Morris Reunites Web & Print Staff

For years, Internet research analysts have scared Newspaper and Broadcast companies  into thinking they had to create a separate staff for digital. While it sounds good on paper and some of that strategy works in unique situations like Deseret Media, it’s now being seen as a deeply flawed plan for most local media operators.

Publishers are steamed. They lost valuable time in trying to ramp up endeavors that were not only expensive, but they created internal warfare that local advertisers found appalling; ex: stay away from my client with your Internet stuff !

Thought leaders warned that traditional sellers were incapable of learning new sales skills. We think that’s a large pile of elitist bunk designed to keep publishers & GM’s in the dark and hooked on outside help.

Almost any Newspaper or Broadcast sales rep can become an excellent digital seller. You accomplish that by addressing the core issues: compensation, management culture, job descriptions, product line, in-house market intel and training.

We’ve seen it first hand. Applying old school sales & business principles to digital is much more effective than pouring scarce budgets into tech, manpower, separate divisions, outsourced sales trainers, research firms and expensive conferences.

Read how Morris Communications is reconfiguring its divisions, executive team, and sales operations…..Morris Digital Works (MDW) is being folded back into the main corporate structure at Morris Publishing. They spelled out two specific goals for the company:

1. Turn Morris Publishing Group from contraction to growth by 2013.

2. Change MPG from a newspaper company into a Digital-First media company that publishes newspapers.

Valuation of Digital Assets. Inland Press

Local online news & info is about to enter it’s next phase. Newspaper, TV, Radio and hyper local operators can no longer run digital with their fingers crossed. Having editorial execs drive the digital bus by themselves is now seen as a recipe for financial pain and loss. Every part of the business is now up for serious scrutiny: who’s in charge, sales plans, management structure, skill sets, path to profitability, etc. Topping that list is the financial health and business plan of the online operation. Having superior content is no longer enough.

Internet financial health and online investment values were the focus of my session at the Family Ownership Conference in Chicago last month. Inland Press invited me to do: Digital Valuation of Newspaper, Broadcast and Online-Only Assets.
Valuation of Digital Assets. Inland Press. Oct 2011

Digital Diagnostic for Radio Websites

Can Radio beat Newspaper in the online news space?

Here’s part 1 of last week’s webinar we did for a group of Radio executives. Merlin Media and Genesis Communications are featured in this session. We focus on the issues affecting Radio’s ability to build sustainable, online business models.

Newspaper’s Digital Competition

How Newspaper Can Beat Digital Competition. UPDATED for Oct 2011. Slide deck from this week’s webinar. Some competitors are familiar, others are not.

Featured topics:

  • Centro: Friend or Foe?
  • Philly.com gets crushed on Mainline by indie website; AroundMainline.com
  • Huffington Post and their aggregation model to trump Patch model?
  • Patch President; Warren Webster, qualified to talk revenue?
  • CPM selling is killing Newspaper websites.
  • DataSphere helping TV get into hyper-local space.
  • Newspaper Web Competition Oct 2011

Selling CPM: How to Kill Local Media

We hope Broadcast and Newspaper execs fully understand why Yahoo! terminated it’s CEO; Carol Bartz.

Sure, Bartz didn’t hit her numbers. But here’s the key take away for local media and the NAB, RAB, TVB and the NAA:

YAHOO! relied heavily on pageviews, commodity content and CPM or ‘cost per thousand’ selling of banner ad inventory. With online ad inventory growing everyday, that creates a glut. When ever there’s too much of something, the value goes down. Simple supply and demand principles.

Yahoo, along with AOL and MSNBC are getting killed with the exact sales method that most TV, Radio and Print companies employ in running their digital operations. Is the NAB or NAA paying attention?

The Wall Street Journal highlighted many sources that support what we’ve preached for many years: selling your web inventory via CPM or ad networks is bad business and turns your journalism and content into a commodity.

At Yahoo, that (CPM) rate dropped to an average $6.50 in July 2011 from $7.65 in July 2010, while at AOL, that rate dropped to an average of $7 in July 2011 from $9.45 in July 2010.

Not only have CPMs declined over the years, but the old axiom of ‘content is king’ is starting to lose it’s lustre. Unique content will always have excellent value. But if you’re just building and boasting about about page views & Facebook fans, your toast. Relying on these once useful formulas is a recipe for slowly killing your local media business.

