Losing Local

If this remarkable statistic has been publicized, I somehow missed it, but there's a doozy in the Wall Street Journal today (subscription required; see Question 7 in the quiz):

Last year, for the first time, local advertisers spent more on sites like Google.com or Monster.com than on local newspapers' sites. Internet companies got 44% of the $8.5 billion local advertisers spent online, newspaper companies got 33%, Yellow Pages sites got 10% and local-television sites got 9.3%, according to media research firm Borrell Associates.

Uh-oh. Obviously, the print local advertising business, while declining, still is much larger than that of any upstart competitor--for now. But newspapers are losing ground in the transition to online advertising among the local businesses that traditionally have been their bread and butter--the customers they must own, at all costs. It's not like the online companies have feet on the street going after those local advertisers--most of that business just comes in over the digital transom to Google, Monster, etc.

Lesson: Newspapers need better local online products to offer advertisers (and how), and need to be much smarter and more aggressive about how they sell them, i.e., not doing stupid bundling deals or sending print sales reps out to sell online or failing to understand that there are a lot of small local advertisers now searching for opportunities to spend money online and finding their local newspapers' offerings wanting.

The online ad business, especially locally, is really nothing like the print business, and newspapers need to grasp that, quickly, and adapt to survive. Self-service ads, telemarketing, contextual offerings--all of these are techniques that newspapers' online divisions need to move toward quickly to have a chance to win the local advertising arms race.

Failure to do so? Fatal. Absolutely fatal.

Comments

[Karl]

Recently Leonard Witt hosted a video of Clay Shirky talking about how every URL is a potential community.

http://pjnet.org/post/1683/

This is doubly so for any newspaper website that features related articles on topics that can be brought together.

At the norgs unconference one of the items we agreed upon was that:

"Collections of stories, and our interactions with them, define communities."

(http://norgs.pbwiki.com/The+Norgs+Unconference+Statement+Of+Principles)

To each story a URL. To each collection of stories a URL.

Each URL is an opportunity to bring context to a story, and along with it opportunities to engage advertisers.

Newspapers are starting to come around to this and are opening their archives to the public, but I have seen none take the next few steps that enable their communities to engage them in the mix-and-mash way that is the web.

Karl

[Zac Echola]

Part of the problem is newspapers teaming up with national companies like Cars.com, Yahoo, Google and Monster instead of building their own local vertical classifieds products.

Whenever I tell papers they need to own every local keyword they can, that includes classifieds.

As it stands now, these people are fleeing to national sites, which, mind you, have a horrible conversion rate (especially in the Jobs category).

[Rick Waghorn]

Mark,

Spot on. We are far from there yet, but we're just about to put a second 'foot soldier' into our two neighbouring counties to start sourcing exactly the local advertising that you talk about... these people want to take their local brand to an online local marketplace; they just don't know how to do it. Build yourself your own banner ad management system - www.twadservices.co.uk - give Joe's Pets his own client log in to see his own numbers and hold his hand and take him across the river...
And then build your own 'self-service' text ads service - we've christened ours 'addiply' as in ads that add then multiply - that, in effect, become the postcard ads people place in the local hardware store... and, hopefully, away you go. Enjoyed your talk at Jarvis' do in the autumn... 'We were on the right track, we just run out of track...' is something that runs around in my head time and time again... that's the challenge for all of us.
Rick