How to Beat Patch

Digital Revenue Solutions for Newspaper, TV, Radio

& Hyper-Local

MelTaylorMedia.comUpdated 12/22/2010

and….

What Newspapers

Lostover past 15 years

• Help Wanted

• Real Estate

• Auto

• Coupons

• Inserts

• Grocery

• Movie Studios

• Dominance

• Share

• Poach Newspaper execs

• More advertiser choice

• Lower expenses

• Digital first

• Aggregation

Agenda

• Who, What, Why

• Potential plans

• How to beat them

• Other competitors

WebWhy Newspaper

& Local MediaStill Struggle

and how Patch can take local share…

Cannibalize Print ?

Web?I’m thinking retirement…

bee-yatch !

College Professors& assorted brainiacs

“searching for sustainable business models…yada, yada …crowd-sourcing …entrepreneurial journalism...community engagement…yada yada…grass roots via cloud…..yada…let’s do some more research….let’s tweet it…”

Hmmmmm…..

His lips are moving so he MUST be saying

something smart.

• 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

Um, yeah, Mel….thx for stopping by

Put The Data Down

Hit The StreetNOW

No….but they’ll get a bit naughtywhen they gotta hit their numbers

Local Bloggers Paywalls

ROAD KILL ?

Local blogs& indie-sites

getting nervous?

1. profit

2. operations

3. editorial

in this order !

Run Web like NewspaperThink like Publisher / Owner

What is ?

• AOL’ s Hyper-local play to grab local ad dollars

• Run by ex-Googler

• Editorial & tech first

• Sales ramping up

Tim Armstrong

John Brod

Warren Webster

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

Patch: Priority Plan

• Local news source

• Trusted community partner

• Newspaper replacement

• Create excellent journalism

Local Ad Dollars

Borrell

Local Online Advertising Share

Online Only

Pure Play47.2%

Newspaper

27.7%

Online Only

Pure Play51.7%

Newspaper

23.6%

2008 2009

600 Sites…so far(105 in California)

Philadelphia

Bucks CountyDelaware County

Lehigh County

Chester County

Main Line

Communities Avg size: 50-70k

Growing like a Weed

Revenue Streams

• Local • Regional • National

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?

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

Weakness (for now)

• Unfamiliar outsider

• Questionable local sales savvy

• Limited local relationships

• Clunky corporate structure

• Not as nimble as YOU

Patch Open HouseSuburban Atlanta

Patch Marketing Staff… Freshest Breath in Town

o Local Editor; $40k

o MacBook Pro, camera, smart phone

o $500 freelancer budget per month

o Ad Manager; $60k

o Managing group of sites

o Regional Publisher; $80k

o Regional Editor; $80k

o Oversee group of 12 Patch sites

Pay & Positions

401K matchPerformance bonusMedical & Dental

o Be local online ad expert for small business

o Host WEB 101 seminars for small business

o Attend chamber & trade functions

o Convince buyers to shift budgets to digital

o Visible presence in business community

Sales Job Posting

You’ll be working closely with local advertisers, as their local online advertising expert. You’ll know your own platform (and others) backwards and forwards so you can present complete advertising 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, get involved in community groups, head up charitable efforts and maintain a highly visible presence 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 promotional opportunities 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 coordinating local event sponsorships and attending them, possibly on weekends.

Wanted: Online Sales Executive

• Newspaper• TV• Cable• Yellow Pages• NAA• Bloggers

POACH

o 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 & jobs

o Directory up-sells

o Enhanced video

o Fee to post coupons

o Newsletter Ads

Current Ad Offers

No phone?

otherLOCAL

competitors

Yahoo Local

• Now in 30 US neighborhoods

• California, Michigan, New York, San Fran, Brooklyn

• Content from local pubs

• Community reporters

• Feeds from other pubs

EmployeesDec 2009: 124

Dec 2010: 3,100

75% of Deal Market

Users2008: 400 k

2009: 1.5 mil

2010: 40 mil

Average User Single

Female 18-34

Income: 70k+

o No risk… ‘only pay if people buy’

o Customers not clicks

o Performance

o 66 % open rate

o Gets 50% of sales revenue

Crazy Growth (said no to recent Google offer)

Many on this call are helping them

…..by running their adsGroupon is HARVESTING your readers

HARVESTING your readers

• Over 45 US markets

• Feet on street

• Search Engine Marketing

• Display / Banner

• Video

• Multiple digital solutions

• 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

Tags

Boost

o 60 million users

o About half of all Internet listening

o Avg 13 hrs of listening

o $50 mil revenue. Now profitable

o 45 of top 50 national advertisers

o Growing sales force

o San Fran, NYC, LA, Chicago, Detroit, Dallas, Atlanta

Pandora

Local Targeting of Ads

o Geo-targeting

o By format

o Audio, Video, Display

Pandora

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

o Quickie hyper-local sites for local TV

o No upfront costs

o Call center pitches local biz in your name

o Rev share approx 60% to DataSphere

o Primary relationship w/client. Retains data

OutsourcedLOCAL Sales

DataSphere = SmartWTSP TV = Dumb

• 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 ?

