Local Media's Hidden Asset: Their Salesforces

I've said this before on this blog and I'll say it again. Traditional local media companies; radio stations, TV stations, local newspapers, and the like, are in a tough situation. Each of those businesses had a monopoly or near monopoly on their audiences a decade ago. Now none of them do.

The owners and operators of these businesses have been trained to think their strengths are local and relevant content, their monopolies or near monopolies on distribution (spectrum in the case of radio and TV), and their brands. All of these assets are waning quickly.

But there is one asset that is still quite significant and the value of it is growing, not shrinking. It is their large, well trained, and well connected salesforces.

I was reminded of this fact when I read Claire Cain Miller's piece on Curbed and the Village Voice today. Before I go on I should disclose that The Gotham Gal and I are small investors in Curbed and The Gotham Gal is what I like to call a "hands on investor" in the company.

As Claire explains in her piece:

The Village Voice …. has built this sales force over
five decades as a weekly newspaper. So it is acting as a local ad
network for Curbed, Mr. Steele said, selling local businesses ads for
its Web site as well as the Curbed blogs and then sharing revenue. In
return, it gets to offer Curbed’s articles and readers, in addition to
its own, to lure advertisers.

This story is playing out all around local media these days.

We have an investment in the leading online audio ad network, Targetspot. Targetspot has online audio advertising inventory from many of the largest radio station groups, as well as audio inventory from "pure play internet" services like AOL, Yahoo, Live365, Slacker, and several more that have not yet been announced. Advertisers don't buy the individual stations or services, they buy the network, either on a national, spot, or local basis.

When the network is "sliced" along a local dimension, like "all online audio listeners in New York City" that inventory is valuable to a local advertiser. And Targetspot's radio station partners who have salesforces in New York City can make good money selling the local network buy. And increasingly they are interested in doing just that.

But it doesn't stop at CPM buys like banners and audio ads. The same thing is happening in search and leads. Our portfolio company Clickable has a service called Platform that local media companies use to resell search and leads that come from search ads to their local advertisers.

This makes all the sense in the world. The media business, either on the national or local level, is losing its grip on audiences as they fragment and disperse all over the digital realm (including of course mobile). But they do not need to lose their grip on the relationships they have built up with local merchants since the days of Mad Men. What they need to do, and what they are increasingly doing, is reselling the inventory of others to their customers. As Claire points out in the NY Times piece on Curbed and The Village Voice, it is a win win for everyone, including the local merchants and their customers and potential customers.

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Comments (Archived):

  1. im2b_dl

    half our basis is on local retail… so Fred this is the one post I want to go…ssshhhhh …lol

    1. fredwilson

      doesn’t a bigger pie help everyone?

      1. im2b_dl

        of course hey Fred lol if you knew about our company you’d laugh …it was built out of reaction of my time from working for NBC and the studios…to give indie filmmakers a precedent and an architecture to the same ad dollars that the networks and studios do…our basis for our company is a rising tide raises all boats… unfortunately not everyone has the priority of keeping the tubes open for the little indies.sorry comment was totally tongue in cheek (with a seed of truth…don’t want the people that can buy the whole pie to do so … my bands of gypsies trying to make sure that bigger pie doesn’t get scooped in this paradigm shift.)

  2. iPaulLee

    Fred,Having met with several sales teams in both radio and print in smaller local markets, I think you’ll find that the skills these guys have built up over the years are not necessarily transferable. The amount of training it would take to get these folks up to speed on selling both web display and adwords inventory won’t be an easy task.

    1. fredwilson

      well then we should get busy and start doing it. they will need those skills going forward. also many of our companies have tools they can use or others can use for them to make it easier.

      1. mterenzio

        many companies big and small have been trying for many years to convert their sales force to understand online. what appears to be missing here is that mature monopolistic companies become institutions and the culture is hard to change. does the advertising director or the publisher understand online? if not, how can the company expect to convert the salesforce.these problems may be surmountable by good management, but that’s hard to find. If you understood online, would you go to a newspaper to work? disclosure: I work at a newspaper

        1. fredwilson

          So the answer to that last question has to be yes

          1. mterenzio

            That’s the greatest comeback I’ve ever heard on that one Fred.

