Advertising Subsidies for Small Businesses Give Small Cities Powerful Tools

Three cities have implemented innovative advertising subsidy programs, with local news outlets, philanthropy, or government collaborating to provide small businesses with advertising services at little cost. 

MERIDEN, CT 

The city of Meriden used $300,000 in American Rescue Plan Act grants to create an advertising matching program to help local businesses in the area. Small business applied to the local newspaper, the Record-Journal. The paper, along with the City of Meriden and the Midstate Chamber of Commerce, selected 150 small businesses and nonprofits to receive $4,000 marketing grants over a 2-3 month period. The combination of ARPA funds and newspaper advertising – each contributing $2,000 to the $4,000 total – provided a total of $600,000 in advertising value to small businesses and nonprofits. The Record-Journal netted $235,000. In a survey of 56 grant recipients, 54 said they would participate in the program if it was offered again. In addition to citing increased awareness and positive feedback, half the businesses that responded said the advertising led to new customers; 20 percent said the advertising increased revenue. 

TAOS, NM 

In 2020, as small businesses were struggling amid the COVID-19 crisis, the LOR Foundation, Taos Main Street, a nonprofit economic development group, and the Taos News created a program to help small businesses advertise in the newspaper. LOR and the Taos News gave $12,500 each – $25,000 total – to Taos Main Street. The paper divided that $25,000 among 30 businesses, which then collectively added $50,000 of their own money. Together, the businesses spent $75,000 in advertising at highly discounted rates. The response by small businesses was so strong, the program was extended beyond its initial time frame. Taos News netted enough from the program to fund a photographer they otherwise wouldn’t have been able to afford during the Covid-19 pandemic. 

HENRICO, VA 

The Henrico Citizen and Henrico County Economic Development Authority partnered to launch the Henrico Small Business Boost program in July 2023. The program awarded 20 small businesses a three-month advertising campaign across the paper’s print, newsletter, digital, social and audio products. Each package was worth $4,000, half paid by the EDA to the newspaper and half donated in ad services by the Citizen. Awardees also got training from the Citizen on how to improve advertising quality and reach. Participating businesses reported that their social posts saw increased engagement and consumers became more aware of their products and services. The small business awardees were also required to spend $250 of their own funds to “pay it forward” to a local nonprofit of their choosing for that organization to advertise in the Citizen. The success of the Small Business Boost also helped the EDA promote its own services to local small businesses. The program has led to greater collaboration among the network of small businesses. The Citizen netted enough from the program to promote a part-time staffer to a full-time business engagement representative. The Citizen also launched a second round of the program in 2024, doubling the grant funds to $80,000 for 40 small businesses. The number of applicants also doubled this year. 

Summary

The innovative programs developed in the cities of Meriden, Taos, and Henrico show the transformative potential in investing in small business advertising for both the small business and local newsrooms. Although these pilots were in partnership with only one local news outlet, other jurisdictions with several local news outlets could adapt the program to incorporate all local news outlets in a particular area, increasing small businesses’ choices of advertising venues, while also increasing the number of news outlets likely to secondarily benefit from the program. Of course, programs should consider the unique needs of their small business community, as well as track the impact of a program on both the advertisers’ and publishers’ bottom lines. Guidelines for participation should be clear and the paperwork minimal. Finally, the award amounts should be substantial enough to justify the effort of participation for all participants- both local newsrooms and small businesses. 

If you are considering adapting these programs to your jurisdiction, Rebuild Local News recommends: 

• • In almost all cases, the grants were paid directly to the local news outlet on behalf of the qualifying small business. So far, the organizations supplying the funds- the Meriden ARPA Board, LOR Foundation, Taos Mainstreet and the Henrico Economic Development Authority – have respected the independence of the local newsroom. If the program were to include more than one local news outlet, however, it would be more efficient to give the grants to the small businesses who then would choose which of the qualifying outlets they would like to advertise with. That system would also create a procedural “fire wall” between the news outlets and the government entity. 
  • Create a transparent set of criteria to establish what is and is not a qualifying local news outlet. (Visit rebuildlocalnews.org/solutions/model-laws/ for more information.) 
  • Require small businesses, not local news outlets, to provide copies of advertising, receipts of advertising expenditures and a statement from the news outlet that it meets the qualifying criteria for the grant in order to create a soft firewall. 

For more information on how to construct small business advertising programs, read Rebuild Local News’ small business advertising policy guide.