How to Beat Patch


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How to Beat Patch

  1. 1. Digital Revenue Solutions for Newspaper, TV, Radio & Hyper-Localand…. Updated 12/22/2010
  2. 2. • Help Wanted What Newspapers• Real Estate• Auto• Coupons Lost over past 15 years• Inserts• Grocery• Movie Studios• Dominance• Share
  3. 3. • Poach Newspaper execs• More advertiser choice• Lower expenses• Digital first• Aggregation
  4. 4. Agenda• Who, What, Why• Potential plans• How to beat them• Other competitors
  5. 5. WebWhy Newspaper & Local Media Still Struggleand how Patch can take local share…
  6. 6. Cannibalize Print ?
  7. 7. Web?I’m thinking retirement… bee-yatch !
  8. 8. College Professors & assorted brainiacs“searching for sustainable business models…yada, yada …crowd-sourcing…entrepreneurial engagement…yada yada…grass roots via cloud…..yada…let’s do some more research….let’s tweet it…”
  9. 9. Hmmmmm…..
  10. 10. His lips are movingso he MUST be saying something smart.
  11. 11. Um, yeah, Mel….thx for stopping by• Our traffic is up• We’re trusted news brand• Patch is lame blog• Our sales plan is just fine• Our VP Interactive speaks on many panels
  12. 12. Put TheData DownHit The StreetNOW
  13. 13. No….but they’ll get a bit naughtywhen they gotta hit their numbers
  14. 14. ROAD KILL ?Local Bloggers Paywalls
  15. 15. Local blogs & indie-sitesgetting nervous?
  16. 16. Run Web like NewspaperThink like Publisher / Owner in this order ! 1. profit 2. operations 3. editorial
  17. 17. What is ? Tim Armstrong • AOL’ s Hyper-local play to grab local ad dollars • Run by ex-Googler John Brod • Editorial & tech first • Sales ramping upWarren Webster
  18. 18. Why is Patch doing this?• AOL’s dial-up dead• AOL’s content-play struggles• Need new rev stream• They see local media downsizing• 50% of local web budgets, still on sideline• Local media protecting legacy business
  19. 19. Patch: Priority Plan• Local news source• Trusted community partner• Newspaper replacement• Create excellent journalism
  20. 20. Local Ad Dollars
  21. 21. Local Online Advertising Share Online Only Online Only Pure Play 47.2% Pure Play 51.7% Newspaper Newspaper 27.7% 23.6% 2008 2009Borrell
  22. 22. 600 Sites…so far (105 in California)
  23. 23. Communities Avg size: 50-70k Delaware County Bucks County Philadelphia Chester County Lehigh County Main Line
  24. 24. Growing like a Weed
  25. 25. Revenue Streams• Local• Regional• National
  26. 26. Short Term Objective• Frantic pace of roll out• Get hooks into local market…before others know what hit them• TV, Radio, Newspaper, Yellow Pages…won’t respond quickly?
  27. 27. Strengths• Digital first• No legacy baggage – Not protecting “way we always do it” – Not impeded by old school• Cost effective content creation• Variety of sales tactics
  28. 28. Weakness (for now)• Unfamiliar outsider• Questionable local sales savvy• Limited local relationships• Clunky corporate structure• Not as nimble as YOU
  29. 29. Patch Open House Suburban Atlanta
  30. 30. Patch Marketing Staff… Freshest Breath in Town
  31. 31. Pay & Positionso Local Editor; $40k o MacBook Pro, camera, smart phone o $500 freelancer budget per month 401K matcho Ad Manager; $60k Performance bonus o Managing group of sites Medical & Dentalo Regional Publisher; $80ko Regional Editor; $80k o Oversee group of 12 Patch sites
  32. 32. Sales Job Postingo Be local online ad expert for small businesso Host WEB 101 seminars for small businesso Attend chamber & trade functionso Convince buyers to shift budgets to digitalo Visible presence in business community
  33. 33. Wanted: Online Sales ExecutiveYou’ll be working closely with local advertisers, as their local online advertising expert. You’llknow your own platform (and others) backwards and forwards so you can present completeadvertising solutions.You may decide to host local seminar on how to achieve the best results by advertising web.As the top local business executive, you will attend chamber and trade functions, getinvolved in community groups, head up charitable efforts and maintain a highly visiblepresence in the business community.Local Online Sales Exec is responsible for advertising sales to businesses in local markets.Will sell banner ads, e-newsletters, video & more. You will present promotionalopportunities and display options to store owners/management. You will handle ad sales,inventory management and “own” the online advertising for assigned local markets.As the Local Online Sales Executive you will also be responsible for assisting in coordinatinglocal event sponsorships and attending them, possibly on weekends.
