State of Local

The Financial Times has a great profile of French entrepreneur Loic Le Meur in today’s edition (free registration required to read it).

Le Meur has a lot of experience with successful startups, and his current project is Seesmic, a site which he is promoting via a series of daily, often odd YouTube clips.

In the FT piece, he offers up 10 rules for anyone wanting to be successful in business, and I include them here because I think many of them apply to local online news and advertising.

1. Don’t wait for a revolutionary idea. It will never happen. Just focus on a simple, exciting, empty space and execute as fast as possible.
2. Share your idea. The more you share, the more you get advice and the more you learn. Meet and talk to your competitors.
3. Build a community. Use blogging and social software to make sure people hear about you.
4. Listen to your community. Answer questions and build your product with their feedback.
5. Gather a great team. Select those with very different skills from you. Look for people who are better than you.
6. Be the first to recognize a problem. Everyone makes mistakes. Address the issue in public, learn about and correct it.
7. Don’t spend time on market research. Launch test versions as early as possible. Keep improving the product in the open.
8. Don’t obsess over spreadsheet business plans. They are not going to turn out as you predict, in any case.
9. Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product.
10. Don’t focus on getting rich. Focus on your users. Money is a consequence of success, not a goal.

Before I wade into this, let me throw out a couple of caveats.

Yes, I do work for Internet Broadcasting, but I’m not in sales. I don’t have any direct contact with client sales departments, and in fact, most of my experience here (and at my previous jobs), is on the journalism side.

But I do have experience working at news startups, and also run a small news site of my own in what passes for my free time. I know first hand what it’s like to be a scrappy web dog, wrangling for traffic and ad numbers and attention.

So take what I say not as some IB pontification, but as a guy who knows what it’s like to have few resources, little time and lots of financial pressures.

Everyone wants some magic bullet for online ad revenue. You’ll hear a lot of talk about how to sell your inventory, ways to package it and aggregate your traffic for national advertisers. All of these are legitimate and worthwhile discussions.

But if I’ve learned anything, it’s that at the end of the day, what’s actually on your site will drive your ad sales. Great content opens up sales opportunities and insures that you’ll not only make that initial sale, but end up with a happy advertiser who will return for another round. Read More… »

Last year, I was invited to participate in a panel discussion at the TVB conference that centered on multi-platform sales for TV station Web sites. I had lots of prepared remarks that were unremarkable. But one thing I said off the cuff ended up in the New York Times: “If you don’t have any capabilities, go get some.”

The idea was simple. Stations can no longer take the “If you built it, they will come” approach when thinking about Web sales. A web site, regardless of how good or highly visited, is not enough. The time has come for another round of investment.

“Invest in what?” you might ask.

Good question.

My short answer is anything you think will work for your market. Category or “vertical” strategies seem to be making the most sense and the most money. Web products in automotive, home improvement and healthcare are all nearly a must nowadays. There are all kinds of classified products out there that are good. I like the ones that incorporate user generated content and also provide an e-commerce component.

We work with more than 70 stations around the country and I don’t know one that hasn’t already invested in or is about to invest in some new sales products that they can take to their local advertisers. The time is now because the local guys are getting smarter and expecting more from their Web advertising.

Here’s my thinking generally about what the revenue breakdown should be for your site. Fifty percent of your revenue should come from traditional Web sales (impression-based campaigns and sponsorships) and the other 50 percent should come from program and vertical sales. So, without investment in these kinds of Web opportunities, you’re probably selling half of what you could be.

Greg Sterling wrote today about the sudden awakening of newspapers in response to years of eroding subscribership and the loss of classified and regular advertising dollars. As a result, the newspapers have been aggressive in their pursuit of joining consortiums (e.g., Yahoo) and aligning strategically (e.g., Blogrunner, Zillow) which are both good tactical first steps. But why are the newspapers stopping there?  Why aren’t they pursuing cross-platform partnerships with equal zeal? Shouldn’t they also be thinking about partnering with the local TV stations, the local radio outlets and more? Singularly, probably none of these has enough clout to outright “own” a market, but combined, couldn’t they build the kind of engaged local audience that advertisers simply couldn’t dismiss?  From a small business perspective, just having a shared business profile might save me countless hours and I can continue to work with a trusted outlet. And better still, my ads are going to reach many, many more eyeballs than I am accustomed to. Sign me up!

I think that the traditional media has for so long competed head-to-head against one another, that the notion of now working together must still be too frightening. Granted, it’d be a lot of work to coordinate such an endeavor, but cooperating and aggregating content sure seems to me to be a better way to remain viable in the consumer’s and avertiser’s eyes. It’s got to be tiring to have to fight for content ownership all the time, especially when the end result is you’ll only own a small piece of it.

CBS Outdoor has got a pretty cool new hyper-local, multi-platform test going on in New York that bears watching. CBS created a free 20-block WiFi area in Manhattan using billboards and bus stops to support the zone. Anyone accessing the WiFi on laptop or cellphone gets an ad-supported home page with local and national news, sports, weather, etc., and allows users to perform uber-local searches for area businesses, entertainment options and more. From an advertising perspective, only people within this somewhat limited geographic radius are going to see your ads, so the potential for conversion–or action–on behalf of the consumer should be at a premium. Health and weather permitting, all of these consumers are practically within walking distance. A deli could post a “half off on a Reuben” ad at 11:00AM and by 1:00PM be able to see the ROI on it’s investment. Can’t get much more immediate feedback than that.

The Local Onliner  had an interesting post about Freedom Interactive’s efforts to chase the local advertising longtail.

Smart move by Freedom Interactive to go after medium-sized businesses. For those local advertisers out there who can’t afford offline rates, online buys are a solid way to get associated with trusted local media brands. From the publisher’s standpoint, it’s not just incremental revenue but a way to get new clients in the door.

It will be interesting to see how margins hold up as the sales force travels down the local advertiser longtail.

Regarding “tangible results,” one has to imagine that, once advertisers and agencies get past their obsession over click-through rates, online conversion measurements will be deemed far superior than trying to track down whether a print coupon was used at the local furniture store.