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Archive for September, 2010

5 Things To Do Now

Thursday, September 30th, 2010

We ended our 2010 Local Mobile Advertising Conference last week with “Five things to do next” for those trying to tackle the mobile space. Prior to compiling the list, Colby Atwood, Pete Conti and I conferred around a baby grand piano in the hotel lobby and quickly came to agreement. One of them is watching a must-see video.

As media analysts we struggle to make our advice practical.  As I’ve said before, we have the easy job:  We say smart things, then go home, leaving our clients with the difficult task of implementing everything. We try to remember that.  But we don’t buy into the vogue ideas of “convergence” and ”multiplatform” opportunities that other consulting firms and many of our clients seem to be embracing.  Many of the recommendations swirl around Clark Gilbert’s keynote presentation, which generated a lot of buzz.  You could see an immediate uptick in the Twittering via hashtag #bamobi when he started speaking last week about separate — not converged — staffing.

With that need to offer actionable advice squarely in mind, here’s what we’re recommending to those eager to win in the mobile advertising space:

1.  Become a fervent evangelist within your company. To assist you, we are making the most dynamic presentation of the conference available on video to everyone. It’s the presentation by Clark Gilbert, CEO of Deseret Media.  We want you to show it to the top people in your company.  We don’t want you to forward the link.  We want you to show this in-person in a 90-minute meeting with your CEO, chairman, board of directors, publishers, GMs, CFOs or anyone who is an executive decisionmaker.  If you wish — and if our schedule permits, one of us will make ourselves available via live conference call afterwards to discuss the implications. No charge. Yes, we think it’s THAT important to the media industry.  Clark’s presentation was nothing short of stunning.  We want you to get the boss’s undivided attention. If you need fodder to sell the concept, just tell them that a Harvard Business School professor-turned-local-media-CEO believes that 9% of media companies will survive in the next decade, and that this video describes how to ensure that your company might be one of them.

2.  Think about your career/consider finding another job. Pound the desk for more staffing and expenses for mobile initiatives in 2010.  This is your chance to lead your company.  No one doubts that mobile will be a huge opportunity in the coming years, so hitch your wagon to that star.  If your company doesn’t “get it” or turns your down, consider leaving. It is highly likely that you’re in a dead-end career if your company doesn’t see the opportunity through your eyes.  Maybe it’s you.  Maybe it’s them.  If it were 1910 and you were working for a blacksmith who didn’t believe automobiles would overtake horses, I don’t think your career would fare well staying around to convince the blacksmith.

3. Fix your organizational structure. Colby Atwood believes (and we all agree) that you can’t allow your legacy media folks to control what you’re doing with mobile. They see the opportunity through a legacy-media lens and will apply values and standards that are good for their legacy media jobs, but not for the new mobile environment.  Who reports to whom?  We don’t believe you will grow as fast as you can if mobile opportunities are determined or heavily influences by people other than those who are squarely focused on mobile opportunities.  You need people you can fire if they don’t meet your mobile advertising goals.  Here’s the litmus test: Would your sales manager fire a rep if he made 200% of his radio, yellow pages, TV or newspaper budget last quarter but 0% of his mobile advertising budget?  If the legacy media people are in charge, they’ll be sending that rep to Cancun. But if your company were serious about the mobile space, that rep would be fired — or at least penalized.  Convergence sales are fine, but they won’t get you where you need to be.  I’ve said it before and I’ll say it again and again and again:  You won’t get anywhere until you have people you can fire for not meeting their online/mobile goals.

4.  Invest in database marketing. Pete Conti, our guerrilla marketing genius, is the most fervent advocate of this. Hire a database marketing manager or staff if you don’t have them in place already.  Your tech guy isn’t the one.  Your whipsmart marketing manager probably isn’t the one.  The person needs to know about databases, how to segment lists, and how to deliver targeted advertising to individuals.  Walter Hussman, publisher of the Arkansas Democrat Gazette, stopped by the hotel to have lunch with us and stunned all of us by talking about the need for “mass media” to migrate to a “one-to-one” delivery model for advertising.  He wants to deliver advertising on mobile devices to individuals based on their Claritas profiles, not based on what they happen to be reading.  That can’t be accomplished without a database marketing person.  Hire one.  Or two.

5.  Optimize everything for mobile. If our projections are true, nearly two-thirds of all online advertising will be viewed on a mobile device – whether it’s an ipad, laptop, or smartphone. All websites should be mobile-ready right now. Prep all your classifieds, video, basic HTML, photos, animations, etc. for mobile delivery. Examine the opportunity for App-delivered content, but it seems likely that mobile browsers will continue to be used very heavily as people try to access the current web on their small screens.  If your site is difficult to navigate or see, it’s the equivalent of downtown retailers failing to anticipate the massive movement to the suburbs in the 1950s and 1960s, and falling victim to strip malls.