Take This Test

slaughter

Web Sacred Cows

• Need more page-views

• Editorial controls site

• Remnant, 3rd party ad networks

• 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)

Beware the BS

Newspaper USP unique selling proposition

What can Newspaper offer…

that PATCH can’t ?

Newspaper USP

• High % of local reach

• Feet on street

• Local content creation

• Client relationships

• Brand familiarity

• Print / Traditional distribution

How Newspaper Wins

Combine Newspaper USP

with

New Digital Tools

BROADCAST

or PRINT

Online Promotion

* Download coupon * Join contest * Watch video

Capture:

* Email* Twitter* Facebook fan

Build Database

* Friend list* Twitter * Subscribers

Targeted

* Tweets* Facebook* Messages

Integrated Campaign

Mandatory Steps for Success

Treat Web As Business

Run it just like your Newspaper

Remove Internal

Sabotage

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

Digital Sales Training Who does most training?

It’s a FACT.More training = more revenue

REDUCEcommodity page-views

GROWhigh ‘advertiser value’

Bigger Not Always Better

simplify

why do we talk like this?

confusing for client& sales rep !

• cpm

• pageviews

• uniques

• click-thrus

• weird vocabulary

• monthly pricing

Endorsed by Internet Expert: Shemp Howard

NEWS LOGO

NEWS LOGO

REDUCE Clutter !

NEWS LOGO

NEWS LOGO

DUMB National Ad Networks( at local level )

REMOVEfrom home-page & section fronts

Consider day-parting

> No Super-Premium Ads

> The only local ad is pushed outside of content area

> Low CPM ad networks sucking up home page of this otherwise strong news-site.

How GREAT sites lose money

Can’t sell premium unit

on home page?

Smart Practiceweekly instead of monthly rates

$ 400. per month sounds

expensive

soundsreasonable $ 95. per week

‘Your cpm is too high’

Avoid This Nonsense….instead….sell flat fee to local/directs

Interactive Media Queen

how local biz decides to buy web

• loves your newspaper

• design & tech

• editorial

• twitter & facebook

• audio & video

Ad Mixdo they see

local competitors?

Super Premium

Ad Units

Breaking News

Sponsored Promotions

Market to Advertisers

• Rte 9 is closed

• Lady Gaga tix on sale Friday

• Phillies beat Astros 3-1

• Deal of Day

• Coupon download

• Win Trip

• Ticket Raid location

• Stand by rate now avail

• Home page unit now avail

• Spring special 50% off

multiple uses

LEADS

New Business Development

Cold Calling

Phone Blitz

STINKEROO

#1 Current Print Clients

Meet Dick. 25 years in the Newspaper biz. Always hits his print budget without fail.

Dick always wins sales contests, like this one to a tropical island. But because Dick is a print-sales superstar, he gets a pass when it comes to web.

Dick NEVER pitches web. Yet 90% of Dick’s clients 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 buy Web from Dick……if only he offered it.

Hi.I’m Dick.

#2 Call Center to Set Appts

Keep Sellers On The Street.

Use classified phone room down-time to set up appointments…or consider off-shoring this activity to countries that would LOVE this job.

Your sales reps should be in front of clients and potential clients, as much as possible.

Expensive reps & sales managers sitting behind a desk making a few half-hearted cold calls, is a poor use of limited resources.

#3 Web 101 for Local Business Seminars

• confused / lack of knowledge

• doesn’t totally trust sales rep

• think Google or website is enough

• never been offered web

Local biz wants to buy web…

Web 101 for Local BusinessWhy ?

• 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

Web 101 for Local BusinessBenefits

Compensation

Bonus, Penalty, MBO’s

Web 101

for Local Business

All Staff Training

Management & Owners

Sell

Non-Print Products

Job Description RefreshSimple Packages…

No CPM’s

Reporting StructureOnline Media Kit,

Direct Contact to Rep

Plan to Reach

Non-AdvertisersNo Ad Networks

Test Yourself…Higher score, better chance to beat Patch

WatchDeseret News, Salt Lake City

Newspaper..Broadcast..Web

Clark GilbertDigital Rock Star

WatchGawker Media

Nick DentonDigital Rock Star

Remember all that video stuff you bought for the newsroom?

