Aol’s Patch Taps Ad Tech Startup PaperG To Boost Local Ad Sales In Over 100 Markets

Traditional publishers and fledgling digital publications alike are trying to find the best ways to monetize their content on the Web and take advantage of the benefits offered by hyperlocal content and the targeted advertising that (should) come with it. PaperG, an advertising technology startup founded in 2007, is trying to become that go-to solution for small and established online publishers that are looking for a quick and easy solution for their hyperlocal advertising needs.

PaperG has built a solution that automates local ad creation, sales, and management for these online publishers that automatically creates a custom rich-media ad for any local business in less than 60 seconds, according to PaperG Founder and CEO Victor Wong. In August of last year, the startup added well-known publishers including the Los Angeles Times, MediaNews Group, Lee Enterprises, and Sun Times Media Group to its roster of publishing partners, which also includes names like Hearst, McClatchy, Gannett, New York Times Regional, Boston Globe, Newsday and New York Post.

Today, the startup is announcing that it will be providing its local display advertising technology to another big player in the local news space: AOL Inc.’s hyperlocal platform of sites, (Disclosure: TechCrunch is owned by Aol.) PaperG’s technology will be released in over 100 of Patch’s markets, enabling Patch sales teams access instant ad creation, management, and optimization for their litany of local advertisers.

The value proposition here for Aol’s Patch is that PaperG’s technology, which supports Flash, HTML5, and mobile ad units, can automatically build a custom ad for any local business in a jiffy (an example of which you can check out to the right). All that a sales rep or advertiser needs is the business’ name and address, and PaperG’s solution crawls the Web, aggregating all the important info for the business, including reviews, location, etc., and presto, it creates a display ad without the sales rep having so much as to open a new tab.

The key here, Wong says, is to supercharging sales and giving small newspapers and publishers an easy ad-creation platform without having to know how to code or create ad copy themselves. In the majority of situations, he says, the ad that’s created ends up being the final product, although teams then have the ability to tweak the design, color, ad copy, and so on, to complete the optimization process.

Wong says that PaperG wants local merchants to be able to target these ads as much as possible, through geo targeting, targeting by category, to enable small businesses to target the right audience and interest group the first time without the hassle. For merchants, the solution is absolutely free, and for publishers, the ability to avoid having to pay $50 for every ad that a solution creates is a huge leg up.

Thus, to make money, PaperG creates these commercial agreements, like the one it’s formed with Patch, to make its technology accessible to the variety of local outlets that are seeing syndicated content from the publisher. Those publishers have the opportunity to offer hyperlocal, targeted ads to an audience that is (they hope) far more likely to click on ad for their local pizza shop, which in turn makes those local businesses benefiting from this discounted advertising happy campers.

And so far, the strategy seems to be working, as Wong says that it’s technology has been able to double the close rates for sales reps. While Google has a strong business with AdWords and is leading search engine advertising by a long shot, Wong says that no one is really doing this for local display advertising, which remains one of the largest white spaces in online advertising, he says. With a solution that simplifies local advertising for online publishers and the small businesses they represent, this PaperG’s strategy potentially has some legs.

And considering the fact that Patch did its due diligence and considered a number of solutions before finally deciding to go with PaperG, the partnership is further confirmation that it they just might be onto something.

PaperG raised $1.1 million from LaunchCapital, Brian O’Kelley, Mark Potts, and Steve Taylor back in December 2009. For more on the startup, check ’em out at home here.