By Chris Lee

Internet marketing is going local. The launch of geosocial networks such as Foursquare, Facebook Places, Google Latitude and Geomium have seen more and more Internet users take advantage of social networking at a local level – and marketers are increasingly looking at the local level to engage with target audiences.

Another fast-growing industry is that of local video advertising and an emerging force in this field is Localstars, a company which describes itself as a “geo-targeted online video advertising company”. The company has developed an automated video marketing platform that Localstars says transforms the quality and speed of creating online video advertising, making it affordable and effective for local advertisers, including small businesses.

NMK caught up with Localstars’ managing director Chris Bunyan to learn how the system works and also explain how organisations can accurately target their local audiences with online video ads.

Briefly introduce Localstars to us. How does it work?

We partner with a network of around 2,000 local publishers and directory websites that use our technology to create and sell online video ads. The system lets their ad sales teams create a 15-second video ad for each customer by customising content from our video library, which is probably the largest of its kind in the world. Ads are personalised with individual business contact information, images and logos.

After uploading the ads, a specially designed map-based interface can help define geographic play-out areas by, selecting from a list of recommended media. The entire process can take as little as three minutes to produce a professional, high quality, customised video ad. For more complex requirements, we have a team of creatives and film-makers who can shoot bespoke video ads that can be uploaded to the network.

What was the inspiration behind Localstars?

Online video advertising is extremely powerful. Average click-through rates are over three times higher than traditional online advertising, with 52 per cent of consumers taking action after viewing the video adverts – and 16 per cent then making a purchase. But video has traditionally been very expensive to produce and complex to deploy, putting it outside the budget of all but the largest organisations. We wanted to find a way to make it affordable to smaller businesses that are focused on targeting local audiences.

We do this by inverting the traditional media model in that we don't charge a video creation fee; the advertiser simply pays a small premium on standard CPM (cost-per-thousand) advertising rates and benefits from the impact of the video format. This brings video into reach for even the smallest of advertisers.

What types of companies are using Localstars?

Hundreds of local businesses have used our system from estate agents, restaurants and shopping centres to plumbers and car dealerships. And we’ve also run successful campaigns for many national brands that have an interest in regional targeting, including the likes of GlaxoSmithKline, Domino’s Pizzas and Nuffield Health.

One example of an advertiser that has seen some impressive results from our system is the British Heart Foundation. It has traditionally run standard creative online display ads but recently ran an online video ad campaign through Localstars and found the response rate was seven times better than it had achieved on the standard ads.

Could this kind of local focus act as a revenue stream for local media channels?

Yes, our business model is based on helping bring new online video income to locally focused media partners. It opens up a major new revenue stream, enabling them to sell high quality, customised video adverts with minimal capital investment, vastly reduced studio time and low risk.

We’re already delivering substantial video ad sales income to local publishers such as Johnston Press, Thomson Local, Newsquest, DMGT, Trinity Mirror and Evening Standard.

How does Localstars fit into the emerging field of geosocial networking?

Increasingly both traditional local media players - like newspaper groups - and the emergent geo-social, deal of the day type services, - are looking to ‘match-make local’ customers with great local offers. Localstars offers high impact creative advertising formats, coupled with strong local reach and so we fit as service providers to both traditional and new players in the local market. Increasingly video formats are becoming more interactive and flexible, enabling us to embed offers and calls to action into video and make such offers impacting and accessible via online and mobile devices.