Valuation of Digital Assets. Inland Press

November 4, 2011 By

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

Filed Under: Front Page, Hyper Revenue Watch Tagged With: , , , , , , , ,

INMA Audience Summit; Mel Taylor PPT

October 26, 2011 By

Here’s my presentation deck from the INMA Audience Summit, Las Vegas, Oct. 24, 2011. Session was called: State of Circulation; Monetizing the Online Audience . Special thanks to Earl Wilkinson, John Newby and everyone who gathered for this outstanding event.

Mel Taylor INMA Vegas 10.24.11

Filed Under: Front Page, Popular Posts Tagged With: , , , , , ,

NYT Profit, Internet and Documentary

October 22, 2011 By

The New York Times Company recently announced a quarterly profit. How they got there wasn’t pretty but who cares, right? In what could be viewed as the new normal for Newspapers and other local media companies, the Old Grey Lady deftly leverages the Internet and digital subscriptions, along with maneuvers involving myriad assets, financial charges and operations to post a much needed profit.

Below: Some high & low-lights from that financial disclosure, and the promo trailer from Front Page; the documentary about how the Internet is forcing The New York Times to reinvent itself.

  • Circulation revenue grew by 3.4 percent
  • Total advertising revenue fell 8.8 percent
  • Overall digital revenue, (usually double-digit growth) fell 4.5 percent
  • Weakness from About.com division due to changes in how Google pushes traffic to info sites
  • Sold part of its stake in the Boston Red Sox
  • Took hit related to repayments of $250m it borrowed from Mexican billionaire Carlos Slim
  • Operating profit for the quarter grew 5.5 percent

Filed Under: Front Page, Hyper Revenue Watch, Popular Posts Tagged With: , , , ,

Digital Diagnostic for Radio Websites

October 12, 2011 By

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.

Filed Under: Hyper Revenue Watch Tagged With: , , , , , , , , ,

Moneyball: Fixing Newspaper Web Sales

September 30, 2011 By

Traditional Newspaper management is just like the old guard in Baseball. That’s what you’ll think after watching Moneyball starring Brad Pitt as Oakland A’s general manager; Billy Beane.

Based on a true story, Moneyball shows Beane going up against his old school, know-it-all, front office. He’s tired of being in last place and squeaking by on a shoe string budget. Unable to afford star players, Billy decides to slaughter a few sacred cows and installs experimental yet logical tactics into his game plan.

Today’s Newspaper industry is like that once great, but now struggling baseball team playing on a new, hyper-competitive field called the Internet. The veteran print team is stuck in a rut using the same, tired strategy that did serve them well for years, but no longer. Today, they get trounced by those with more money & muscle (Google, Reach Local, Yellow Pages, Hyper-Local Chamber of Commerce, etc.)

Does anyone on your newspaper team play the role of Billy Beane? You should find one. Their job will be to encourage the ditching of tactics, managers, research consultants, conferences and professorial pundits that just don’t help anymore. This person will need entrepreneurial tenacity and a very thick skin since insiders will immediately try to torpedo their efforts. This person will be a threat to ‘the way it’s always been done’.

Now’s the time to slaughter a few sacred cows in Newspaper, just like Billy in Moneyball…did with the Oakland A’s.

10 areas that hold the key to your Newspaper’s digital success or failure. Here’s the first 4, with more on the way….

Compensation & Financial Motivation If you can’t fix this, just turn off your site and retire. Even though adjustment of compensation is the most direct way to positively affect digital sales, it’s also the most challenging action to take when surrounded by whiny sales reps and ad managers who threaten mutiny. If you can’t apply the simple & proven principle of compensation adjustment to your digital efforts, you don’t have a web business… you only have an expensive hobby.

Management Structure. Who’s in charge? If the person managing your digital efforts is salaried, you’re either bleeding red ink or you’re hitting a too-low web budget and leaving a load of cash on the table. Would you ever hire a publisher or ad director and then pay them a nice salary whether they hit their numbers or not? Then why do it with those who control your digital business? Need some proof that salaried execs are more likely to kill your digital business? AOL Patch, The New York Times, Allbritton’s TBD and Gannett placed salaried, editorial execs in charge of building out the company’s hyper-local business models. To date, these brainiac-led efforts have either been shuttered or still bleed rivers of red ink. Tip: Do the exact opposite of what these egg-heads did. Tip #2: Run digital like a real business, not a hobby.