Rob Norman; executive at WPP PLLC’s GroupM North America, told the WSJ. “Just because you have a lot (pageviews) doesn’t mean that you have something that is of distinct value.”

Perfect timing! And from our ‘what were they smoking files’, Gannett just did a deal with YAHOO! to sell the Internet giant’s low-value content. Sweet. Gannett is not only selling damaged goods, but they’re also admitting that their own Gannett home-grown editorial is poop nobody wants to sponsor.

Take a look at the chart below from the Wall Street Journal. You’ll see why old school, web revenue tactics don’t work anymore.

 

Newspaper CPM web sales & Yahoo

Hyper Local Business Models for News Media

What’s the best business model for a newspaper, broadcast or hyper local news site? What if the answer was as simple as running your website like a real business, with a profit-first strategy? This kind of talk flies right in the face of those who preach entrepreneurial journalism and editorial first strategies.

We know that’s either too damn scary or time-consuming for some old school journalists and media executives. Learning new skills and changing workflow takes time. But when Reach Local, Patch and indie sites like AroundMainline.com are taking bigger chunks of revenue out of the market, you might want to ‘eat your peas’ and get with the program.

In this month’s DIGITAL REVENUE REVIEW (video below), we expose the choke points killing our companies from within.

Jim Schachter from The New York Times giggles about his lack of web-sales, as Warren Webster from PATCH shakes his head in amazement. J-school professors; Jay Rosen and Jeff Jarvis are also in our cross-hairs. (These guys may want to reconsider their interest in teaching entrepreneurial journalism)

Mike Agovino from Triton Media talks the downside of CPM, and so does Randy Michaels from Merlin Media. (Sam Zell makes a guest appearance)

Steve Lanzano from the TVB chats up hyper local TV efforts.

Researchers are skewered for the foolishness of actually asking people to pay big bucks for un-needed, local media research.

Alden Global Capital; the private equity firm with a heart, is on a tear as they quietly grow it’s portfolio of distressed media properties like the Journal Register Company, Gannett and the Philadelphia Inquirer. 

Hyper Local mis-steps; In-Jersey, Loudoun Extra and TBD.com are outed for the real reason of their demise. Hint: it’s not what side-line commentators like  Alan Mutter or Rick Edmunds from Poynter have suggested.

Watch the amazingly spectacular video here:

Protected: Pricing your Online Ad Inventory

This post is password protected. To view it please enter your password below:


Mega Conference Recap 2011

Inlander April 2011 Mel Taylor

Inland Press; Patch & Hyper Local

patchOn March 18, Inland Press responded once again to the newspaper industry’s interest in hyper local competition and the growth of Patch. They invited me to do an encore of the session that was originally presented in St. Petersburg, Florida a few weeks ago, at the Key Executives conference. See presentation below.

Attendees heard our message loud and clear. Run your website like your newspaper….profit must come first.

Key take-aways that seemed to resonate the most:

  • Whoever acts as Web general manager, VP Interactive/content, editor, etc….must have their compensation tied to digital profitability and local market share….NOT page views or other soft metrics.
  • CPM selling at the local level is no longer effective, and is only getting worse.
  • Ad units and page layout need to be cleaner and more advertiser friendly. ( just like the newspaper )
  • Reliance on 3rd party ad or remnant networks need to be reduced or eliminated.
  • Newspapers need better awareness of the new, digital competitors like Groupon, Patch, Reach Local, etc.
  • Patch may not be a newspaper killer, but they do execute local tactics that newspapers should adopt.
  • Compensation, management structure and work flow must be re-aligned to embrace a digital first culture.
  • Let’s stop talking about, or over-researching the problem. Let’s put sales & business 101 into action.
  • Print is never going away. Yet digital will be the one tool that helps our industry the most.

INLAND PRESS: New Digital Competitors 3.18.11

Revenue: Online Community Journalism

TCU in Fort Worth recently played host to an excellent journalism workshop focused on helping community newspapers turn a profit with their websites.

I was invited to speak to this gathering of highly engaged newspaper execs. The 30 participants in this 3 day workshop represented a variety of local newspapers throughout Texas. They were all  committed to building sustainable business models for their digital news efforts.

Tommy Thomason; program director of TCU’s Texas Center for Community Journalism, is doing an amazing job with this series of workshops. With funding from the Texas Newspaper Foundation, attendees get intensive, non-stop training and development that really stands out amongst state news organizations.

