Ad Technologies Aim at a Two-Fer: Reduced Costs and New Sales
Important Details: Tribune Company announced a new partnership with technology provider Mediaspectrum, aiming at quickly spreading self-service display advertising technology among US daily newspapers. Tribune has been testing the self-service set of tools at six of its eight newspaper properties, with the final two due to join in soon. “We’re trying to bring the industry onto a single, self-service platform,” Mike Sacks, Tribune’s Vice President of Operations, told Outsell.
The result at Tribune so far: more than 500 new advertisers, mainly smaller businesses, Sacks reports. Many of those advertisers have long found newspaper advertising too expensive; likewise, news sales managers have often said that it cost too much in sales time to make those sales calls. Print/web packages are priced as low as $50, as can be seen a set of “good-better-best” offerings on the Tribune’s BaltimoreSun.com.
Sacks says that the new advertisers stretch across several categories, from restaurants to plumbers to home improvement. He won’t provide revenue numbers, but says that the iniative is one of Tribune’s top ones for the year ahead. He cites a recent McKinsey survey showing that media companies could boost local ad revenues 20% if they could do as well with small and medium-sized community busineses as they do with their bread-and-butter, larger businesses. Outsell believes that most metro papers are getting advertising business from no more than 25% of the businesses in their region — that’s a huge opportunity.
With traditional revenue challenged by so many forces, Sacks says, the conundrum has been, “how you get more of your local businesses that we haven’t gotten to before”.
For Tribune, it’s not just a matter of gaining some of that new business; it’s about re-orienting its substantial local salesforces.
“We’re not firing salespeople; we’re redeploying them to [sell] larger businesses.” The system may allow the company to re-allocate as many as a fifth of its 500-person sales staff. The idea: focus human talent and time on larger revenue targets, while using lower-cost self-service tools to claim new, but smaller, pots of money.
Tribune first began using the Mediaspectrum technology as a cost-reduction tool. The company aims to help companies save on ad pre-press operations, from ad entry through ad design. Customers report 25-40% savings in these operations, a big help as they’ve been forced to make fundamental and permanent cuts to their cost structures.
“The first thing that hits you in a newspaper company is how antiquated it is,” says Tony Pusey, the chief information officer of London-based Trinity Mirror, another Mediaspectrum customer, told Outsell. Pusey came from a retail IT background and has been applying the Mediaspectrum solutions as well. Pusey is also using the Mediaspectrum ContentWatch product to streamline editorial work.
Mediaspectrum’s ad technologies now focus on display ads. Both the company and Mediaspectrum say that rich media products, and perhaps paid search, may be on the product roadmap ahead.
Implications: Ad technology has received few headlines this year, as the industry’s overall financial woes and its efforts to gain more online revenue from readers have dominated public concerns. Still, advertising contributes 66% of newspaper company revenues worldwide, as recently documented in our report, News Publishers & Providers: 2008 Final Market Size and Share Report, July 27, 2009.
So taking ad sales to the next stage in every possible way is job one for news publishers.
Outsell has pointed to the significant growth contributions of the Yahoo Newspaper Consortium, focused on bringing behavioral targeting and Yahoo inventory opportunities to locally sold local advertisers. We recently wrote about Advance Internet’s partnership with Microsoft, based on similar principles (Insights, Advance Internet’s Microsoft Deal Shows Local Ad Sales Free-for-All, Aug. 18, 2009).
Giving feet on street more to sell, and better things to sell, is one big tool. Another is learning the power of self-service technology, mechanics that have propelled Google’s great growth and Yahoo’s as well. As is all things with a sales/technology nexus, the success of the initiatives at Tribune — and elsewhere — will be in the execution.
Outsell believes that applying technology, both in reducing as much legacy cost as quickly as possible (while preserving customer service) and in gaining new customers, is one of the news companies’ most essential initiatives as they prepare for a more positive 2010.