State of Local

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.

According to paid.Content, Yahoo has added 17 new members to its newspaper consortium. Yahoo’s newspaper partners now include more than 400 dailies and 140 members. This appears to be the largest such consortium, but not the only one.  In fact, last month The Tribune and three of Yahoo’s members (Gannett, Hearst MediaNews Group and Cox Newspapers) talked openly about forming an online newspaper ad-sharing network while the Washington Post and the New York Times are also looking at combining with other papers. Yahoo’s consortium formed a year ago and forged a strategic partnership for online recruitment advertising through Yahoo’s HotJobs site and has since expanded to include common online advertising network distribution, online text ads, and content sharing between Yahoo! and consortium newspapers.  

Clearly these partnerships speak to the old adage of ‘keeping your friends close, but your enemies closer.’ Not so long ago the portals were seen a huge threat to the daily newspapers’ bottom line and now they’re partnering with Yahoo like crazy. Why? Perhaps it’s Yahoo’s ability to add cache and to help bring scale and attractiveness to advertisers? After all, if you can’t beat them you may as well join them.  Newspaper circulation numbers dropped 2.6% recently according the to Newspaper Association of America which has forced the industry’s hand. To combat the perception that papers provide less value to consumers, many in the industry are now combining online readers with their print-reading brethren to woo advertiser interest. The problem with this tactic is that advertisers have often deemed off-line readers less valuable. With all the consolidating and consortium-forming going on, the numbers may simply become too large for the advertisers to dismiss. 

Today Zillow announced a deal to syndicate their real-estate listings to a consortium of 11 print newspaper publishers, representing 282 newspapers including: Hearst, Media General, and E.W. Scripps.

Local advertisers who place their print and online listings with the newspapers will be able to choose to have their listings and open house ads also displayed on Zillow, one of the largest online real estate sites. the alliance is expected to roll out in the first half of 2008.

Many of the newspaper companies in the planned Zillow agreement are part of a newspaper consortium, which formed a year ago and forged a strategic partnership with Yahoo! for online recruitment advertising. It has since expanded to include common online advertising network distribution, online text ads, and content sharing between Yahoo! and consortium newspapers. This new initiative extends the alliance of these newspaper companies to the real estate sector.

This is a smart move by these newspapers are they move to scale: creating partnerships that give them enough users to matter to local advertisers.

See more coverage at : Screenwerk

Newspapers are continuing to build consortiums online, but the same thing is not happening as quickly with other broadcast media. Why? Because the Internet has hit newspaper bottom lines the hardest (Classifieds). Now, newspapers are moving into branding and SMB advertising with Metromix. This is bedrock of the alt weeklies and yellow pages on the low end (SMB) and TV on the high end (brand). We don’t think Metromix is necessarily the model that will scale (see ROI on CitySearch investment), but it’s interesting that TV and Radio are absent here (with DiggPhilly being a high profile and isolated exeption).