When people talk about opportunities in local advertising, it’s usually digital advertising that they’re talking about. As more local ad dollars move from the Yellow pages and newspapers to mobile and web platforms, tech giants like Facebook and Google have started to up their efforts to lure small and medium-sized businesses to their platforms.
But Savveo, a Charlotte, N.C. startup, has raised $2 million to help it tackle a different opportunity in local advertising: providing an online marketplace for buying all kinds of traditional advertising, from out-of-home and print to radio and television.
“The virtual world has done a fantastic job to drive efficiencies,” said Shafi Mustafa, CEO of Savveo and founder of OverstockAds.com, a company that sells remnant advertising space for traditional media. “But in the real world… that ad market lacks efficiency and his highly fragmented.”
The $2 million Series A round included several U.S. and international investors including David Jones, the CEO of cloud company Peak 10, Tim Biltz, CEO of fiber-based service provider Lumos Networks, Australia-focused fund BayCrest Capital and others.
Given the momentum behind mobile and online local advertising, it seems like a curious time to invest in a platform for offline advertising. But Mustafa insisted that “the death of traditional media has been greatly exaggerated.”
BIA/Kelsey, a local media and advertising consultancy, expects mobile and online media to account for the largest increase in local ad spending, nearly doubling to $21.8 billion between 2011 and 2016.
But, the firm also projects that as local advertising expands about 14 percent to $151.3 billion by 2016, traditional media like television and radio will continue to remain relatively strong. In the next few years, traditional mediums like television, radio and out-of-home aren’t expected to experience the same dramatic growth as digital media, but they are still projected to increase incrementally. In 2015, BIA Kelsey estimates that three-quarters of local ad dollars will still go to traditional media.
The field is incredibly fragmented – it includes more than 34,000 local media outlets nationwide, by Savveo’s estimation. But the company’s bet is that, if it does the heavy lifting of consolidating those outlets, it can profit by providing local business and agencies a single platform for pricing, buying and tracking advertising across those mediums. While other sites might provide an online marketplace for ad space in a particular medium, Mustafa said they’re not familiar with sites that provide cross-medium buying opportunities. The company said its platform, which is set to launch in 2013, will include both mechanisms for buying and pricing, as well as research and planning tools.
(Image by Roman Sigaev via Shutterstock.)