertisers and ultimately be adapted to other forms of media.
How did the Spot Runner idea come about?
Founders Nick Grouf and David Waxman had the opportunity to be involved with John Kerry’s campaign for president in 2003. In the process of helping him raise money using the internet as a fundraising tool, they realised that most of the money was spent on local TV advertising. With TV, the campaign was able to target down to the precinct level more effectively than they could target on the internet – which is still the case today.
Then, a friend of Nick’s named Adam Shaw, who at the time was a senior executive at Fox, gave them some important insight about how the local TV market operates. They then recognised there was a tremendous opportunity in providing the 11m local businesses in the US with advertising services that large advertising agencies don’t currently provide.
This segment has historically been underserved by ad agencies because they believe local businesses’ budgets are too limited and local cable TV is too time-consuming to reach.
To fill this advertising void, Grouf and Waxman assembled a plan that would leverage their internet expertise and tap into the potential of this market, and Spot Runner was born.
What figures can you give us on uptake and your targets for the future?
As a privately-held company, we don’t disclose Spot Runner’s figures, but there has been tremendous interest in Spot Runner’s services from not only local businesses, but also large companies that either have local operations or serve local businesses.
What are the main benefits for clients?
Advertising with Spot Runner helps clients grow their businesses by reaching new customers. We have a client in the restaurant business that has seen double-digit growth in same store revenue and traffic; a web-based business that saw a spike in sales of 350%; a real estate agent that won a $7.9m listing because she could offer to advertise it on TV, and the list goes on…
Also, because very few local businesses are advertising on TV, Spot Runner helps its clients differentiate themselves and build their brand in their community. For those businesses that compete with national brands that have significant marketing budgets, this allows them to level the playing field.
TV advertising is also much more cost-effective than people may think, on-par with radio and print, because it can be focused as tightly as a neighborhood.
So what sort of costs are we talking about here?
Complete campaigns from Spot Runner, including an ad and airtime, start at $1,500.
Why should businesses invest in TV advertising rather than sponsored search, search marketing etc – especially when online ads are more measurable?
We think advertisers should consider a holistic approach to their advertising – it doesn’t have to be an either-or choice. A solid marketing strategy includes a mix of media of both “push” and “pull” tactics.
TV remains one of the most powerful marketing mediums in the world. Television merges video and audio to grab people’s attention in a way that is impossible through other advertising mediums. The amount of television Americans are viewing is on the rise, and American households spend an average of eight hours a day in front of the TV, making it the most popular medium for information and entertainment.
Search marketing is considered “pull” advertising, which is effective when someone is actively seeking your product or service for it to work. As a “push” tactic, TV advertising can reach a large number of passive viewers and can be especially effective in establishing brand recognition for a business
What are you doing to offer measurability for your clients?
We provide reporting to clients at the end of a campaign which indicates when and where their ads ran. We also encourage clients to measure their campaigns through dedicated phone numbers and landing pages and by asking their customers where they heard about their business.
Do you see IPTV advertising as a threat, and do you plan to do anything in that space?
Spot Runner plans to extend its platform across the full spectrum of both traditional and emerging advertising mediums, such as online video, video on demand (VOD) and IPTV, so that clients can use Spot Runner to take care of all their local advertising needs.
What is your single biggest challenge?
Maintaining focus. There are so many different areas we’re excited about now, but it’s important that we spend the time to perfect our current offerings before expanding.
Do you want to share your recent big news with our audience?
We recently announced that two of the world’s largest ad holding companies, WPP and Interpublic Group, along with one the U.S.’s largest mass media companies, CBS and several other financial institutions together invested $40 million in Spot Runner.
Well done. How do you expect to use the investment to move your business forward?
We’ve already started to tap into WPP and Interpublic Group’s talent and resources and collaborate on clients.
We plan to invest these new funds into refining our core local TV advertising solution as well as into developing the next generation of advertising platforms.
Were you disappointed Google chose not to invest?
No, our goal is to remain independent right now and focus on building a strong company, help our clients be successful and create value for our shareholders.
It seems plausible that Google will do a similar thing themselves – how will you react when they do?
At this point, Google hasn’t announced any specific plans for TV advertising.
What kind of opportunities are out there for creatives to provide ad content, and how to you plan to expand your range of content?
Our in-house creative team develops new ads for our library of ads every day. We are interested in expanding opportunities for outside creative talent to contribute content and we investigating ways to do that.
Any plans to offer ads on other media?
Absolutely. We are actively developing platforms for other media.
Will we see you in the UK or Europe anytime soon?
As of now, our focus is on the US market.