WOW. No tuition, room or food charges during these workshops on the TCU campus in beautiful Fort Worth. In the past, workshop topics have included photojournalism, writing and editing, advertising sales, management, page design, developing an effective Web edition, sportswriting, and circulation.

Tommy Thomason was the founding director of the TCU Schieffer School of Journalism. He left that position to become the founding director of the Texas Center for Community Journalism. Thomason began his career in journalism in the early 1970s with the Associated Press, working as a sportswriter in Arkadelphia and Little Rock.

Dr. Thomason has taught journalism at five universities and has been at TCU since 84. In 1987, he was one of the winners of a national teaching award in Journalism Ethics from the Poynter Institute of Media Studies in St. Petersburg, Fla.

Recap: 2011 Key Executive Conference

Here are some prime take-aways from the 2011 Key Executive Multi-media conference, held in St. Petersburg, Florida, Feb 21-23.

Take your foot off the brake. You can’t make meaningful web revenue gains until you remove the internal chokepoints in your business plan and operations. Chokepoints commonly occur in areas like management & reporting structure, inventory management, conflict of objectives (ex: newsroom vs. sales) and compensation plans.

Run web like print. Just as you run your newspaper, use the same strict standards & objectives with your digital operations. Otherwise, your web business is likely to remain a money pit. Your digital competitors have a lower cost structure, which now forces you to measure items like ‘cost per story’. There’s also mounting pressure to consider even more outsourcing, and eliminating any content that’s not directly adding to the bottom line. Clark Gilbert’s slide showing cost structure comparisons between The New York Times and The Huffington Post says it all. (see photo)

Who’s in charge of digital? Does this person have their compensation tied to digital profitability? If not, why not? Would you ever allow the newspaper to be run by someone with little regard for profit margin? Recommended: designate an Internet general manager (or someone who plays that role) and compensate based on revenue & profit goals….NOT page-view, time spent on site or unique user goals.

Can you manage what you don’t understand? Do top management, publishers & owners have a strong grasp of digital opportunities, threats and sales tactics? Or do they simply delegate this to their digital guru or print manager? To make better decisions, custom training is mandatory for top management, publishers, and owners. Investment banks and private equity firms are upgrading their skill in this area. Are you ready for the tough questions they’ll be asking you?

News is not a business model. While journalism is a critical component of our operations and unique selling proposition, it’s unfortunately not the primary reason why many advertisers support our newspapers. Rather, local business wants to move product and digital marketing is increasingly what they want to try. Why not an offer digital or integrated solution to local business before someone else does?

Simplify. Far too many newspapers have complicated sales pitches, inventory management systems and pricing schemes. Sales reps struggle with talking points and overcoming common objections. Tips: Quote weekly instead of monthly pricing. Flat fee and share of voice programs work better than CPM models. Remove all geek speak and replace with language a small business can understand. To build confidence in sales force: create super premium ad units, reduce number of ad options and place pressure on limited inventory.

Vital research that will change everything. If sales reps can execute this simple task, they’ll make dramatic inroads towards digital success. Have reps ask clients about current marketing budget allocations, which new digital tactics they’re considering, and what types of pitches they’re getting from newspaper competitors. Understanding this info will ensure reps aren’t going into the market ‘blind’. Managers can use this intel to develop appropriate programs that advertisers increasingly want to buy.

Tap independent journalism. No matter how great your newsroom is, it can’t cover everything. Reaching out to select bloggers and online publishers is a compelling option to resolve this issue. These indies have an expertise in subjects that you can’t cover, or don’t have room for in the printed paper. They can also be considered a farm team, and they’re compensated via rev share. The very best writers can be featured in the printed paper and potentially be offered a full time position.

 

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

Why Traditional Media Chokes on Web

TV, Radio and Newspaper will need to address these issues, if they want to succeed in the new digital economy.

Traditional Media Struggles w/ Web Revenue 9.10

Web Revenue Mistakes of Broadcast & Print

TV gets 10% of local online ad spends. Radio gets less than 2%. Newspaper shares are in decline. Compare these lowly numbers to online-only companies like Patch, Reach Local, and Google that are now getting over 50% of local ad budgets. Anybody in local media think that’s a problem that needs a little fixing? For sure, we bet the investment folks at Angelo Gordon and Oaktree Capital are getting a little un-easy about this issue.

All is not lost. Even though the local competition continues to grow stronger, Broadcasters and Newspaper can still get back in the game, and significantly grow their web & overall revenue share.