  34. 34. POACH• Newspaper• TV• Cable• Yellow Pages• NAA• Bloggers
  35. 35. Current Ad Offerso Self-Serve for $15 cpm….discontinued o Now: flat fee for SOV (share of voice)o Free Classifieds: merchandise, services offered o Small fee $20 auto & jobso Directory up-sells o Enhanced video o Fee to post couponso Newsletter Ads
  36. 36. No phone?
  37. 37. other LOCALcompetitors
  38. 38. Yahoo Local• Now in 30 US neighborhoods• California, Michigan, New York, San Fran, Brooklyn• Content from local pubs• Community reporters• Feeds from other pubs
  39. 39. 75% of Deal Market Average User Single Female 18-34 Income: 70k+Users2008: 400 k Employees Dec 2009: 1242009: 1.5 mil Dec 2010: 3,1002010: 40 mil
  40. 40. o No risk… ‘only pay if people buy’o Customers not clickso Performanceo 66 % open rateo Gets 50% of sales revenue
  41. 41. Crazy Growth (said no to recent Google offer)Many on this call are helping them… running their adsGroupon is HARVESTING your readers
  42. 42. HARVESTING your readers
  43. 43. • Over 45 US markets• Feet on street• Search Engine Marketing• Display / Banner• Video• Multiple digital solutions
  44. 44. • Active advertiser count 13,200 to 16,700• Revenues up $48m to $70m• Add senior sales 143 to 246• Add junior sales: 256 to 395
  45. 45. Tags
  46. 46. Boost
  47. 47. Pandorao 60 million users o About half of all Internet listening o Avg 13 hrs of listeningo $50 mil revenue. Now profitableo 45 of top 50 national advertiserso Growing sales force o San Fran, NYC, LA, Chicago, Detroit, Dallas, Atlanta
  48. 48. PandoraLocal Targeting of Ads o Geo-targeting o By format o Audio, Video, Display
  49. 49. Now Hiring• Advertising Sales Representative - Oakland, CA• Senior Account Manager - Chicago, IL• Advertising Operations Technical Lead• Inside Sales Manager• Manager - Pricing and Yield Management• Online Ad Trafficker• Sales Planning Supervisor• Senior Advertising Project Manager• Senior Revenue Analyst• Vice President - Research and Marketing
  50. 50. o Quickie hyper-local sites for local TVo No upfront costso Call center pitches local biz in your nameo Rev share approx 60% to DataSphereo Primary relationship w/client. Retains data
  51. 51. OutsourcedLOCAL SalesDataSphere = SmartWTSP TV = Dumb
  52. 52. Take This Test• What % of print clients buy web ?• What % is sold local direct ?• Plan to reach non-print ?• Know marketing plan of clients?• Are your managers in the field ?
  53. 53. slaughter Web Sacred Cows• Need more page-views• Editorial controls site• Remnant, 3rd party ad networks
  54. 54. Beware the BS• We hit our (very low) web budget.• Web rev up by 500%. (off low comps)• Web traffic is strong. (distraction from profit margin talk)• We’re doing fine. (compared to other industry losers)• Print is where $ is. (yet, web is fastest growing rev stream)
  55. 55. Newspaper USP unique selling propositionWhat can Newspaper offer…that PATCH can’t ?
