Dave Chase

These articles are the work of their author, and do not necessarily reflect the opinion of nor an assignment by OJR.

The next step in advertising: Local media as merchants?

May 11, 2010
If there's one thing we've learned from the Internet it is that if middlemen don't add enough value, their days are numbered.

Local media companies may not have thought of themselves as middlemen—but that's what they have been for advertisers. When I used to buy advertising a decade or so ago, I felt it was my job to do what I could to get the media provider out of the middle between my brand and the customers we desired. For example, we did a lot to drive a direct relationship, including encouraging them to register with us so we could communicate with them directly later through e-mail. If we were doing it today, we'd add Facebook and Twitter into the mix.

Back then, there was more than enough ad revenue for the local media company to sustain their business—so much profit, in fact, that some companies got complacent. Just as railroad companies should have realized they were in the transportation business rather than the railroad business (and thus they missed the opportunity to get into the auto or air transportation business), media companies should recognize their business purpose is to connect their audience with products and services the audience desires. Without that business purpose, they can't fulfill their editorial mission.

The traditional mission of a media business is to collect a loyal audience with high-quality information, and let the advertisers worry about how to sell stuff. The media companies sold the audience, not product or services.

Retailers historically aggregated consumers for product makers—for example, giving Proctor & Gamble a way to sell to people in Poughkeepsie. But many retailers didn't add a lot of value beyond offering consumers product selection and price. Retailers such as Best Buy have realized that and have started to add other value to the experience (e.g., the Geek Squad). Meanwhile, one of the retailers' biggest costs has been advertising—circulars, broadcast advertising or something else.

Today, media companies on the Web aggregate consumers around specific interests and product niches (technology, cooking, travel, music, movies, sports, finance) much more efficiently. I believe today's media companies will need to get directly involved in commerce to ensure a sustainable business model. The Times (UK) and Burda (Germany) are both reported to be realizing a substantial portion of their profits from direct commerce enabled from their websites, selling third-party travel packages and other goods and services. Local media companies such as the Washington Post are either partnering with group-buying sites such as LivingSocial or rolling out their private label competition to Groupon and LivingSocial. More...

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Moving Beyond Traditional Display Advertising: It's All About ME

April 16, 2010
To date, nobody has found the holy grail of advertising models to support thriving hyperlocal sites. Traditional display ads, even with rich media, are only a start.

For the most part, these are still simply online facsimiles of offline ad types. Isn't a banner ad nothing more than a print display ad brought online with a few bells and whistles? We need ad types that take advantage of the unique attributes of today's digital media—whether it's the social nature or immediacy of the web.

There are some emerging models that excite me, because they truly take advantage of the medium even if they are borrowing concepts from the past. I believe local sites should begin moving beyond traditional display ads by deploying three of these new formats: coupons, group buys and deals of the day.

All help overcome the issue online ad sellers frequently face. Sites may have done a terrific job of delivering traditional ads, but too many advertisers still say "Gee, I'm not sure if that ad worked or not."

What these three examples provide are models that are easily understood by small business owners. In a world where the revenue per customer is relatively low, a local publisher can ill afford to spend a lot of time convincing an advertiser that he or she got a great deal. More...

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How the Vancouver Winter Olympics (and other big stories) can help a hyperlocal news website grow

February 11, 2010
Hyperlocal sites, by definition, are focused on their local community. However, periodically something happens in your community that has national significance that can draw some broader attention. More important is how it can accelerate your reach within your community by exposing your site to a new set of local people. This latter form of traffic is the most sustainable.

The reality for most communities is that their neighborhoods either never received coverage from local media or that coverage has pulled back as budgets have tightened. This has left a big opportunity for hyperlocal sites to get a marketing boost like no other. I will share how that has worked tremendously well for my local site -- www.sunvalleyonline.com -- so that you can take these experiences and apply it into your own site. I will also share how we are being proactive with the upcoming Olympics to draw more audience. Our site has a local connection with the most prominent snowboarders on the U.S. Olympic team -- Lindsey Jacobellis, Seth Wescott, Shaun White, Nate Holland and Graham Watanabe -- that we are going to utilize to provide our community with a perspective they won't get from NBC.