Inventory Management. Publishers, editors and ad directors vigorously defend the value of their content and readership in print. They smartly price the ad inventory adjacent to the editorial. But we’re floored how often they let Google Ad Sense, Centro and other 3rd party rep firms dictate CPM’s for prime positions on their sites. This over reliance on ad networks & deadly CPM selling contributes to the worse crime of all: web managers boasting of an online ‘sell out’. Duh. Would you ever tell an advertiser that you’re sold out in tomorrow’s Newspaper? Being ‘sold out’ online exposes a serious lack of inventory yield management, poor understanding of supply & demand pricing, and the painful in-ability to quickly create programs that help a client spend money with you.

Market Intelligence. If your staff is semi-blind to what the local business community is doing online, you’re in for a rude awakening. Instead of just picking up checks and taking orders, sales reps must be vigilant with client ‘intel’.  They must always understand the ever changing need of the advertiser…especially when many are moving their marketing dollars to online. Take test #1  and then take test #2 to see what I mean. We totally understand why Newspapers invest in market research about Internet revenue activity. It seems smart, but it’s not. It also seems like a good idea to perpetually debate digital innovations in journalism. But it’s not. Unfortunately, most Newspapers struggle to implement any of the tactics employed by innovation poster children; Deseret Media & Journal Register.

Fact: Your sales force with those direct relationships with local business should be your #1 source of market research. Reps should always be doing CNA’s (client needs analysis) to uncover clues to help point your Newspaper web sales model in the right direction. If anybody should have high levels of market intelligence and know the spending habits of local business, it should be your local feet on the street….NOT an expensive research firm. Duh.

Filed Under: Front Page, Hyper Revenue Watch, Popular Posts Tagged With: , , , ,

NAB Radio Show 2011. Web as Nuisance.

September 8, 2011 By

Radio & TV execs throw alot of  money, manpower & worthless research at digital. Radio still only gets a 2% share of local web revenue and TV claws for about 10%. Compare these anemic numbers to the hefty 50% local share that goes to pure-plays like Groupon, Google and Reach Local.

Will any of this be honestly discussed at the NAB Radio Show 2011 in Chicago? Probably not. Will the NAB or RAB step up and sound the alarm? Hmmmm. I wouldn’t hold my breath. By the looks of the 2011 Radio Show agenda and list of same speakers we hear, year after year, the Internet is still being downplayed and discussed as a “nuisance”. No wonder Radio get less than 2% local web revenue share.

Broadcasters still haven’t gotten their digital-revenue act together. They still haven’t understood the very real threat of these new, hyper-local competitors who are out to eat their lunch.

The reason why Radio and TV struggles with online revenue generation is simple:

The wrong people are probably in charge of the digital assets. Their compensation package doesn’t light a digital fire under their ass, so why should they worry about profit?

Still letting a program director or webmaster call the digital shots? Your newsroom manager controlling everything that goes online? Well, good luck with that. There’s no motivation and penalty from those executives to get them serious about making you a big, fat, digital profit. So why did you put them in charge?

What to do: The one person who is ultimately responsible for the financial success of your web initiative must have their compensation directly tied to digital profit.

Newspaper recently came to grips with this sticky issue and is steadily replacing old school, newsroom managers with digital-first executives with biz-dev skills. They had to, as they saw Patch poaching their staff. They saw Facebook, DataSphere, and cable operators ramping up their local, online sales efforts.

At the recent NAB Las Vegas show, CBS Radio’s Dan Mason admitted to getting his staffers digitally motivated was still a big problem. “Our biggest frustration is educating and bringing along our own people” said the CBS Radio chief.

Dan also compared the threat of Pandora, to 8-tracks and satellite radio. Funny, the Newspaper industry made the same kind of dismissive mistake by blowing off Craigslist a few years back, and lost most of their classified advertising.

Have ya noticed? Local media CEO’s always boast about their Internet efforts at conferences. They claim growth in streaming hours, page views and Facebook fans as if any of that really matters. It doesn’t. What really matters is cash flow and digital profit margin.

In TV & Radio you have one person who calls the final shot. That’s the GM. If you have a “team” that’s in charge of the website, your screwed. You don’t have an Internet business model…..you have hobby.

Putting a finer point on it: you have a non-profit hobby that’s a time and money suck.

Watch this video clip that describes the growing digital threats that Radio and TV face in their local markets.

