Councils working together to generate income

Many local authorities have considered carrying advertising on their websites before and decided that the time wasn’t right. The most common issues have tended to be that it wouldn’t deliver enough revenue to justify, 1 – hiring staff to implement the technology and manage relationships with advertisers, and 2 – the perceived compromises in carrying advertising; and also concerns over the types of advertisers to which they want to expose their audience, and to which they want to associate with their corporate brand.

But for many authorities the idea is back on the agenda – driven perhaps by continued financial pressure and the need to fund essential local services, but also by the fact that the revenue potential is much greater than before. Two of the reasons for this are website traffic has increased and is set to accelerate (some councils have seen over 10% growth year-on-year) and online advertising is now a core element of most brands strategy (and has seen double-digit annual growth, even throughout the recession).

The price paid for online advertising space by brands derives from a number of factors - how segmented the audience is, how relevant the advert is within the context of other content, the credibility of the host brand, the exclusivity to the audience that the opportunity offers – along with the overall volume of traffic of course.

Increasing the use of digital channels as the preferred means of delivering many aspects of many public services is core to the strategy for councils. By driving the increase in online traffic, channel shift is part of the reason that the revenue opportunity is greater than it has been before.

One of the reasons that generating significant revenue has been more difficult in the past is that councils alone have been unable to command the attention of the big advertisers and agencies from which most digital advertising revenue comes (the top 10 media agencies in the UK controlled £5bn of the market in 2013). As mentioned above, the people managing these campaigns want exclusivity with a large, but relevant and segmented audience, and working with a single council alone cannot offer that.

All of which brings to me to what Birmingham City Council and Derby City Council are doing.

Working collectively to generate income

With a desire to generate revenue from an unused asset and help fund services for their citizens, but recognising the limitations of working alone, Birmingham and Derby have both recently become among the first members of a new advertising network for local authorities. From this month, advertising presented to users of both councils’ main websites and the council intranets has been provided through the Council Advertising Network (CAN) – a community of authorities set up by CapacityGrid (www.capacitygrid.com, @capacitygrid).

Using the combined scale of their digital estates (main council website, other council-run websites and online services, staff intranet), the network of authorities will be able to get premium rates from the advertisers and agencies through which the vast majority of digital advertising revenue comes (see above). There are no fees for joining CAN and no investment is required by member councils.

The scheme is open to all local authorities, and will let members exploit the collective value of their digital estate by providing them with access to advertising agencies and premium rates not available on their own.

Councils will be able to support advertising that positively benefits local communities, with advertisers approved based on strict criteria and including campaigns from charities, health and wellbeing providers, energy-efficiency related services, local businesses and community initiatives.

As other councils go live on the network, we expect to see local authorities websites carrying advertising becoming the norm over the next year or so. These authorities will benefit from the increased revenue opportunity that a higher volume of traffic and a network of councils creates, but will also have the security of working with appropriate brands.

If you would like to find out more about CAN:

Email the CAN team: advertisingteam@capacitygrid.com

Or, if you’re coming to LocalGovCamp on 20 June, come and meet the CAN Team there.

Thanks to Simon Ellicott, Digital Solutions Director at Capacity Grid for this blog, first published on Comms2point0.

 

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