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An Endless (Spending) Campaign

Friday, September 24th, 2010

Lately, there’s been a lot of interest in Borrell’s political ad spending report, which we released in February. Many reporters we’ve talked seem staggered by the sheer size of political ad spending — a projected $4.2 billion between last January and this November.  And that’s just the advertising cost. If the rest of political spending to support this year’s elections is thrown in — renting halls, travel expenses, buttons and banners, and that shadowy “walkin’ around money” in every advance man’s briefcase — the total rises to almost $8 billion. In total, that amounts to more than $34 for every eligible voter. If current projections hold, this year’s elections, from local to congressional, will be the most expensive in our history.

As the old saying goes, “All politics are local.” That’s not the case with political advertising. Right now, about a quarter of every dollar spent comes from outside local markets, and the demand for and use of national money grows every year, and ratchets up every cycle. The political parties themselves support vetted House and Senate candidates with national funding, and they are far from alone. Political Action Committees of all stripes are eager to help out in races where the right winner can help push their agendas. Last year’s Supreme Court ruling erased limits that had limited overt corporate political contributions. With those impediments erased, the infusion of their newly legal money is projected to increase this year’s spending by a healthy ten percent.

When you think of corporate political contributions, you probably envision seven-figure checks and giant multi-national corporations. Some probably involve such Hollywood scenery, but the practice doesn’t stop at the higher offices. There are plenty of local businesses that would like a favorable zoning ruling, a new sign ordinance, or amended street parking rules. Now unfettered, corporate money can be expected to flow to every level of politics.

Well, what’s wrong with having more money in politics? After all, it’s just a matter of free speech. According to the numbers, the problem is very basic. As the cost of one level of election goes up, it drags the cost of more local elections up with it. A quarter-century ago, when I was a reporter covering local and county elections for a small Arizona newspaper, the biggest election expense most for the candidates I interviewed was the cost of the signs that adorned lawns and utility poles. That’s not the case any longer. Nowadays, even city council candidates run TV spots. Spending this year on local elections will reach $1.6 billion – more than $7 per eligible voter.

That means that a city council election in a mid-sized town can cost a successful candidate more than $350,000. That is a lot of money, and it’s roughly twice what it was just a decade ago. It is a level of spending that exceeds what most of us have in the bank most of our lives, outstrips the full cost of the average American home, and is several times the level of the average U.S. household’s annual income.  Fundraising to achieve this amount requires more than a few people working phones, or working a crowd at a rally. It needs professional help — and that, by itself, costs money. A candidate who wants to win will either have to be personally wealthy or have access to someone who can spare that level of cash. The bottom line: rapidly increasing political spending levels signal the end of successful grass-roots politics. From now on, only those with access to large sums of money will be able to compete successfully for even local political office.

We foresee local elections in 2011 costing even more than those in 2006, which was a year with congressional contests. Spending during 2012 will be 20 percent higher than this year — over $40 per eligible voter.

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Follow the Money

Monday, September 20th, 2010

I seem to find the most clarity when confusion reaches its greatest depths.

It occurred just last week while I was sitting on stage in the Time-Life building, participating in a panel discussing the “future digital landscape” for TV stations. The session was interesting, but I noticed a lot of blank stares as I listened to fellow panellists talk about things like addressable set-top boxes, managing loads of data, the fate of local news broadcasts, and mobile DTV.

Toward the end, we were all asked a final question:  What’s your advice to local broadcasters preparing for 2011?

My response was pretty simple:  Stations are tackling too many opportunities with too few resources.  Cut opportunities and add staff.

The opportunity issue is a big one, but easily solved by adopting a simple mantra:  follow the money.   Half the things being pursued by local media companies has no hope of ever paying for what it costs to implement.  Every opportunity should have a return on investment.  Asking for an ROI will kill three-fourths of the opportunities, and you’ll be better off for it.

An example I gave was KSL-TV and its parent company Deseret Media in Salt Lake City.  Clark Gilbert, a former Harvard and Brigham Young professor, left the academic world last spring to take over as CEO.  Armed with more than a decade of trying to tell media companies how they need to prepare for the digital disruption, he started acting immediately.

He assembled one of the largest digital staffs of any local media company.  Which TV station do you know of that has about 30 digital employees?   Then he bought a mobile “deals” site, then he reorganized The Deseret News, laying off approximately 40% of the news staff.

All of this sounds pretty dramatic – and you can certainly hear more from Clark when he keynotes our mobile conference next week in Dallas.   But it would still be academic if it were not for the results he’s already seeing.

When it comes to web revenues, the largest-grossing TV station brought in about $7 million last year.   KSL-TV will beat that by far this year.

When it comes to traffic, the average local media site hold a 20% or 30% share of the Internet audience at best.  KSL.com has a 62% share. (Prior to my panel, I visited The Media Audit booth in the lobby and asked Phil Beswick to look up the KSL number.  “Whoah!” was his response when he saw the KSL results. “I’ve never seen that!”)

One more thing to note.  At a time when most media companies are just experimenting with mobile, Deseret Media’s mobile site already claims the No. 4 spot in terms of Internet traffic and, according to Clark Gilbert, is closing in fast on Nos. 2 and No. 3.

The most resounding advice I can offer is to follow the money.  Too many media companies are chasing everything they read about and wind up drowning in opportunities.

The best opportunity filter might just boil down to five words: “What’s the ROI for that?”

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