State of Local

BET Networks said today that the BET Digital Media Group will be launching a vertical advertising network in an effort to give advertisers more exposure to African-American Internet users.

The new advertising will allow advertisers to target African-American consumers across relevant and professional Web sites. BET’s vertical advertising network will offer Web site publishers revenue opportunities by connecting publishers to advertisers trying to reach urban and African-American consumers.

According to Jupiter Research, African Americans are likelier to respond positively to online advertising, and are the second largest online minority after Hispanics with 22.7 million users.

The trend of building vertical ad networks is continuing nationally at a brisk pace. I predict that the trend will rapidly move to local news ad markets, as local broadcast TV and newspapers sites build their own ad networks built around a select number of high-quality local web sites.

This past week, J.P. Morgan released a very detailed, and bullish, analysis of the 2008 Internet sector titled “Nothing But Net.”

Key assumptions underlying the survey:

1. US economic growth to remain fairly steady. At this point, this is becoming a contrarian view.
2. Advertiser demand for “premium” inventory will increase. Though overall CPMs may increase, industry trends we’ve seen show “premium” CPMs coming under pressure due to increased alternatives from better targeting technology (geo / behavioral) and newer publishers.

Summary:

• Total online ad market growth rate: 21% in 2008, down from 26% in 2007.
• 20% growth in “graphical” ad spend due to more UVs, higher PVs/UV, more ads per page, higher CPMs and higher sell-through.
• CPM growth rate will accelerate by 4% due to scarcity and better targeting capabilities
• Internet will continue to cannibalize Newspaper ad spend, which declined ~8% in F’07
• Large companies will continue to seek out investments in social media (e.g. MSNBC/Newsvine)
• Top 20 ad networks will earn approximately $2B+ in revenue in 2007 (~14% of the display ad market). Ad network revenue to grow 25% CAGR through 2010 (outpacing overall market).
• Acquisition and consolidation to get scale in ad network space. Motivations are: Traffic (scale), Technology (tools), Transactional (buying profitable firms)
• Mobile ads will be like video ads: A whole lot of talk, not a whole lot of $.

Alan Mutter’s blog “Reflections of a Newsosaur” should be a must-read for anyone interested in the media. He recently posted some figures about the shocking collapse of valuation among publicly-traded newspaper publishers.

I suspect most of us realize it’s been a challenging time for the newpaper industry. But these numbers are honestly scary to anyone who regularly reads a newspaper.

The market value of the American newspaper publishers entering 2008 as independent, publicly traded companies has fallen by $23 billion, or 42%, since the end 2004, the year before the wheels started coming off the industry. Nearly half the slide in the market capitalization of newspaper stocks came in 2007, when the shares lost a collective $11 billion, or 26%, of their value. Thus, newspapers lost nearly as much value last year as they did in the two prior years put together. Read More… »

ClickZ.com’s Kate Kaye provides a useful 2007 summary of the hot issues surrounding Web metrics.  Kaye nails it when she says that mere “baby steps” were taken by analytics firms to catch up with the rapidly progressing widget- and AJAX-infused Web.  When you boil it down, there were three highlights in 2007.  And, as I see it, three key issues exist in 2008. 

First, the highlights. 

In March, comScore announced its new visits metric.  The firm claimed that metrics like page views were “diminishing in significance” due to new technologies, which is hardly accurate.  When sites spend money upgrading their dynamic content serving capabilities, they need to understand how consumers are clicking around.  KPIs are getting more complicated, but none is truly diminishing.  (Well, cookie visitor counts might be doomed.)

In April, things got nasty when IAB CEO Randall Rothenberg slammed comScore and Nielsen Online (then Nielsen//NetRatings) for using an outdated panel sample methodology producing counts two to three times lower than IAB client server logs.  Rothenberg called for “a solid and transparent foundation for audience measurement,” and urged comScore and Nielsen to undergo independent audits by the Media Ratings Council.

Highlight #3 was in July, when Nielsen came out with its “total minutes” metric, heralded (by Nielsen) as the “best measure of online engagement.”  But, as anyone who’s ever done site redesign research will tell you, lingering visitors are often confused, angry visitors.  When its first rankings had AOL (with its omni-present IM window) dominating the uber-efficient Google, I wasn’t left feeling like Nielsen had mastered the evaluation of engagement. Read More… »

TV news stations love their brands. They splash their logos, slogans and anchor mugs on air, on billboards and the sides of big-city buses.

Stations also brand themselves online with the same smiling anchors and punchy mottos. The strategy generally enjoys limited success, with many stations still struggling to gain a sizable share of local online traffic.

One veteran executive of the digital news world has some advice for those stations: Help your brand pack its bags, drive it to the station and give it an emotional kiss goodbye. Then go home and get to work doing something useful online.

Nancy Bruner’s been doing new media for more than a decade. She just made the switch from heading digital content for the The Seattle Times Co. to leading online development for Fisher Communications. Fisher, based in Seattle, is a publicly traded firm that owns 19 TV stations and nine radio stations, plus a satellite and fiber distribution system and a data center.

Fisher brought Bruner on board shortly after buying Pegasus News, a Dallas-based site that’s trying to forge a next-generation mold for local digital media. Pegasus has a bit of everything – staff writing, aggregating, events listings and a “Daily You” algorithm that learns users’ preferences. Fisher plans to hone the model in Dallas and then adapt it to other markets. Read More… »

Here’s a pretty neat “local” website (in Beta) that I can see providing a great service for local consumers some day. While I have to admit that I like the concept of the site, I mostly like the catchiness of the site’s name: WhatsOpen.com (punctuation error notwithstanding).

In fact, just yesterday I was asking myself this very question.  I had to help my inlaws out by buying them a new computer at 4:30 in the afternoon–on New Year’s Day–and with three major electronics retailers close by, I wanted/needed to know what’s open? In my case all three are geographically close, so it wasn’t too big a deal, but had they been in three different directions maybe a quick mobile search on What’sOpen.com, could have helped determine which direction to point the car!  (By the way, for those of you following along, I used ancient technology i.e., the telephone to call the stores, for my answer).  Read More… »