Take back half of it, and give it to the sales department.

online videothat pays

Reduce Costsvia

> Open Source> Crowd Source> Revenue Share

• Vendor Deals

• Aggregation & RSS

• Local Indie-Journos

• CMS Platforms

• Local Ad Networks

• Sales-Based Video

• Management

Re-think EVERYTHING

When content creators understand online business models…

they create more advertiser-friendly & profitable websites

Online Business 101for Editorial, Programming & Web Producers

The New Workshop from Mel Taylor Media

• Owner• CEO / COO• Investor

Local Sales Management

VP Digital

Local Sales Reps

Local Content Management

• Build & manage digital platforms• Drive online traffic• Content & tech development

• Sell traditional inventory• Sell web inventory (secondary goal)• Manage sellers

• Sell traditional inventory• Sell web inventory (secondary goal)

• Increase shareholder value • Manage overall operations• Drive top line growth• Increase profit margin

Primary Responsibilities

Primary Background

• Little or no direct sales & revenue experience• Compensation primarily based on traffic• Employs content first, not profit first strategy

• Prefer to sell traditional • Limited or no web sales training• No web business model experience• Compensation favors traditional sales

• Prefer selling traditional• Limited experience selling web • Limited or no web sales training• Compensation favors traditional

• Delegate strategy to content first executive• Thinks only brand extension strategy• Over reliance on internal, traditional managers• Tough keeping track of online competitors

Potential Weakness / Limitations

• Traditional media creation• Web media creation• Increase audience numbers

• Prefers traditional content development• Thinks only brand extension strategy• Limited or no web development training• No web business model experience

Local MediaPosition

Building Profitable Business

Content & Tech

Traditional Sales

Traditional Media

Traditional Sales

Why Traditional Media Struggles w/ Online Revenue Growth

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 strategy

TOP 10 Revenue Mistakes of Local Online Media

Read full report here:

http://meltaylormedia.com/2010/08/top-10-web-revenue-mistakes-of-tv-radio/

Local ConsumerAdvertiser

Reach Local

YP360,Local.com

Groupon

Patch,Hyper-local

Google Places,SEM, Facebook

Niche Sites

Hulu, Pandora

TV

Newspaper

Radio

Direct Mail

Directories

Wants to reach local consumer

Traditional Channels

for reaching local consumer

New Channels

for reaching local consumer

Direct Relationshipbetween advertiser & consumers, avoiding middle-man channels

EX: Twitter, Database, Blogs, Social, Mobile

Middle-Man Channels

Advertisers benefit from new, multiple ways

of reaching local consumer

Local Media Eco-SystemBusiness Models that Support Local Journalism

• Pro-active plan that exploits economic pressures • Enables local commerce, that subsidizes local news• Proven revenue management systems (RMS)• Move quicker from investor support, to self-support• Leverage efficiencies of outsourcing and open-source• Multiple online & offline revenue streams• Scalable via networks, franchising & co-ops

Destination SiteAggregation, Curation, Editorial

Mobile, RSS, Email, Social

Commission, fees & rev-shareDisplay, search, lead capture

Events & promotionsSponsor supported and/or fees

Ad supported

Stringers, Syndication & Licensing

CMS & RMS Platforms

Local Ad Network

Traditional & Digital Marketing Services

Licensing fee, Rev share

Rev share, Agy com

Fees

Fees

Local Ad Network

Traditional & Digital Marketing Services

Agy com

Fees

Events & Training WorkshopsFees, sponsorshipslead aggregation

Self-serve, Outbound tele-sales

Creative• Marketing Agencies• Video, Indie-Producers• Designers & Developers

Outsource / FeesMarketing

• Promotions• Event, Contesting• Social

Outsource / Fees

RMS & CMS Platforms

Local Ad Network

Stringer & Syndication & Licensing

Sales, Marketing, Training, Tech & Business Support

Licensing fee and/or revenue share

Per Diem & fees

Revenue shareAgency commission

Co-op Efficiencies

Co-op ResourcesFor Independent Bloggers & Sites• Sales support, network & services• Content network & syndication• Tech & back-office support• Pre-vetted platforms & apps• Representation and investmentsTraditional & Public Media

Growing need to reduce costs, increase local coverage & revenue

Local Community & Readership• What if Newspaper shuts down?

•Central hub for public affairs & local information

Content• Laid off journalists & photographers

• Traditional media news• Indie-sites & pro-am bloggers• Watch Dog Journos• info & pubic domain data feeds• Community & citizen participation

Advertisers• National, Regional, Local

• Moving dollars online

News, Community, Services & Supportfor Local, Media Markets

Rev share

Hyper-Local Incubator

Digital Revenue Solutions for Newspaper, TV, Radio

& Hyper-Local

MelTaylorMedia.comUpdated 12/22/2010

and….