To White Label, or Not To White Label…

White labeling is a structure for product distribution that’s as old as the Gutenberg Bible. Today, some version of white labeling is used in everything from your iPhone (designed and distributed by Apple, manufactured by Foxconn), to retailer “house brands” like Walmart’s Great Value and Costco’s Kirkland.

This has also been a fundamental structure of local media and advertising for the past few decades. Local media publishers have distribution scale, while startups bring innovation in online and mobile marketing for local businesses. So naturally, collaborations ensue to combine strengths.

But the question is, how the product that’s sold to local business is branded? Does it carry the publisher’s brand or that of the startup? The former has brand equity… but sometimes brand baggage. Does the startup’s brand lend a modern feel in its tech-forward branding? And does this boost sales?

A classic example is Google AdWords and its other SMB marketing products. Local media companies and smaller agencies become certified AdWords resellers, thereby boosting the value of their own ad bundles. They can then sell customized packages of Google and their owned & operated media.

A more recent example is Walmart’s partnership with Shopify to bring its merchants into the Walmart Marketplace. As we explored yesterday, this lets Shopify offer greater distribution to its merchants. But more to the point of this article, it lets Walmart boost the value of its marketplace, wholly under its own brand.

From the Source

Back to local media scenarios, we’ve been curious about what the current temperature is among publishers. A recent dialogue with Swisscom’s localsearch CBDO Frank Huber revealed a measured approach that places ample value on technology partners in concert with its own brand strength.

“In our transformation from a traditional yellow page player to the leading full-service marketing company for SMEs in Switzerland, we’ve massively extended our offering in the areas of presence management, online campaigns and SaaS,” he told Localogy Insider. “Working with white-label partners has allowed us to benefit from their innovativeness, technological strengths, agility and global scale, while allowing us to to focus on our own core competences such as consulting, service excellence and management of our own online directories.”

Huber believes that the publisher’s brand strength — now represented by Localsearch — is felt most by SMBs. Here it’s a matter of trust in an established brand, including confidence in support resources. Though tech startups have an edge in innovation, their brands don’t always carry this same level of trust.

“As an established and trusted brand, working with white-label technology platforms has allowed us to leverage our existing relationships with our SME customers to offer them digital advertising and SaaS solutions,” said Huber. “Small business owners don’t have time to research different technology brands, but they still want to benefit from best-in-class solutions. By bringing the best white-label solutions together under the localsearch brand, we’ve been able to better serve our SME customers and deliver an excellent customer experience.”

Another benefit of white labeling frameworks seldom discussed is the operational benefits for the sales organization. In other words, consistent branding breeds quality control when it comes to maintaining standards. That advantage applies across sales execution as well as effective training.

“As we continue to grow our business, we’re always looking for new digital sales channels that allow us to fully own, to fuel and to operate our customer acquisition funnel,” said Huber. “While co-branded solutions may provide initial traction, a white-label solution allows us to take full ownership of building a funnel that works for our salespeople, our offerings and our business – and in long-run ultimately strengthens our brand as a full-service marketing provider to SMEs.”

We’ll keep an eye on this topic on an ongoing basis, including the pros and cons of white labeling local media products.

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