Curtis Bacca is a local the top snowboard/ski technician in the world with a small shop in town called The Waxroom that tunes skis and snowboards. No one has done the tech work for more gold medalists at the Olympics or X Games in the last decade. He had three athletes (Jacobellis, Holland & Wescott) competing in two events at the recently completed X Games and they came in first, first and second. He shared some pics after the event and was profiled by ESPN. He also provided his updates on the Waxroom page. Afterwards, he told me he was blown away with all people from our community and around the country who saw what he was doing and was psyched to do more at the Olympics.
More...

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15 criteria for picking a content management system for an ad-driven hyperlocal news website

January 20, 2010
One of the biggest early decisions a hyperlocal site entrepreneur makes is what Content Management System [CMS] they will use. One can think about this similar to picking a spouse. You are going to live with the decision day and night for a long, long time. Also, similar to choosing a spouse, each person has different criteria. I will share the criteria I used for my hyperlocal site (www.sunvalleyonline.com) so that you can consider them and prioritize them based upon your needs. Think through these criteria or your "spousal" choice may leave you feeling like Michael Douglas and Kathleen Turner in The War of the Roses.

Before I get into that, I will share my experience and scenario which gives you some perspective on my situation. I'm a tech industry veteran (~25 years) though my hands-on coding experience is ancient (~20 years ago) but as a non-technical person goes, I'm reasonably technical though I've been on the business and editorial side of Web properties the last 15 years.

Part of my background includes being part of the early team of Microsoft Sidewalk starting in 1995 where I ran a team that supported the cities, as well as about half the cities reported through me, so I've been working with CMSs in the local arena for nearly 15 years. SunValleyOnline (SVO) has been around for about 5 years and was built on a proprietary platform that hasn't changed in years. We are in the final stages of the transition from the old to the new site. SVO has been self-sustaining for a couple years with a small team of three people. We rely on a mix of community and staff contributions. I have personally blogged for several years and have used blogs built on Blogger and mostly Wordpress.

To jump ahead, there's lots of merit in Wordpress and the ecosystem built around it, however I felt it came up short on the criteria I established to make the decision.

Listed below are the criteria I used with a brief explanation. While everyone will have somewhat different criteria, I listed the items in priority order from most to least important based upon my experience and priorities. More...

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Time for newspapers choose between the DEC or IBM model

November 6, 2009
It is painful to watch the steady decline of newspapers. For some, I expect we're about to see the dead cat bounce as the economy turns around. This will only delay the inevitable. The challenge they face at this late date is immense but surmountable.

Their near death experience is similar to what Digital Equipment Corp (DEC) and IBM faced. Only IBM remains a blue chip market leader. However, IBM completely reinvented itself from a "big iron" mainframe and minicomputer driven company to the market leader in I.T. related services. There were some valuable assets that they were able to leverage but it took an outsider like Lou Gerstner to make that wholesale change happen.

Meanwhile, the vanguard company of the minicomputer era (DEC) wasn't able to make that shift and sold at a deep discount to Compaq (who in turn was bought by HP). It's important to recognize that IBM and DEC were in highly competitive markets. DEC along with countless other mainframe and minicomputer companies were unable to transform themselves and are mere footnotes of history. In contrast, the newspapers have largely operated in non-competitive markets by comparison. It will take a true newspaper leader and visionary to make this happen as opposed to someone just milking the cash cow until it withers and dies. More...