Filed Under: Front Page, Hyper Revenue Watch, Popular Posts Tagged With: , , , , , , , , , , , , , , , , , , , ,

Hyper Local Business Models for News Media

July 25, 2011 By

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:

Filed Under: Front Page, Hyper Revenue Watch, NEW HOME SLIDER, Patch & Hyper Local, Popular Posts, slider Tagged With: , , , , , , , , , , , , , , , , , , ,

Online Video Revenue

July 12, 2011 By

When will local newspaper websites and hyper local blogs start making money with video? Short answer: When they start sharing their video equipment with sales department.

For now, the big money in online video is NOT in editorial & news content. Rather, it’s in promotion, demonstration & advertorial-based video content. Some production companies like the Yellow Pages, Cable TV, TurnHere and AOL’s StudioNow are taking advantage of this fact.

Take a look at this short video promo that is targeted to small business.

It’s insane that newspapers and independent websites aren’t paying more attention to this trend. Instead, they’re still primarily focused on editorial & news video where journalists mimic the old school techniques of TV reporters. Investment in digital video like Flip-cams for the staff, Final Cut Pro editing software and training are good things. But who’s the genius that decided these smart investments were for newsrooms only?

Tracy Record of West Seattle Blog captures breaking news video next to the big boys

In theory, producing video-based stories or enhancing text-based stories with video seems powerful and compelling. In practice though, it’s been a money pit at the local level.

TV-like video ‘packages’ might work in a linear 30 minute newscast, but they usually fall flat when online. A well produced 3.5 minute report on the 11pm news looks sweet with footage of a fire, quick sound bites and an attractive field reporter. Place that same clip online and on-demand….and it usually gets limited viewership. I’ve seen it first hand in my work with TV. Even if you could get a $50 cpm, the limited video views will make it difficult to adequately monetize.

TIP: If you MUST find a way to sell your editorial-based video, offer advertisers a share of voice (SOV) in the pre-roll position. Bundle it with banners and other digital sponsorships for now.

‘Newspaper tried to make money with video, it doesn’t work’. Boy, do we hear that alot. But the truth is, online video DOES make money…..just not in the way local news sites have been doing it.

Lately, we’re seeing more anecdotal evidence that the enthusiasm for online news video is waning. Not from the video journalists, but from high level newsrooms & sales execs. These bottom line focused executives echo a common refrain in their weekly meetings:  even the best production value and subject matter doesn’t always translate into journalistic and revenue success.

Some culprits that contribute to this issue:

Does the video on left, bring ANYTHING of value to the editorial story? While the journalist is comfortable in front of a camera, this is just placing a camera in front of a radio talk show host. It’s not helpful to the viewer at all, and advertisers wonder why they want to be associated with this content. While the basic production quality is solid, it cries out for still image overlays or video b-roll of the issue being discussed.

Sound like too much work? Then don’t do this type of video. Especially if you can’t attract viewers and a sponsor.

 

When to Consider Editorial Video?

We recommend that video should only be used if the story can be made better by sound and motion, otherwise it’s just ‘shooting video for video sake’.

Editorial video can be done in 3 basic ways:

  • Story Teller A TV-like, fully produced ‘package’ that includes editing, stand-up reporter, graphics & narration. Typically 3.5 minutes in length.
  • Story Extender Raw footage that works as a complement & provides greater understanding to a text based story. Footage can be embedded within or adjacent to the body of the online text story.
  • Have to See It, to Believe It Example: by monitoring police/fire scanners, you may be able to capture some exciting fire footage, a 20 car pile-up, or a perp walk, etc. This type of video could go viral.


Filed Under: Front Page, Hyper Revenue Watch, Popular Posts Tagged With: , , , , , , , , , , , , , , , , , , ,

Publishers & Owners: Demand Web ROI

March 22, 2011 By

Here’s a peek at the latest keynote speech I’m preparing to deliver.

Each year, we throw capital and manpower at the insatiable beast known as the Internet. Usually with crappy results. We’re now forced to take a much closer look at the digital ROI of our newspapers, management teams, and the feasibility of some questionable, interactive business plans.

Public/private equity ( Alden Global Capital ) and owner/operators have grave concerns about two newspaper issues: their limited success with digital revenue, and the rapid growth and lofty valuations of Huffington Post, Groupon, Reach Local and Patch. Making matters worse, these new players are going after the same budgets that newspapers have gorged and relied on for decades.