  3. Adrian Bye

    Does this mean clearchannel will become the national’s local salesteam for the web? 🙂

    1. fredwilson

      could well be

  4. MattMyers

    Yup. At my last startup, 30elm, which did lead generation for architects, we were working market by market partnering with city magazines. Each of these city magazines would have 50+ architects and interior designers advertising with them already. You needed to give those salesforces a no-brainer online package that was a flat annual or monthly fee, and offer them a generous commission for selling it. I’m amazed that more web startups aren’t being creative in doing this.

    1. fredwilson

      i love that example. thanks for sharing it

    2. Shane

      This is so funny that this idea is being floated about here. Not two weeks ago we had an epiphany at our start up to do just this to fill our local ad inventory. If nothing else, I see that we are not crazy for pursuing this strategy. 🙂

  5. ErikSchwartz

    I have been trying to convince the radio industry of this for several years now. The problem is that they’re so hysterical about the changing models and their own mismanagement issues that they’re paralyzed. CCO has a huge opportunity here and they’re likely never going to notice it. It’s too late for Citadel. Cumulus, Emmis and Saga are not far behind. CBS is probably the best positioned.Radio needed to buy into this 3-4 years ago. Now is too late. So much of their market cap has evaporated over the last few years that they no longer have the juice to do deals.For example. I was at the NAB radio show last week in Philly. Foursquare is a perfect fit for local radio (Clearchannel in particular), none of them had even heard about it. I showed it to them and they didn’t get it at all. They’re so focused on what they need to do this quarter to make their debt payments that there is zero strategic thinking going on. Citadel barely scraped together $2M for an interest payment last month. They have a $30M payment due in Q1 ’10.

    1. Dave Pinsen

      “I have been trying to convince the radio industry of this for several years now. The problem is that they’re so hysterical about the changing models and their own mismanagement issues that they’re paralyzed.”Apparently (this is on the record companies as well as the stations, I guess) new releases where sent to radio stations on disk, via courier. A small Canadian tech company I’m familiar with developed a secure digital network as an alternative for distributing new releases to radio stations, and for a long time they had an uphill climb getting it adopted. But it looks like they are finally getting some critical mass with it now.

    2. fredwilson

      That’s all so very true. But at some point the salespeople are gonna stand up and demand this

  6. GlennKelman

    Agree that local media have established distribution, but not sure that’s newspaper’s core business. The attitude toward local advertising sales mostly seems to be “not it” because it has been so low margin. Maybe the Village Voice, East Bay Express, Seattle Weekly would embrace these businesses out of desperation, but what got most people in the newspaper business in the first place is the love of breaking news & writing features. So that would be a hard — but perhaps necessary — transition.I also feel like it’s hard to uphold the business side of most newspapers when that side has struggled to compete as much as the journalists have: more people, for example, read NYT content than ever, but advertisers pay less.

    1. fredwilson

      As I said to erik’s comment, that’s all true. But at some point these salespeople and their managers are going to revolt and demand inventory that their customers want to buy

      1. GlennKelman

        Maybe I misunderstand, but Erik and I seem to be making different points. He’s saying local media are short-sighted and I’m saying that at least some are mission-driven. That may be the same to you, but it’s a little different to me because I think there’s a long-term place for journalism alongside user-generated media, and that selling local ads for each type of site has different and serious challenges.http://www.techflash.com/se

  7. robpaterson

    Have to agree that its easier than it seems to get local sales staff selling any form of online products. Whilst the existing relationship with the merchant is definitely a plus there’s a conflict of interest (at least for the sales rep) in selling an existing print / radio product and then new media – not least because the online product will normally be much cheaper and they probably get paid commission on the value of the sale. In our own experience we had to set up a separate online only sales team to sell new media products to existing customers of the print product – seems absurd but has worked.

