Lee’s Social Marketing Adds to Local Revenue Potential
Important Details: The Yahoo! Newspaper Consortium’s launches, connecting newspaper sales staffs with state-of-the-art behavioral targeting technology, have caught much attention. That’s deserved. Yet, another local sales initiative is proceeding afoot, and may similarly become one of the new building blocks for online business models.
Lee Enterprises is rapidly expanding its “interactive marketing builder” program across its chain. It opened its program in St. Louis and is up in other smaller Lee markets, including Davenport (Ia), Racine (Wi), Tucson (Az), Escondido (Ca) and Billings (Mt.). It plans to be live in the top 25 (of its 53) markets by Summer 2009.
In a nutsell, the program gives advertisers a new option: the ability to add community interaction to the ads and directory listings, engaging would-be customers, getting feedback, uploading videos and more. Think of it as giving retailers and service providers a way to play in the Facebook era.
Lee is using the Social Market 2.0 product, created by social network platform provider ThePort, based in Atlanta. Lee is an investor in ThePort, and the social tools provider developed the Social Market 2.0 product at Lee’s request for a socially enhanced local directory product. ThePort’s overall business is described and compared in the new Outsell report, Social Platforms for Publishers: Monetizing the Social Graph, March 19, 2009.
Lee launched the new product at its biggest property, the St. Louis Post-Dispatch and STLtoday.com, and is so far on track to generate $500,000 in new annual revenue, says Jeff Herr, director of interactive media for Lee. That revenue is based on a single product, St. Louis’ Best Bridal. The online product is augmented by two glossy magazines a year and four bridal shows.
As Lee takes the product to other markets, it is expanding out from bridal to health, home ownership, and dining and entertainment.
Lee sees a large opportunity here. That opportunity includes smaller businesses that couldn’t afford higher-priced newspaper advertising and many service-based businesses that have long looked to Yellow Pages directories as a way to reach customers. By offering small businesses enhanced directory listings (with several premium levels, depending on market size), social tools and search engine marketing services (with Lee acting as a reseller), local newspaper properties gain something significant. They gain revenue of course, but importantly they also gain a more central role in community commercial life going forward.
Even small markets like Racine (circulation, 28,000) are yielding $110,000 in new revenue, since a December launch, with an average value per sale of $675. Lee hopes to clear $4 million in new related revenue company-wide by the time its fiscal year ends Sept. 30.
Interestingly, Lee is planning on tying the social market product to its Yahoo! Newspaper Consortium targeting. It is just beginning to launch with Yahoo!, and use its APT behavioral targeting to improve ad/marketing performance for these and other customers.
Implications: Outsell believes the agile launch of social marketing products for retailers and service businesses is one to watch carefully. In our Facebooked era, small businesses know they should be playing, but don’t know how to. Bringing them those social function abilities, and tying them more broadly into marketing and advertising is a role somebody will play. Who better than a struggling local newspaper company, eager and hungry for growth?
Smaller markets are the freshest “green field” here, with Google/Yahoo! SEM penetration apparently lower. Even larger markets, though, offer significant opportunities.
The recent Yelp backlash — with merchants complaining how hard it is to get their voice into the community review conversation — is a perfect backdrop for news publishers offering businesses an alternative.
What’s key here is mobilization. Mobilizing state-of-the-art products plus brought-up-to-the-times sales forces. At Lee, both are works-in-progress, but it is showing the industry a new initiative worth studying.