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May 20, 2008

DMGT’s investment in Spot Runner could bring cheap local video ads to regional newspapers

By Peter Kirwan MM blog

Just caught up with this: Daily Mail & General Trust has invested in a US company called Spot Runner, which specializes in helping small companies to create and place cheap TV ads.

As part of the deal, DMG&T will take a lead role in deploying the start-up’s technology in Europe — something we look forward to watching with interest.

I’ve been following coverage of Spot Runner casually in the US media and marketing press for a year or so. Founded in 2006, the company allows thousands of mom and pop businesses to run highly localized TV ads across the US.

It’s a classic Long Tail effort –albeit one that seems highly geared toward North America’s highly fragmented local TV market (at least at first glance).

Recently, for example, Spot Runner struck a deal with Stuller, a US company that makes money by distributing cheap jewellery to 40,000 independent retailers across America.

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For a minimum spend of $1,500, any one of these stores can plaster their own details across a templated ad featuring Stuller goods created by Spot Runner. Spot Runner also does the leg work of finding remnant air time for the resulting ad in local markets.

So what? Well, here’s what. Forget about America’s highly localized TV markets. Instead, focus on the fact that Spot Runner’s technology is ideally suited to small companies anywhere in the world who want to make and run video ads on the web.

Naturally, if Spot Runner can combine video advertising with the power of local search and content, the results could be very powerful indeed.

Online video has become an extremely lucrative niche for national sites. The potential for local advertisers doing their stuff — at low cost — on thousands of local news sites is obvious.

Spot Runner’s ambitions don’t stop with video. Nick Grouf, the company’s chief executive, is making it abundantly clear that Big Media should regard Spot Runner as a multi-platform rival to Google:

“Businesses don’t think, I want to be in print, or be online, or on TV. They think I want to [grow my revenue]. What we’re doing right now is trying to learn more about how to make our advertisers successful. To the extent that print is part of that [purpose] we will help them with that focus.

This kind of talk has got a large number of Google’s fre-enemies excited about Spot Runner. Aside from DM>, the company’s investors include global ad networks WPP and Interpublic, broadcaster CBS and Spanish-language media giant Grupo Televisa.

Paid Content suggests that it knows “on good authority” that Google tried to buy Spot Runner soon after its launch. The start-up allegedly turned down the offer — and Google has subsequently ventured into TV advertising on its tod. (NB: Other accounts suggest that Google walked away from Spot Runner — see here.)

The potential isn’t lost on the highly-rated former Microsoft executive Joanne Bradford, who recently left her job running Microsoft’s global ad sales organization to take up a senior role at Spot Runner.

It’s going to be interesting to see how DMG&T delivers on its commitment (as Paid Content puts it) to “help take the service to UK and other parts of Europe”. . .

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