Local Media and ‘Dual Business Models’

Here’s an interesting piece from the TechFlash blog about local media and business models, newspapers in particular. No revelations but here are paragraphs of interest:

Having gotten closer to “the last mile” of the Internet, I’ve come to observe that in most situations the local sales organizations of the incumbent media are more encumbrance than asset.

Consequently, the smart incumbent media should setup a parallel salesforce filled with “hunters,” leaving the existing “farmer” salesforce to harvest the longtime advertisers for as long as they can. This new “hunter” sales force would need to be dramatically different than the typical call center that newspapers have for classifieds.

This can be done. Just look at Microsoft’s Xbox. It succeeded with a completely different product, sales and marketing strategy than historic businesses. Likewise, local online news businesses need a completely different sales approach that reflects a customer base that’s broader but with less revenue per customer than their legacy business.

The sooner local media recognize dual business models — rather than dueling business models — the sooner we’ll see hiring rather than firing being the storyline of local media.

The tactical advice might be somewhat different for newspapers, radio or local TV stations or directory publishers. For newspapers I would go beyond the dual sales force (though that may be sage advice) into product diversification that goes well beyond online news. I’ve argued this before. 

But what’s also going on with newspapers is Yahoo! and APT. Most major US newspaper publishers will be tied in to the Yahoo! network. Informally last week Lem Lloyd who runs the Yahoo! newspaper consortium from the Yahoo! side was recounting some dramatic success stories over lunch with the Yahoo! network and platform. 

And with the Yahoo! network, newspapers to varying degrees are starting to reach beyond their traditional advertisers. The TechFlash piece suggests getting more aggressively into directories. But this is starting to happen in some cases, with some of the Yahoo! newspapers selling display advertising to SMBs in the same way that directory publishers sell search marketing to that same audience. They’re able, with Yahoo!’s traffic, to claim reach well beyond what they could otherwise. 

However, regardless of the strategy or tactics, online publishers must reconcile themselves to stronger competition and lower margins than they enjoyed offline.


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