This eye-opening session is not about online sales tips & editorial tricks. It’s not a ‘future is bright if we only change’ lecture. Rather, we call out the 800 lb. elephant in the room: why don’t we run our websites like our print business? ( where profit, margins and realistic tactics always come first )

Mel Taylor Media has first-hand knowledge of these issues, and the specific fixes that should be considered and applied. Mel Taylor has spent over 15 years working with both traditional media and online-only ventures, in their pursuit of building a profitable, online business. Mel’s ability to clearly communicate the issues and actionable remedies will make this session immediately valuable to all who attend.

Analysis & recommendation delivered in framework that will resonate with:

  • Publishers, owner / operators, COO, CEO, CFO’s
  • Financial institutions, private & public equity, industry analysts

Session also provides insight and specific recommendation about:

  • Determining digital asset valuations when buying or selling a media property
  • Is my property operating efficiently as possible?
  • Low cost & no cost technologies/tactics to consider.
  • Why, when and how to outsource & automate
  • Buy, build or partner? Mergers & acquisitions. The digital media roll-up is on!
  • What’s better — being an aggregator or aggregatee? Paywall pros & cons
  • Financial benefits of a ‘digital first’ strategy & employee culture
  • Is your VP of Digital primarily focused on profitability or page views?
  • Potential legal implications of aggregation, search, and fair use
  • Workflow, management & compensation. Breaking common chokepoints
  • Overview of key competitors going after local advertising budgets
Filed Under: bottom featured front, Front Page, Hyper Revenue Watch, Newspaper, Popular Posts, Revenue Models Tagged With: , , , , , , , , , , , ,

Key Executive Multi-Media; Patch

February 24, 2011 By

Just got back from the Multimedia Key Executives Conference in St. Petersburg, Florida. It was a record breaker as the SNA, Inland Press and SNPA joined forces to create this ‘must attend’ event of the season. Close to 500 attendees from the newspaper industry gathered for 3 days where digital was a top priority.

The Renaissance Vinoy Resort was filled with publishers, ad managers, owners and vendors that were seriously focused on the challenges and opportunities that the Internet is serving up. Of note, it was refreshing to see a full house right up until the end of the event on Wednesday afternoon. It was a fully packed, 3 day conference.

Clark Gilbert from Deseret Media in Salt Lake City set the tone as keynote speaker. He pulled no punches and knocked it out of the park.

I was especially grateful for being invited to speak at this prestigious gathering. After watching Clark deliver a frank and very compelling session…I just HAD TO take it up a notch with my session focused on how newspaper can beat Patch and other local competitors.

View or download my presentation deck below.

Key Take-Aways

  1. Run web the same way you run print; #1 Profit, #2 operations, #3 editorial. In that order.

    Photo: News & Tech

  2. Is person running your digital assets financially motivated to make a profit?
  3. Do top managers, CEO’s & owners have a strong grasp of digital competition and tactics to win? How can someone manage what they don’t fully understand?
  4. Do sales reps have compensation plans that feature bonus & penalty?
  5. Do reps know which competitors are offering digital products to clients?
  6. Are you cheapening site by using 3rd party and remnant ad networks?
  7. News is not a business model.

 

Key Executive Conf.; Your Local Dollars

Filed Under: Front Page, Hyper Revenue Watch, Popular Posts Tagged With: , , , , , , , , , , , , , , , ,

NENPA; Newspapers Win w/ Digital

February 13, 2011 By

NenpaThe New England Newspaper & Press Association had a great turn-out in Boston on Feb 11 & 12, for their 2011 convention.

Here’s the deck I used for the Internet Revenue & Business Model sessions.

Thanks to Dan Cotter; executive director of NENPA for inviting me to put on workshops focused on newspapers leveraging digital to grow audience / revenue share, and how to compete against the new threats of Patch, Reach Local, Groupon and other hyper-local publishers.

This popular, annual NENPA event is devoted to helping newspapers re-invent themselves for a what promises to be a dramatically more competitive marketplace.

NENPA 2011 Winter Convention. Winning with Digital

Filed Under: Front Page, Hyper Revenue Watch, Popular Posts, Presentations Tagged With: , , , , , , , , , , , , , , , ,

For Publishers Only. Website Money Pit

December 10, 2010 By

Description of a training session and workshop that I do more often.

For Publishers Only. The Un-varnished Truth about Newspaper Website Business Models.

Mel Taylor Media exposes why most local media still operate their digital assets in the red. Even if web revenue & traffic have grown over the years, your likely treading water and losing share, no matter how much money you throw at it.

