Local Online News: Still Up for Grabs

The online news space is getting crowded. Maybe it’s time to start throwing some elbows?

Digital marketing dollars of most small business, are still up for grabs. When you take these tiny but high volumes of mom & pop budgets, and combine them with the ‘asleep at the wheel’ efforts of traditional media, you can see why Reach Local, Google, Yellow Pages 360 and a slew of indie efforts are doubling down and are going for the kill.

When it comes to big media’s foray into this space, it’s full of well intentioned, but often misguided efforts.

  • Philly.com’s CEO; Greg Osberg once told Poynter: “His top focus initially, will be on building audience, especially online. While conceding the point that small growth in unique visitors and other measures may not greatly impact ad sales, I think we can get 100 percent more audience, and that would make a difference.” Whoa, hold on there big fella. Since revenue & profitability is likely the top priority of his bosses, (investment firm of Angelo Gordon & others) we are not in agreement with Osberg’s statement. Instead, we believe Philly.com (and most news sites) have a sales strategy problem, not a traffic and page-view problem. Driving zillions of page views = inventory glut = lower effective cpm. Even MSNBC declared: pageview ‘dead’. Osberg also hinted of  his plan to find local collaborators, especially in the suburbs where editorial coverage has been cut. We think this will be tough in the fiercely independent, Philly blogosphere, where some indie sites are getting bought up. (see next item)
  • A Philly sports blog called 700Level, was acquired by Comcast. Another local sports site called Beer Leaguer was also just snapped up by the cable giant. This should give local, independent site owners a much better sense of the value of their work. If your stuff is good, why give it away for peanuts? If your not sure how to value your site, contact us for assistance. Indie-sites like Philebrity.com, Philly2nite.com and SuburbanOneSports.com are not likely to sell out for the relatively small pay day and employee status that the 700Level & Beer Leaguer jumped on. (we think much too quickly). Kudos to Comcast Sports Net vp; Eric Grilly, for making this smart move, while the 2 sports Radio stations in town 610WIP.com, 975TheFanatic.com, as well as Philly.com, were snoozing.
  • The Washington Post hoped local bloggers would drop everything to work with the legendary site, for what some say, free. Read the laundry list of rules you need to follow, if you want to work with the WashPo.
  • SacPress.com is the self-funded news project that reportedly reaches more Sacramento online readers than the daily Newspaper (Sacbee), by leveraging their Sacramento Local Online Ad Network (SLOAN). The network is now over 40 sites strong, even repping the web inventory of 4 local Radio stations. (stations owned by digitally-challenged, Entercom)
  • Radio & TV taking a shot at hyper-local news. Some broadcasters admit their weakness, raising the white flag, and are outsourcing web strategy to DataSphere. Others do it themselves, and make clumsy mistakes and leave money on the table. But promising Radio efforts like WYDaily.com are a sign of things to come.
  • Sites like TheBatavian, AroundMainline.com and BrigantineNOW.com are gaining traffic and advertiser support. They use the not-so-secret formula of “running their sites like a business”. They spend less time with research and theory, and more time on the streets closing deals, and making sales calls.

Meredith TV Hyper Local Fail. DataSphere Wins Again.

Meredith TV admits they can’t sell local web. The broadcaster recently handed off one of the most critical pieces of their business to the crew of  20-somethings at DataSphere; the tech company/call center in Bellevue, Washington. WATCH VIDEO BELOW.

Meredith Television joins the now infamous group of local media companies like Gannett, Raycom and Fisher Communications, all of whom outsource a big slice of their local internet sales effort to DataSphere Technologies.

DataSphere is one smart company. They created a cheap and easy, hyper-local solution for hyper-short sighted, local broadcasters. It’s a perfect offering for TV general managers and Internet VP’s that just can’t figure out how to sell local web. That’s too bad. Digital marketing is the fastest growing expenditure for local business owners. Local broadcasters need to keep control of that action, since small business is the life blood of local media.

As we reported last year, (read here) (and here) these types of deals might look good on the surface, but they’re deadly. (quick web revenue with no disruption of sales force)

Broadcasters who drank the DataSphere Kool-aid, were given awards and honored for their lapse of fiduciary responsibility. “Innovator’s Awards” were bestowed upon those who let outsiders build primary relationships with local clients. Gotta admit, that certainly is innovative if the goal was to fully automate a TV station sales force.

What’s the real deal about how Meredith and other broadcasters use Datasphere? The local TV station outsources web development and local sales to DataSphere, where they represent the local station…to local advertisers.  A boiler room operation that cold calls your local business community….using your call letters…..hard selling them on questionable, online offerings that have a too high chance of churn.

We hear the howls from local Meredith sales reps. No doubt, they’re heads are exploding as they learn of how Meredith corporate hired a room full of green horns to destroy the very relationships that the TV sellers took decades to build up.

Oh yeah. It get’s worse. DataSphere has the primary relationship with the local client, and keeps a VERY LARGE percentage of the revenue. Sweet.

Gannett TV & DataSphere

Gannett in Tampa just launched 40 hyper-local websites, supported by WTSP-TV News 10. In theory, that’s a good thing….since hyper-local is hot.

But in reality, this move is quite questionable for Gannett local television.

Why?

The GM of 10 News allows their hyper-local vendor (DataSphere) to use a Seattle based phone room to cold call Tampa business owners. These tele-sales folks use the call letters of WTSP (trusted, local media brand) to close the deal.

Translation: distant tech company is building relationships with the life blood of Tampa broadcast operation: local business advertisers. Local WTSP sales reps might get a bit ruffled by this.

Outsourcing local sales is rarely a smart move. Especially when it’s to a bunch of young kids with DataSphere email addresses.  See where the questionable WTSP move used to be. Below is actual page before being taken down.

Patch, Reach Local & Pandora

The new, local online competition; more than just the other newspaper or TV station across the street. Outsiders like Patch, Reach Local, Groupon and Pandora are hell-bent on siphoning ad dollars in local markets. Even independent, hyperlocal sites are grabbing bigger shares of small business marketing budgets.

Local Market Web Competition 9.12.10