    1. Shane

      Rob, how did you align the interests of the new media publisher and the ad sales rep? At our start up, we feel that by offering our inventory for free, they get to pitch a product basically risk-free, and if the advertiser takes it, the sales rep (and thus, the old media publisher) wins by taking a cut of that revenue.Thoughts?

      1. robpaterson

        Shane – in our case we were both the print and new media publisher. We know that print has a limited future so we made sure online became the priority in the business. Even if this meant losing print customers to the online version. I’m sure the scenario you suggest can work as long as everyone understands what they’re getting into – my nagging doubt is the traditional reps ability to properly represent the value proposition of online.

        1. Shane

          Ahh, gotcha. I guess the answer is to really educate the sales rep so they can pass that to the advertiser?

  8. Todd Buckley

    A bigger pie only helps everyone if everyone gets to have a piece. 😉

    1. ShanaC

      I prefer apple.

  9. William Mougayar

    I think the relationship between Village Voice an Curbed is much more symbiotic than between old media and new media. That’s why it worked. Old media sales forces can’t necessarily adapt to new media selling so easily. The fact that old media is “losing its grip on audiences” as you very well articulated,- when combined with your proposal of selling external inventory, will accelerate their demise, in essence increasing their dis-intermediation from the new audience clusters (as their value is reduced to being a poor distributor). It might be a stop-gap or band-aid, but not a permanent solution.

  10. mikenolan99

    Amen and Hallelujah! As a guy who owned outstate radio stations in Minnesota, I can’t agree more with your comments.This technology can really make a difference in unrated markets. Can’t wait to learn more.

  11. Jamie Hutson

    Fred, you’re absolutely right, the best asset these local media companies have is their sales team. Their content and distribution are easily one-upped or copied these days, but 30 years of advertising relationships take, well 30 years to build. My company is working on a complete advertising and content platform actually using the products of two of your portfolio companies (outside.in and clickable) and its getting really interesting. As we are moving into new markets we are finding that local advertisers love clicks and calls, but are still hung on the tangible nature of their logo in print. The right combination is a website that has some zing, and a solid print partner. You need that established relationship to get in the door, but once the conversation happens, the opportunities are huge.

    1. robpaterson

      Have had the same experience with local advertisers loving clicks, we run our own ppc product on our websites. But I don’t see that it’s a case of print or online. Surely at the moment it should or can be both – print hasn’t stopped working entirely…… yet!

      1. Jamie Hutson

        you’re right Rob, at the moment it (being a local smb marketing mix) should be both. thats the point here, I feel. local media has all of these great relationships, and they should be pioneering local ad sales online. its the production of the online vehicle that isn’t their core competency, so thats left to us to figure out.

    2. fredwilson

      Ooh. Portfolio company synergy. I like it

  12. anon

    I just spent a night catching up with a peddler who used to work for me in Santa Cruz. He told me he’s working for Yellow Book. I reflexively counseled him that it didn’t seem to wise to me to be working for any ‘book’ these days. He responded “not so, we are the the largest Google reseller in the world. We help 100’s of businesses get into the yellow pages and onto google at the same time” They have 12 people covering a few small coastal cities and towns. That’s quite a new media sales force.

    1. Chris Dodge

      I’m glad you brought this up, the yellow pages have a huge salesforce specifically designed to sell services to small local business. While their primary service is regarding a print product, that “sell” will eventually migrate to online marketing services as well.While “local” seems like the “next big thing” for the Internet, no one should underestimate the complexity and expense of building out local sales teams. It’s very hard to scale those types operations.There will ultimately have to be “sales-team aggregators” which resell multiple online services, such as Google keywords, Yelp services, etc.

      1. Shane

        There is no doubt that managing a sales force is the most complicated and resource intensive process in business. At my start up, we were absolutely bashing our heads against the wall to figure out how to get a big local sales force while still turning a profit. This is why we are so excited to move in this direction!

