Of course, the process of diversification and of introducing new products to staff and clients doesn’t happen overnight. At the Kenosha (Wis.) News, managing director of digital media and director of client media Nicole McQuestion said, “We spent a year developing staff that does a needs analysis of a client’s business. We taught them how to look at the client’s whole business and future needs, rather than just how to sell an ad. We have an 11-person staff with three who specialize in digital media.”
The result of this year of development and training was KN Digital Media, which provides local business clients with custom social media channel creation and management, foundational content and strategy plans, internal and external search engine optimization recommendations, email marketing, blogging, website development, and reputation management.
“We’ve found digital sales take longer, and the knowledge the salesperson needs is more extensive. Our first thought was to have a separate digital staff, but we decided not to because we didn’t want to leave people behind. They may take longer to acclimate and, in fact, they might never acclimate, but we still need these people,” McQuestion said.
Since the Kenosha News began the digital media component of its business, McQuestion said, “We have 34 clients and are still growing. My projection is for double that amount by the end of the year. Our average digital customer pays between $400 and $2,000 a month. We got out of the red in the first six months and are bringing in between 20 thousand and 25 thousand dollars a month in revenue. That percentage is constantly growing.”
On a larger scale, Gannett Digital Marketing Services offers similar solutions to the local markets served by the 81 newspapers and 23 TV stations owned by the media giant. Vikram Sharma, president and chief executive officer of Gannett Digital, said, “A few years ago we came to the conclusion that we want to be branded as a local company that helps local advertisers. Toward that end we refreshed our product line — careerbuilder.com, apartments.com, and cars.com, among them.”
Although the company services more than 100 markets nationwide, Sharma said the focus is still very much aligned with local values and small- to medium-sized businesses.
“We are,” he said, “a local business that’s chosen to diversify our product set by acquisition and using that to help existing clients. This is a fully owned, integrated business. We took our disparate digital businesses and pulled them together to build a digital solution that is a one-stop shop of digital marketing. The scope of what we’re doing is certainly aligned with helping our markets and existing customers.”
According to Sharma, that strategy has paid off, as a quarter of the company’s business now comes from digital. “I think our business is extraordinarily strong. The demand is very, very high,” he said. “It solves what has been a big problem for merchants. Many have been approached by new companies that have the technology but not the knowledge of their business and the market. The fact we are already a trusted partner is very comforting to the advertisers.”
When in doubt, do it all
In 2008, The Dallas Morning News began to experience what publisher and chief executive officer Jim Moroney called “a significant decline in print ad revenue for the second consecutive year.”
The paper approached the problem by diversifying from several angles. It “aggressively” sought more commercial printing and distribution, and now prints The New York Times, The Wall Street Journal, and Investor’s Business Daily, along with USA Today, formerly its sole commercial printing client.
The Morning News also created CrowdSource, an event marketing division, as an addition to its portfolio. The purpose was to generate incremental revenue while engaging consumers with the brand. Last year, for example, CrowdSource created an event called Walk In The Park to bring residents out to a new downtown park in which the paper sponsors a reading and games room. Currently, CrowdSource is working with other organizations on a 50th anniversary commemoration of the JFK assassination in Dallas.
Another new part of the company is 508 Digital. This business — named for the address of the newspaper’s building — operates like an agency, offering digital, social media, and search engine optimization services for small- and medium-sized businesses. Speakeasy is another marketing and promotions division that provides social media strategy and execution for local businesses that offers “content marketing delivered via smart social media.”
Finally, the Dallas Morning News started two magazines, Texas Wedding Guide and Design Guide, as yet another way to expand the brand and increase revenue.
Based on results thus far, Moroney said, “We will continue to pursue a strategy that builds new sources of revenue off the foundation of our brand, our core competencies, and our infrastructure.”
If all this sounds a bit much for one company to offer in one city, the local clients in Dallas apparently don’t agree.