  56. 56. Newspaper USP• High % of local reach• Feet on street• Local content creation• Client relationships• Brand familiarity• Print / Traditional distribution
  57. 57. How Newspaper WinsCombine Newspaper USP with New Digital Tools
  58. 58. BROADCAST or PRINT Targeted* Tweets* Facebook Online Promotion* Messages Integrated Campaign Build Database * Download coupon * Join contest * Friend list * Watch video * Twitter * Subscribers Capture: * Email * Twitter * Facebook fan
  59. 59. Mandatory Steps for Success
  60. 60. Treat WebAs Business Run it just likeyour Newspaper
  61. 61. Remove InternalSabotage
  62. 62. Overhaul Comp• Revenue per rep & manager• New business per rep (per month)• Grow % of current clients using web• High commission rate: new clients• Low commission rate: transactional• Bonus & PENALTY
  63. 63. Digital Sales Training Who does most training? It’s a FACT. More training = more revenue
  64. 64. Bigger Not Always BetterREDUCEcommodity page-viewsGROWhigh ‘advertiser value’
  65. 65. simplify
  66. 66. why do we talk like this? • cpmconfusing for client & sales rep ! • pageviews • uniques • click-thrus • weird vocabulary • monthly pricing Endorsed by Internet Expert: Shemp Howard
  68. 68. DUMBNational Ad Networks( at local level )REMOVEfrom home-page & section frontsConsider day-parting
  69. 69. How GREAT sites lose money> No Super-Premium Ads> The only local ad is pushedoutside of content area> Low CPM ad networkssucking up home pageof this otherwise strongnews-site.
  70. 70. Can’t sell premium uniton home page?
  71. 71. Smart Practiceweekly instead of monthly rates soundsexpensive $ 400. per month soundsreasonable $ 95. per week
  72. 72. ‘Your cpm is too high’ Interactive Media Queen Avoid This Nonsense….instead….sell flat fee to local/directs
  73. 73. how local bizdecides to buy web • loves your newspaper • design & tech • editorial • twitter & facebook • audio & video
  74. 74. Ad Mix do they seelocal competitors?
  75. 75. Super Premium Ad Units
  76. 76. multiple uses • Rte 9 is closed Breaking News • Lady Gaga tix on sale Friday • Phillies beat Astros 3-1 • Deal of Day Sponsored • Coupon download Promotions • Win Trip • Ticket Raid location • Stand by rate now avail Market to • Home page unit now avail Advertisers • Spring special 50% off
  77. 77. LEADSNew Business Development
  78. 78. Cold CallingPhone BlitzSTINKEROO
  79. 79. #1 Current Print ClientsMeet Dick. 25 years in the Newspaper biz.Always hits his print budget without fail. Hi.Dick always wins sales contests, like this I’m to a tropical island. But because Dick isa print-sales superstar, he gets a pass whenit comes to web.Dick NEVER pitches web. Yet 90% of Dick’sclients buy alot of digital.Dick’s print clients buy online video, SEO,Groupon, banners and social media….…from Dick’s competitors.Dick’s clients LOVE him. They would buyWeb from Dick……if only he offered it.
  80. 80. #2 Call Center to Set ApptsKeep Sellers On The Street.Use classified phone room down-timeto set up appointments…or consideroff-shoring this activity to countriesthat would LOVE this job.Your sales reps should be in front ofclients and potential clients, as muchas possible.Expensive reps & sales managerssitting behind a desk making a fewhalf-hearted cold calls, is a poor useof limited resources.
  81. 81. #3 Web 101 forLocal Business Seminars
  82. 82. Web 101 for Local Business Why ?Local biz wants to buy web… • confused / lack of knowledge • doesn’t totally trust sales rep • think Google or website is enough • never been offered web
  83. 83. Web 101 for Local Business Benefits• Provide web education to local biz > they buy more web !• Immediate web revenue• Sales reps get trained• Better than cold call• Superior, qualified lead generation
  84. 84. Test Yourself… Higher score, better chance to beat Patch Compensation Web 101Bonus, Penalty, MBO’s for Local Business All Staff Training SellManagement & Owners Non-Print Products Simple Packages…Job Description Refresh No CPM’s Online Media Kit, Reporting Structure Direct Contact to Rep Plan to Reach No Ad Networks Non-Advertisers
  85. 85. WatchDeseret News, Salt Lake City Newspaper..Broadcast..Web Clark Gilbert Digital Rock Star
  86. 86. WatchGawker Media Nick Denton Digital Rock Star
  87. 87. online video that pays Remember all that video stuff you bought for the newsroom? Take back half of it, and give it to the sales department.