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Thought Leadership drives local media revenue

June 3, 2009
In an earlier piece "Local media survival depends on Low Cost Sales Models," I detailed the favorable economics of pursuing a broader base of advertisers if you employed a sales model appropriate to the size of ad budget. McKinsey had done some analysis that echoed the experience we have had setting up low-cost customer acquisition models using telesales-based approaches. A critical facet of developing this lower cost model is having very cost effective lead generation.

Today, most of what I have observed with local media is they are using phone-based sales methods akin to the uninvited and irritating telemarketing methods that can interrupt our evenings. Not surprisingly, these "script readers" have had very low yield. Script readers can be fine for simple things like setting appointments but that's a far cry from closing meaningful business. The successful alternative is to become invited and to establish a relationship with prospective customers through high quality lead generation.

There are many different tactics for lead generation but the one I've seen perform the best has been the organizations that establish thought leadership in their field of expertise. More...

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Local media survival depends on Low Cost Sales Models

May 29, 2009
Amidst the doom and gloom of local news media, it's lost on many that there's a sector of local businesses that can provide a 20% lift in revenue. McKinsey did an analysis using a market of 1 million people to determine the revenue increase a newspaper could get if it attained a similar share of ad budgets in small and medium sized businesses (SMBs) as it had with larger local businesses. It represented a 20% revenue increment over where they are today. In an environment where "flat is the new up", that's significant. It does require a fundamentally different sales approach than what most local media have practiced which I outline below.

In my experience as a revenue traction consultant and local publisher, I have seen 20% growth is attainable as we saw that with a number of clients in Q1 when most businesses saw a decline in revenue. McKinsey also found that already the penetration of SMBs spending online is greater than the penetration of SMBs spending in newspapers. Though we often think of smaller businesses being behind larger organizations, it turns out they have deeper penetration with online than any other form of measured media. It is worth noting that SMBs aren't simply interested in display ads, however. McKinsey's findings echo my experience that SMBs have interest in other online marketing tools like Search, Email and other non-display tactics.

In general, we have seen a gap between the high-end of the market where shoe-leather sales models are still appropriate and the low-end of the market where some local media have pursued self-serve models. Our experience has been that added sales focus in the mid-market will increase sales yield. This isn't lost on companies like ReachLocal, Citysearch and others who are grabbing swaths of the market that local media has every opportunity to capture with the proper focus. One of the ways to differentiate versus the national players is outlined in the follow-on piece on thought leadership I outline below. More...

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Top 10 business mistakes that newspapers must avoid as they go online-only

April 1, 2009
I'd like to welcome the Seattle Post-Intelligencer to the world of pureplay, online-only local Internet sites. They have a heckuva a jumpstart with their level of web traffic which any local site would be thrilled to have. Unfortunately, there are many other items that they must put in place to succeed. To their credit, they have taken some good first steps. The first and painful step was reducing headcount which reflects the reality that revenues will be lower for awhile. However, no business can cost cut your way to a successful business. The second laudable step was outlining how they plan to position themselves as a digital marketing agency with their advertisers selling everything from Yahoo display ads to paid search from all the major search engines.

Nonetheless, this is all moot if they don't develop a viable revenue model to go along with it, something they have no apparent experience with since the Seattle Times had done all of their advertising sales as part of their JOA. The painful truth is that 99% of the local Internet plays have proven how NOT to develop a sustainable model. Some newspapers have claimed their online properties are profitable but this is a suspect claim since they weren't burdened with the costs borne by the print product. In other words, most local online plays are subsidized by an offline counterpart which the P-I no longer has. More...

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Dave Chase

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Articles:

The next step in advertising: Local media as merchants?

Moving Beyond Traditional Display Advertising: It's All About ME

How the Vancouver Winter Olympics (and other big stories) can help a hyperlocal news website grow

15 criteria for picking a content management system for an ad-driven hyperlocal news website

Time for newspapers choose between the DEC or IBM model

Thought Leadership drives local media revenue

Local media survival depends on Low Cost Sales Models

Top 10 business mistakes that newspapers must avoid as they go online-only

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