Selling CPM: How to Kill Local Media

We hope Broadcast and Newspaper execs fully understand why Yahoo! is hurting.

YAHOO! relies heavily on pageviews, commodity content and CPM or ‘cost per thousand’ selling of banner ad inventory. With online ad inventory growing everyday, that creates a glut. When ever there’s too much of something, the value goes down. Simple supply and demand principles.

Yahoo gets killed playing the ad commodity game. Too many TV, Radio and Print companies employ the same tactics.

The Wall Street Journal highlighted many sources that support what we’ve preached for many years: selling your web inventory via CPM or ad networks is bad business and turns your journalism and content into a commodity.

At Yahoo, that (CPM) rate dropped to an average $6.50 in July 2011 from $7.65 in July 2010, while at AOL, that rate dropped to an average of $7 in July 2011 from $9.45 in July 2010.

Not only have CPMs declined over the years, but the old axiom of ‘content is king’ is starting to lose it’s lustre. Unique content will always have excellent value. But if you’re just building and boasting about about page views & Facebook fans, your toast. Relying on these once useful formulas is a recipe for slowly killing your local media business.

Rob Norman; executive at WPP PLLC’s GroupM North America, told the WSJ. “Just because you have a lot (pageviews) doesn’t mean that you have something that is of distinct value.”

Take a look at the chart below from the Wall Street Journal. You’ll see why old school, web revenue tactics don’t work anymore.

 

Newspaper CPM web sales & Yahoo

Morris Reunites Web & Print Staff

For years, Internet research analysts have scared Newspaper and Broadcast companies  into thinking they had to create a separate staff for digital. While it sounds good on paper and some of that strategy works in unique situations like Deseret Media, it’s now being seen as a deeply flawed plan for most local media operators.

Publishers are steamed. They lost valuable time in trying to ramp up endeavors that were not only expensive, but they created internal warfare that local advertisers found appalling; ex: stay away from my client with your Internet stuff !

Thought leaders warned that traditional sellers were incapable of learning new sales skills. We think that’s a large pile of elitist bunk designed to keep publishers & GM’s in the dark and hooked on outside help.

Almost any Newspaper or Broadcast sales rep can become an excellent digital seller. You accomplish that by addressing the core issues: compensation, management culture, job descriptions, product line, in-house market intel and training.

We’ve seen it first hand. Applying old school sales & business principles to digital is much more effective than pouring scarce budgets into tech, manpower, separate divisions, outsourced sales trainers, research firms and expensive conferences.

Read how Morris Communications is reconfiguring its divisions, executive team, and sales operations…..Morris Digital Works (MDW) is being folded back into the main corporate structure at Morris Publishing. They spelled out two specific goals for the company:

1. Turn Morris Publishing Group from contraction to growth by 2013.

2. Change MPG from a newspaper company into a Digital-First media company that publishes newspapers.

Valuation of Digital Assets. Inland Press

Local online news & info is about to enter it’s next phase. Newspaper, TV, Radio and hyper local operators can no longer run digital with their fingers crossed. Having editorial execs drive the digital bus by themselves is now seen as a recipe for financial pain and loss. Every part of the business is now up for serious scrutiny: who’s in charge, sales plans, management structure, skill sets, path to profitability, etc. Topping that list is the financial health and business plan of the online operation. Having superior content is no longer enough.

Internet financial health and online investment values were the focus of my session at the Family Ownership Conference in Chicago last month. Inland Press invited me to do: Digital Valuation of Newspaper, Broadcast and Online-Only Assets.
Valuation of Digital Assets. Inland Press. Oct 2011

Digital Diagnostic for Radio Websites

Can Radio beat Newspaper in the online news space?

Here’s part 1 of last week’s webinar we did for a group of Radio executives. Merlin Media and Genesis Communications are featured in this session. We focus on the issues affecting Radio’s ability to build sustainable, online business models.

Newspaper’s Digital Competition

How Newspaper Can Beat Digital Competition. UPDATED for Oct 2011. Slide deck from this week’s webinar. Some competitors are familiar, others are not.

Featured topics:

  • Centro: Friend or Foe?
  • Philly.com gets crushed on Mainline by indie website; AroundMainline.com
  • Huffington Post and their aggregation model to trump Patch model?
  • Patch President; Warren Webster, qualified to talk revenue?
  • CPM selling is killing Newspaper websites.
  • DataSphere helping TV get into hyper-local space.
  • Newspaper Web Competition Oct 2011