BuzzMachine

Recently, at CUNY, we held a roundtable for ad sales people from hyperlocal blogs to big newspapers to hear what they are hearing from local merchants. We’re wrapping up our research for the New Business Models for News Project — indeed, it was Alberto Ibargüen, head of the Knight Foundation that funded this work, who said he really wanted to hear sales people’s perspective — and beginning research for Carnegie-funded work on new ad models, products, service, and sales methods, working with The New York Times on The Local. Some of what we learned; the first four are the most important to me:

* Most important, I think, is that we won’t be selling media to merchants — banners ‘n’ buttons — so much as we will be selling service: helping them with all their digital needs, including optimizing them in Google and Yelp and social media and mobile. I’ll write a post with more thoughts on this shortly.

* Voice matters. Local bloggers said they are must-reads because of their voice in the community (the human voice of the neighbor over the cold voice of the institution) and that — along with a constant flow of posts and news and the audience and conversation that attracts — makes them must-buys for advertisers. One blogger made the newspapers visibly jealous reporting that advertisers are coming to the blog asking to advertise because they had to be there. Another way to look at this: The service must be part of the community. One of the bloggers covers new businesses in town because that’s news; ads may follow but even if they don’t, the site will cover commerce in the community.

* There is interest in network sales. One newspaper exec in the room said she’s jealous of the new advertisers smaller bloggers get and would be interesting in having those bloggers sell into her site. The blogger is also interested in getting revenue from larger advertisers via the newspaper’s sales. That networked approach is key to the optimization of value we projected in our new business models for the local news ecosystem: the advertiser can be better served by appearing in more services with easier purchase; the large site can get new customers it could not otherwise afford to sell; the small site can get large advertisers it could not otherwise attract; all ships rise on this tide. (However, we must find a new word instead of “network,” as it has low-value cooties associated with it. Alliance? Ecosystem? Suggestions?)

* We at CUNY are going to be investigating the possibilities for citizen sales — new sales forces and new sales businesses that can sprout up alongside and help support the new news businesses. The group saw potential here but also saw the need for training and quality control.

* It’s clear that local merchants still need education. In the early days of the web, we had to sell advertisers not just on the value of our sites but on the value of the internet itself. That effort continues with smaller advertisers. That means that there’s a greater cost of sales. It also means that this is a means of sales — come to our internet seminar (a technique that is working for various of the participants). And I see a role here for organizations such as universities (not to mention chambers of commerce) to help local merchants understand the value of the internet.

* Local ad agencies also need education still.

* There was some debate about the sophistication of local advertisers and their need for data, but it’s clear that in many cases, media have to collect, analyze, and present data on performance and return on investment. One of the more established companies said all that matters to small advertisers is ROI (return on investment: feet to the door and ringing cash registers). One of the newer companies said more data is needed to prove performance and value. In some cases, we will measure will be attention, in others leads produced, in others sales, and in others more intangible measurements about community and relationships. At our conference on new business models for news in the fall, Gannett talked about research it did with Ideo that found that very local merchants need discovery (read: search) but in many cases, their customers already now they’re there; so what they seek is better relationships with their communities; how do we deliver and measure that?

* The simpler the better. Local merchants are not buying CPM-based advertising. They’re buying timed sponsorships. They want to see the ad they bought on the site.

* Google is playing a bigger and bigger role in local (via the web and now mobile). Some local merchants don’t bother having a site; their ads link to their Google place page.

* One old law of sales is still true: get one butcher advertising and that helps force the next one to join in.

* Self-serve platforms for buying advertising are not the answer. Sales is still needed. I’ve heard that in more than one horror story about low revenue from build-it-and-they-will-come efforts. Once an advertiser is sold, I’ve also heard of success in enabling them to update their ads (e.g., providing them with advertiser blogs).

* Replicating print ads online doesn’t work for advertisers or readers. No surprise there; the only surprise is that publications and merchants still try.

* There are other products besides advertising to sell: email, events, coupons (which work well for many local sites). There was some debate in the group about the value of video as a vehicle for advertising and as a form of advertising itself. More experimentation is needed.

At CUNY, our next step will be performing research with local advertisers/merchants. Then we’ll work on R&D on new ad forms. Then we’ll try to train citizen sales forces. This is the next step in our work on new business models and sustainability for news. Stay tuned.

: LATER: In the comments, Dave Chase of SunValleyOnline adds great notes:

Great observations and consistent with what I have heard/seen from working with lots of local advertisers at SunValleyOnline which is one of the sites talked about in the CUNY “census” you guys did that has managed to build a reasonable (and profitable business). I generally agree with what you’ve laid out but will amplify or differ with a few items.

1. Education: Hands down the biggest need I’ve seen. Sales people need it. Merchants need it. Local agencies/marketing consultants need it. Citizen ad sales will really need it. It’s the reason I collaborated with a former colleague to create a how-to resource for local merchants on marketing in the digital age that I’m making available to the ventures I’m involved with. I believe there’s scalable ways for local sites to tap into this without having to do all the training themselves that can also serve as lead generation.

2. Tools for advertisers to manage their own ads: Despite having two tools (Impact Engine and Mixpo) that have very easy interfaces and through much encouragement, virtually no advertiser is taking advantage of it. They simply want us to take care of it. The advertisers I’ve worked with aren’t sophisticated at all from a marketing perspective.

3. VideoAds: This is primarily a function of the size of advertiser you are going after and where they’ve advertised. Generally, it’s the bigger advertiser who has run TV ads before that will be candidates to move $$. Turns out one of the categories where $$ are finally starting to move is political ads. The recent Supreme Court decision will accelerate that. Dynamically built videoads is a particularly promising area and is something that took place in the recent Massachusetts Senate race (on the winning side). There’s some powerful tools that allow A-B testing, message optimization, etc. that are accessible even to the smallest advertiser.

: And Max Kalehoff says it well in the comments: “Sell the outcome.”