This is an idea I pitched the NAA on presenting almost 2 years ago. I found it as I was cleaning out a drawer so I scanned it to get some feedback. The pitch has some flaws in it but the idea is beginning to take form especially with Webvisible, ReachLocal and OrangeSoda making major inroads to the local market.

How are these partnerships working out?

Digital Media/ Connections Track

Session: New Revenue Streams- Non traditional ideas on increasing revenue.

Developing a Hyper-Local Marketing Agency

Objective: To introduce developing an agency approach with the highest potential businesses in each market; developing a consultative relationship for achieving the long-term incremental revenue gains newspapers seek.

The current sales landscape

Just about everybody searches online. That’s what every study in the past 18 months has concluded. Whether users are searching Google, Yahoo, Ask, MSN or a local media site, they get the same basic results: national advertisers with a sprinkling of top local businesses. These local businesses can gain a lot from these “pre-qualified” leads when they tap into them properly to grow their business.

Newspapers are still the strongest business partner in every local marketplace. Yet newspapers have been slow to find the most effective way for their local businesses to grow their businesses using the web and search engines. Moreover, newspapers tend to pitch their products first. In print, the “pitch your product first” plan works, but on the web that plan doesn’t ensure success. Instead it leads to multiple product presentations with nothing tying them together and the advertiser not having enough information to set expectations.

Minimal revenue growth, the ultra-competitive landscape of national and regional players vying for local business attention, plus new technologies all demands a different strategy.

A new approach

To create incremental revenue over the next 10 years newspapers should consider a new approach: branching out into the “agency business” and targeting/helping local businesses in their market be better online. In this consultative agency role, businesses are viewed as businesses with opportunities to fulfill, not as advertisers.

A newspaper would develop an “independent agency” business, separate from the newspaper, to manage its online advertising. Success for the agency would be focused on growing the newspaper’s influence in the local online marketplace, not revenue per se. This newly formed agency would gather key information and metrics from their markets to help local businesses make crucial decisions about their online role to benefit their ROIs.

What kind of decisions would the agency help with? It would help the local plumber, pizza place, or doctor understand how to purchase keywords; how to determine if a banner ad is better than a text ad for exposure; how to track and modify campaigns for better results, etc. All this will lead to increased revenue and low churn.

Presentation highlights:

· Why “in with the new” doesn’t always mean out with the old

· The benefit of establishing a separate business versus just a separate department

· Four key agency departments: Business Development, Research, Design, Fulfillment

· How to position the new “agency” in your market

· Targeting agency customers

· Revenue potential (ROI) of a separate business/agency model

Why care?

The current processes lead to diminishing (or disappointing) returns. Consider this:

• The current sales process in most newspaper markets is only yielding a small, standard yearly growth rate in advertising revenue (1-3%).
• Current advertisers are pitched the product of the month or the new online bundle with little thought to an advertiser’s ROI and their needs
• Current processes at newspapers and their staffing allow only for maintenance of an existing customers.
• Eighty percent of the local businesses do not have a relationship with the newspaper.