This is an idea I pitched the NAA on presenting almost 2 years ago. I found it as I was cleaning out a drawer so I scanned it to get some feedback. The pitch has some flaws in it but the idea is beginning to take form especially with Webvisible, ReachLocal and OrangeSoda making major inroads to the local market.

How are these partnerships working out?

Digital Media/ Connections Track

Session: New Revenue Streams- Non traditional ideas on increasing revenue.

Developing a Hyper-Local Marketing Agency

Objective: To introduce developing an agency approach with the highest potential businesses in each market; developing a consultative relationship for achieving the long-term incremental revenue gains newspapers seek.

The current sales landscape

Just about everybody searches online. That’s what every study in the past 18 months has concluded. Whether users are searching Google, Yahoo, Ask, MSN or a local media site, they get the same basic results: national advertisers with a sprinkling of top local businesses. These local businesses can gain a lot from these “pre-qualified” leads when they tap into them properly to grow their business.

Newspapers are still the strongest business partner in every local marketplace. Yet newspapers have been slow to find the most effective way for their local businesses to grow their businesses using the web and search engines. Moreover, newspapers tend to pitch their products first. In print, the “pitch your product first” plan works, but on the web that plan doesn’t ensure success. Instead it leads to multiple product presentations with nothing tying them together and the advertiser not having enough information to set expectations.

Minimal revenue growth, the ultra-competitive landscape of national and regional players vying for local business attention, plus new technologies all demands a different strategy.

A new approach

To create incremental revenue over the next 10 years newspapers should consider a new approach: branching out into the “agency business” and targeting/helping local businesses in their market be better online. In this consultative agency role, businesses are viewed as businesses with opportunities to fulfill, not as advertisers.

A newspaper would develop an “independent agency” business, separate from the newspaper, to manage its online advertising. Success for the agency would be focused on growing the newspaper’s influence in the local online marketplace, not revenue per se. This newly formed agency would gather key information and metrics from their markets to help local businesses make crucial decisions about their online role to benefit their ROIs.

What kind of decisions would the agency help with? It would help the local plumber, pizza place, or doctor understand how to purchase keywords; how to determine if a banner ad is better than a text ad for exposure; how to track and modify campaigns for better results, etc. All this will lead to increased revenue and low churn.

Presentation highlights:

· Why “in with the new” doesn’t always mean out with the old

· The benefit of establishing a separate business versus just a separate department

· Four key agency departments: Business Development, Research, Design, Fulfillment

· How to position the new “agency” in your market

· Targeting agency customers

· Revenue potential (ROI) of a separate business/agency model

Why care?

The current processes lead to diminishing (or disappointing) returns. Consider this:

• The current sales process in most newspaper markets is only yielding a small, standard yearly growth rate in advertising revenue (1-3%).
• Current advertisers are pitched the product of the month or the new online bundle with little thought to an advertiser’s ROI and their needs
• Current processes at newspapers and their staffing allow only for maintenance of an existing customers.
• Eighty percent of the local businesses do not have a relationship with the newspaper.

It’s been a busy and very productive three weeks at the DPC. Besides doing all the basic things we need to do to make this a successful venture we have also been solidifying some partnerships that will help us prove our theory.

In a nutshell we believe that media companies don’t need fancy tools to succeed, they need a plan. The over complicated online tool has been tried and failed. Our goal is to lead with a revenue plan and throw in some really cool tools to help develop a sticky audience.

Our strategic partnership with ItzPublishing will prove that local media can develop a new revenue stream from the ‘longtail’ while increasing the opportunities for existing clients. If our plan works the way we know it will, we will generate an average of $100,000 per category roll out for each of our media partners.

Our goal is to help local media ‘Monetize the Intentions of their Users’.

That’s actually pretty simple….

Our research will provide those intentions, our sales force will enlighten the customers about the possibilities and our products and content will direct the consumer to what they are looking for.

We have just created a Facebook page. It’s open to everyone so if you are interested in regular updates please join.

This week, after speaking with Chris Tolles, Greg Sterling wrote post detailing his opinion on the what the newspaper would look like in the future.

Of course, I gave my opinion-

To get to the point you are describing the newspaper would have to know specifically what makes them unique (casinos in AC, etc) and then do something they have a hard time doing- Audience Development and Consumer Awareness.

I believe the model of the future will look something like this-

- Strategic FREE Distribution
- A web focus that make the site a destination with heavy focus on RSS and SEO so they can deliver content anywhere the user wants and be found easily in search results.
- Luxury priced Home Delivery for those who really want it.

For community newspapers the ad networks will only be a drop in the bucket unless they can figure out a way to get more page views or deeper targeting (to drive up the cpm)

The agency approach along with a Machiavellian approach to ‘Self Service’ where you provide the local business with options to advertise with you, your competitor, or any medium that can deliver results. In this scenario the newspaper becomes the Hyperlocal agency and makes money off the placement, etc.

It’s a nice post and it made me think.. What do the talented people in our industry think the future looks like?

On that note, I read an eye opening post by Howard Owens describing the amount of key talent that has left the industry. On a bright note, I just heard from a trusted source that at least one person on the list will begin working as early as next week.

There is a growing trend within the newspaper industry that I believe is very positive.  That trend is to sell their aggregate audience instead of selling product by product.

This strategy will definitely cause a lot of the sales people in the industry today to find new jobs because it is more complicated than selling the traditional way. Newspaper execs need to be prepared for the mass exodus and also understand that it’s a good thing because the majority of sales reps can’t transform into effective multimedia sales champions.

The sales people who actually cut it will quickly move into leadership positions and help continue the transformation.

Like I said, this is a step in the right direction for the industry and if they can figure out a way to go after the non traditional advertiser it will help them get their fair share of the $13.1 billion of local revenue up for grabs in the next few years.

Getting every sales channel motivated to become the ‘Market Leader’ is very important. For the purpose of this post I am describing the sales channels as:

• Print/Broadcast Sales Team (Geo and Category)
• Digital Sales Team
• Call Center

Not everyone on your sales team is ready to help you earn the ‘Market Leader’ status. From past experience, I would make an educated guess that 75% of your print/broadcast team and your call center are not and will never be equipped to sell at the level you need them to. Your digital team is in much better shape. Half of that team will help you accomplish your goal.

Developing your sales channel starts with marketing your products internally to your staff through sales kickoffs, training sessions and sales blitzes. Make sure everyone has equal opportunity to successfully sell.

After 4 weeks gather your sales team and quiz them on your products (print and on-line). This will give you the opportunity to see what they know and what they are talking to your advertisers about. You will find out that a high percentage of even the successful sales executives didn’t retain the product knowledge.

Follow up training is a good next step. Some sales executives may need individual attention. You only have a limited number of sales positions so every sales position needs to be filled with someone that is going to help you achieve your goals.

The goal of the quiz is to help segregate your sales team into-

• Multimedia sales
• Print or Broadcast Only sales
• On-line Only sales
• You are fired!

Understanding the strengths and weaknesses of your sales force will only make you a better team and help you figure out where to plug in a Tiger Team that can help you move the needle where you are weak.

This level of focus will move you one step closer to ‘Market Leader’ status.

Note: We will discuss how the Self Serve Interface fits into the plan for your sales channel in a future post.