The solution is simple and indisputable: address and remedy the common web sales errors committed by most local media properties. The list below captures and identifies what we refer to as: the 800 lb. gorilla in the room.

1. Top management & owners need specialized web training. How can you manage what you don’t fully understand? Expensive research and consultants are not enough. Delegating sales strategy to a content & tech focused VP of Interactive or Internet manager is risky without knowledgeable oversight.

2. Dangerous thinking: ‘selling web cannibalizes traditional sales’. It’s crazy to think that these words are still being uttered. If those in charge would prefer to focus on their core product, that’s fine. If these managers believe that “web revenue is small, so let’s ignore it”….that’s fine too. But at the end of the day, if you’re not going run your web assets like a profit-first business…then why even have a digital initiative in the first place? Advertisers are moving more ad dollars to online. They can buy web from your reps, or someone else. While web revenue is still relatively small, it is the fastest growing revenue stream. At the very least, local media should focus on growing its overall revenue share, by smartly leveraging its digital assets.

3. Limited web training of sales reps. How can they sell new products without seasoned direction & regular training? Is your staff taught by qualified web-sales trainers, or by a ‘web-geek’? Is your staff forced to endure theory & classroom lecture, or are they getting real world training by being taught in the field? Local media needs to look outside of the industry for fresh and seasoned perspective on web sales. Be wary of training from those who do not have recent local/direct, web sales experience.

4. Management structure conflicts. Conflict #1: Web managers report to traditional managers whose compensation package favors spot or total sales. This may be one of the most critical choke-points of growing online revenue. Where do you think traditional managers will place most of their efforts? Conflict #2: Programming/editorial departments are primary operators of most websites, including where and how advertising is placed. If you would never allow the PD or editor determine your on-air spot load or ad volume, why do you allow them to determine online units and placements on the website? Just like your Radio station or Newspaper, the website must be ultimately run by those with ‘web profit & revenue first’ goals.

5. Poor attention to fast changing, online environment. Traditional media execs typically follow other traditional media execs for determining digital plans. Some harshly suggest it’s the blind leading the blind. with slipping shares of  local online revenue, it might be best to also look outside the industry for best practices in web sales. New competitors like Patch, Reach Local and Groupon are ramping up their local staffs, and are going after the budgets in your own backyard. Is your team familiar with these new players and their sales plan? How do you keep up? Do you have a plan to thwart these new competitors? One way to win is to provide Web 101 workshops to local advertisers. By taking an educational approach with clients, they’re more likely to rely on you for all of their marketing needs, and not some outsider.

6. Setting web budgets too low. This little sleight of hand allows your sales staff to quickly hit web goals. Once hit, they can push down web sales to a lower priority. In this situation, money is left on the table and gives corporate management the false impression of successful, local web selling. Making matters worse, this encourages the remaining local web budgets to be redirected to online-only companies. The only thing worse than this is the foolish trick of reps converting portions of the traditional buy to web, thereby teaching clients that web should always be viewed as a value-add.

7. In-effective inventory & yield management. Nothing says poor web-sales management than seeing a lame Google AD Sense or network ad on your home page. Geez, you can’t sell your most valuable, most powerful ad unit to a local sponsor? That’s like always placing per inquiry or PSA’s in your 7:20 stop set on a Monday morning. If more than 20% of your available web inventory is sold to 3rd party ad networks…your local sales strategy needs to undergo a crisis intervention…now.

8. Confusing media kits, sales packages & pricing. Local business owners prefer simple offers, delivered using advertiser-friendly vocabulary. They’re usually not sure of the value of 1 or even 10 million page-views. Excel spreadsheets with ad units, cpm’s and other confusing data only frustrates the advertiser. It also freaks out the sales rep who’s trying to clearly explain the features & benefits of a cross-platform marketing program. Simplicity is always best.

9. Director of Interactive; tech & content background only? Too few Interactive VP’s and web managers are qualified to implement a realistic revenue strategy. While building slick sites and driving eyeballs are quite important, these skills do not equal revenue & profit. Suggestion: hire a corporate VP of Interactive Revenue that reports directly to the CEO. Bonus all applicable staff based on web profit, not web traffic.

10. Over-reliance on vendors & research for sales strategy. Just because I sold you a beautiful kitchen & gave you the best cookbooks, doesn’t mean that you’re now a master chef !