“The business is doing great. We’ve been able to attain at or above business plan. We’re happy with the level of service we’re supplying to our clients,” 508 Digital general manager Brian Ritenour said. “We have 52 employees. Thirty are sales reps and four are sales managers. We bring in new clients who don’t advertise with the Dallas Morning News. We integrated our products with our core sales team who can sell the product. Our philosophy is to treat each client like your best friend or family member.”
Forging local partnerships
The scope of the Morning News’ efforts is so broad that the A.H. Belo-owned paper is also partnering with Hearst-owned media services company LocalEdge. It is the first non-Hearst paper to do so. Ritenour said, “We’ve been working with (LocalEdge) since early first-quarter of 2012. With them we are able to offer a complete suite of solutions that is unique in the marketplace, because we offer everything — SEO, SEM (search engine marketing), etc. We offer it all at do-it-yourself prices, but you don’t have to do it yourself.”
Jeff Folckemer is president and chief executive officer of LocalEdge and senior vice-president of Hearst’s newspaper division. He said, “Hearst acquired our company in 2004. LocalEdge evolved as a company. We began by printing yellow pages, but that part has been fading fast.”
With print yellow pages succumbing to many of the same difficulties as print newspapers, LocalEdge’s transition to a digital services provider was a logical step.
“We handle digital marketing services. Newspapers generally have a fixed amount of advertising, and they’ve never been able to break out of that mold,” Folckemer said. “We help set up custom and prepackaged sales. We train their staffs in how to sell websites, mobile sites, Google, Yahoo, Facebook, SMS texting, SEO, SEM — all of it. And we train them in how to train staff. We generally train them for two weeks so their trainers and managers can take over.”
This intensive focus on training is not just for the sake of getting the paper caught up with current technology, but also to propel it into the future without getting left behind by the next wave of change.
“We are taking the newspaper into the next few years of technology. We give our clients one dashboard on which they can see everything about the program they’ve purchased, and they can tie everything back to the newspaper,” he said.
“We don’t make money until they make money. We go in as a partner with the newspaper and enable them to use the feet on the street they already have to build their market and the brand they already have,” Folckemer said.
Know thy clients
At the Minneapolis Star Tribune, Jeff Griffing, chief revenue officer of Star Tribune Media Co., said, “I came to Minneapolis three years ago. I was formerly the publisher of Sports Illustrated in New York. Here, I found myself walking out of meetings with prospective clients, because we had nothing to offer in the budget of a small business, and we couldn’t get a product to achieve the results the client wanted. In April 2012 I set out to find a solution. I believe it’s the Star Tribune’s responsibility to help Minnesota grow by helping its small businesses.”
After much thought and research, Griffing said, “We made the decision to start Star Tribune Radius. We launched that new division and a new team in October 2012. We’ve got 15 salespeople and five customer support people. They are completely separate from the traditional newspaper sales staff.”
The separation of the digital staff represents the level of specialization the Radius team is able to offer local clients.
“All 15 salespeople are digital experts who are Google certified, because they understand SEM and SEO. They’re also all trained in our product line,” Griffing said. “In the first six months we’ve had tremendous success in bringing advertising programs to small businesses in which they can measure results. We give them a dashboard on which they track phone calls, site visits, and inquiry leads.”
When it comes to determining which digital services to offer, Griffing said market research is key. Fortunately, local newspapers are in a unique position to take advantage of the dynamics their particular communities offer. “The one thing I’ve learned for certain is that every market in the country is unique. In talking to other markets I’ve learned that every market reacts differently,” he said.
Other newspapers that are considering opening a digital marketing services branch of their business should be prepared for constant change and lots of hard work. “We’ve tweaked our products and packages. We sell in bundles off an a la carte list of 20 or 25 offerings, and we feel we have it right. The acceptance is great. But, this is by no means easy money,” Griffing said. “It is, for certain, effort and money that is well spent.”
Ellen Sterling is an award-winning journalist. A New Yorker, she’s now living in Las Vegas, where she blogs on the Huffington Post, reviews shows and movies, and freelances. Reach her at firstname.lastname@example.org.