This session is not about sales tips & editorial tricks. It’s not a gee-whiz technology talk. This is not a ‘the future is bright if we only change’ lecture. Rather, we call out the 800 lb. elephant in the room: our sites are not being run like our traditional print business; where profits must come first.

Mel Taylor has first-hand knowledge of these issues and the mandatory fixes that must be applied. He has spent over 13 years working with traditional media and online-only ventures, in their frustrating pursuit of building profitable online businesses.

Topics discussed:

  • Pros & cons: the vendors of Internet services.
  • Attracting or making 3rd party digital investments
  • Who’s driving your Interactive bus? Do they have the proper license?
  • The enemy within. Rooting out the inside saboteurs
  • Outsourcing & cost reductions via the latest Internet technology
  • Killing the sacred cows. Stuff that doesn’t make sense anymore
  • The Checklist. 10 questions to reveal the limits of your online business model.
  • They’re quietly eating your lunch; stealth competitors in your own backyard. (Patch, etc)
  • The 100% solution. The only HR & commission structures that work for Web.

Session also provides well-documented examples of how local media is using in-expensive tech and tactics to increase editorial coverage, cut costs and drive new revenue. Examples:

  • Gannett outsources some ‘soft’ editorial creation to companies like Demand Media. Why this is smart, and how it allows Gannett to focus on hard news.
  • Pasadena media property uses ultra-low cost, internationally based call-centers for setting up small biz appointments. Instead of expensive reps spending time making cold calls, they’re on the street with average of 5 qualified, new-biz sales calls a day.
  • Partnerships with independent online journalists. Some were smart. Some were really dumb.

> Philadelphia Magazine uses TechPhilly.com for coverage of regional tech issues.
> New York Times uses BayAreaNewsProject.org for coverage of San Francisco
> Allbritton Communications pulled together 200 bloggers in Washington, DC area.

Filed Under: Hyper Revenue Watch, slider Tagged With: , , , , , , , , , , , , ,

Web Revenue Mistakes of Broadcast & Print

September 1, 2010 By

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 !

Filed Under: Hyper Revenue Watch, Newspaper, TV and Radio Tagged With: , , , , , , , , , , , , , , , , , , ,

Hyper Local News & Revenue

June 24, 2010 By

The hyper-local, 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 AOL/Patch, Reach Local, Groupon, Hyper-Local Incubators, and other indie efforts are doubling down and are going in for the kill.

Yet, when it comes to big media’s foray into this space, it’s full of well intentioned, but often misguided efforts. Here are recent items of note, on what’s working and what’s not…..in building profitable, hyper-local initiatives:

  • Jan Schaffer from J Lab was recently asked if any online news projects will be ‘sustainable’. She answered: “time will tell”. Since Jan is admittedly not an expert in sales and advertising, why do we even ask her questions like that? These so called ‘elusive’ business models we’re supposedly looking for…already exist. Pure-plays (Reach Local, DataSphere, Groupon, etc) are already using these models to grab local market share right now…right from under our noses……while we continue to “discuss and explore”.  Read Jan’s speech here.
  • Philly.com’s incoming CEO; Greg Osberg recently 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 recently 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.
  • Early efforts from Tribune showed promise, but stumbled a bit. Read why a local blogger pulled out of ChicagoNow network.
  • 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.
  • AOL/Patch reaches out to local website publisher in Altadena, California…. tells Patch: ‘no thanks’.
  • 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, 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.
  • Albritton’s TBD.com in DC, won’t pay bloggers directly — instead, the sales staff will work with interested advertisers. This does not sit well with local online writers.
  • CUNY’s New Business Models for News, and NYU provide excellent editorial guidance for The New York Times’ hyper-local effort, called The Local. But for some reason, they were also given the responsibility for sales & revenue leadership. With little advertiser support, we fear that The Local could be considered a failure and potentially shuttered, due to poor financial performance. It’s local sales strategy seems non-existent. We wonder if NYU’s Jay Rosen will be making sales calls, once he launches the East Village NYC version of  The Local. UPDATE: July 1, 2010…NYT unloads their Jersey hyper-sites to indie-blog; Baristanet.
  • YouTube is experimenting in San Francisco, inviting local VJ’s and digital journalists to contribute. But we gotta ask….why just post your video on YouTube? Sell your footage to local TV or Newspaper instead!
  • Sites like TheBatavian, NewzJunky.com and NewJerseyNewsroom, 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.

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