  88. 88. Re-think EVERYTHING• Vendor Deals• Aggregation & RSS Reduce Costs• Local Indie-Journos via• CMS Platforms > Open Source• Local Ad Networks > Crowd Source• Sales-Based Video > Revenue Share• Management
  89. 89. The New Workshop from Mel Taylor Media Online Business 101 for Editorial, Programming & Web ProducersWhen content creators understand online business models… they create more advertiser-friendly & profitable websites
  90. 90. Local Media Primary Primary Potential Position Background Responsibilities Weakness / Limitations • Owner • Increase shareholder value • Delegate strategy to content first executive Building • Manage overall operations • Thinks only brand extension strategy • CEO / COO • Drive top line growth Profitable Business • Over reliance on internal, traditional managers • Investor • Increase profit margin • Tough keeping track of online competitors • Build & manage digital platforms • Little or no direct sales & revenue experience VP Digital Content & Tech • Drive online traffic • Compensation primarily based on traffic • Content & tech development • Employs content first, not profit first strategy Local Sales • Sell traditional inventory • Prefer to sell traditional Traditional Sales • Sell web inventory (secondary goal) • Limited or no web sales training Management • Manage sellers • No web business model experience • Compensation favors traditional sales • Traditional media creation • Prefers traditional content development Local Content Traditional Media • Web media creation • Thinks only brand extension strategy Management • Increase audience numbers • Limited or no web development training • No web business model experience • Sell traditional inventory • Prefer selling traditionalLocal Sales Reps Traditional Sales • Sell web inventory (secondary goal) • Limited experience selling web • Limited or no web sales training • Compensation favors traditional Why Traditional Media Struggles w/ Online Revenue Growth
  91. 91. TOP 10 Revenue Mistakes of Local Online Media 1. Management, owners & CEO’s lack specialized web training 2. Dangerous thinking: ‘selling web cannibalizes print sales’ 3. Limited web training of sales reps 4. Management structure conflicts 5. Poor attention to fast changing, online environment 6. Setting web budgets too low 7. Ineffective inventory & yield management 8. Confusing media kits, sales packages & pricing 9. Director of Interactive; tech & content background only 10. Over-reliance on vendors & research for sales strategyRead full report here:
  92. 92. Middle-Man Channels Advertisers benefit from Traditional Channels New Channels new, multiple ways for reaching local consumer for reaching local consumerof reaching local consumer Niche Sites Newspaper Google Places, SEM, FacebookWants to reach local consumer TV Patch, Advertiser Hyper-local Local Consumer Radio Groupon YP360, Direct Mail Reach Local Directories Hulu, Pandora Direct Relationship between advertiser & consumers, avoiding middle-man channels EX: Twitter, Database, Blogs, Social, Mobile
  93. 93. Advertisers Content • National, Regional, Local Local Media Eco-System • Laid off journalists & photographers • Traditional media news • Moving dollars online Business Models that Support Local Journalism • Indie-sites & pro-am bloggers • Pro-active plan that exploits economic pressures • Watch Dog Journos • info & pubic domain data feeds Agy com Local Ad Network • Enables local commerce, that subsidizes local news • Community & citizen participation • Proven revenue management systems (RMS) • Move quicker from investor support, to self-support Traditional & Digital • Leverage efficiencies of outsourcing and open-source Local Ad Network Revenue share Fees Agency commission Marketing Services • Multiple online & offline revenue streams • Scalable via networks, franchising & co-ops Sales, Marketing, Training, Tech Co-op & Business Support EfficienciesRev share Self-serve, Outbound tele-sales RMS & CMS Platforms Licensing fee and/or revenue share Fees, sponsorships Events & Training Workshops lead aggregation Stringer & Syndication & Licensing Per Diem & fees Creative • Marketing Agencies Outsource / Fees Hyper-Local Incubator Outsource / Fees Marketing • Promotions • Video, Indie-Producers News, Community, Services & Support • Event, Contesting • Designers & Developers for Local, Media Markets • Social Traditional & Digital Marketing Services Fees Destination Site Commission, fees & rev-share Aggregation, Curation, Editorial Display, search, lead capture Local Ad Network Rev share, Agy com CMS & RMS Platforms Co-op Resources Mobile, RSS, Email, Social Ad supported Licensing fee, Rev share For Independent Bloggers & Sites Sponsor supported • Sales support, network & services Events & promotions Fees Stringers, Syndication & Licensing and/or fees • Content network & syndication • Tech & back-office support • Pre-vetted platforms & apps Traditional & Public Media • Representation and investments Local Community & Readership Growing need to reduce costs, • What if Newspaper shuts down? increase local coverage & revenue •Central hub for public affairs & local information
  94. 94. Digital Revenue Solutions for Newspaper, TV, Radio & Hyper-Localand…. Updated 12/22/2010