      2. fredwilson

        I agree

    2. fredwilson

      Yup. Selling yellow pages and google at the same time. Couldn’t say it better if I tried

  13. maxkalehoff

    You’re dead on that the trusted local-media sales forces are a massive asset: there’s a few hundred thousand of them, with feet on the ground. The flip side is that the first wave of search local ad resellers didn’t sell or deliver performance or leads; they oversold benefits delivered buckets of clicks that didn’t perform. As a result, upwards of 60 percent (and as much a 90 percent) of local businesses don’t renew their deals with search ad resellers after 12 months. The next wave, and viability of local digital advertising, is contingent upon an ethical sales approach and delivery of performance, in most cases, search-driven leads. Trusted local media sales organizations, often vertical-industry focused, are have been and will be a critical enabler of local advertising and local economies in general.

    1. maxkalehoff

      To back up my comment above, I should’ve included a link to the research we did with Borrell Associates: The Economics Of Local Search Advertising. You can download it here: http://www.clickable.com/Co

  14. AlanPearlstein

    Fred,I have to disagree with you here. a) local ad sellers revenue from selling 3rd party inventory is going to be far less than when they sell their own ad space. since they don’t own the space, there is less markup to work with and the the ad sellers parent company is going to need a cut also. b) you are giving the local ad sellers too much credit. online advertising is complicated, and not an easy transition for many of them and c) the local advertisers are not taking to online advertising. most local advertisers who try google, don’t continue running their campaigns.I wrote about this subject recently – “Why do the Yellow Pages Still Dwarf Google” – http://www.crosstargeting.com/why-do-the-yellow

    1. William Mougayar

      Alan, I agree with you, and we seem to be the only 2 contrarians here (see my above comments). A salesforce re-selling someone else’s product is a distributor. This kind of strategy is usually the beginning of the end.

      1. AlanPearlstein

        here is my prediction for the Yellow Pages – the largest segment of local advertising. the Yellow Page directory business is currently $26.5 billion. (hard to believe given consumers don’t use it). I predict that in 5-7 years the Yellow Pages will be a $10 billion business and only $1-$2 billion of the $16.5 billion that is lost will be spent online (or on digital marketing of any sort)- the rest of the advertising spend will evaporate. small mom and pops dont need to advertise – they have been buying the Yellow Pages because they believed that they had to, it is easy to buy and understand, it was the only game in town and all of their competitors were there.

        1. William Mougayar

          I’d like to believe that, but the online directories will have to get much better in the meantime.

        2. fredwilson

          If small businesses know what a new customer is worth to them (their ‘allowable’) and they can convert for less than that online, then you will lose your bet

      2. fredwilson

        For whom?

        1. William Mougayar

          (sorry for not being clearer) In this case, for old media that starts to substitute selling their core products by selling someone else’s products. This signals a weakeness and not a strengthened strategy, therefore it’s the beginning of a downward spiral because they will start losing customer loyalties. What I’m saying in other words is that although I like the Village Voice/Curbed synergy, I’m not sure we can make the extrapolation to synergy between old media and new media.

    2. fredwilson

      That’s all true today. But I care about tomorrow

  15. Mike Dougherty

    For those with experience trying to monetize Local Search, you know the old saying we’ve all learned: “Local is sold, not bought.”This is a great post which highlights one of the significant assets the major Local players still have. Hyperlocal sales forces (YP), and local brand advertising sales forces (Radio). There is a reason why the major search players partner with YP companies for monetization. Performance advertising has also been slow to be adopted by hyperlocal advertisers, not due to lack of trying by many different companies/platforms. As the search and audience products evolve, these sales forces will remain a major asset and will be the tip of the spear to educate advertisers on performance advertising at the local level.

  16. Lock

    Like most online publishers, Curbed gets pitched by national ad networks every day. But I’ve always liked Nick Denton’s thinking: national ad networks offer such low CPMs (and often such horrible looking ads — let’s not even get into the calibre of sites that let Kontera put those horrible double-underline ad links on their content) that they’re not worth the conflicts that arise when you find out that a big national advertiser you’re going after is buying its way onto your sites already for a $1 CPM. So, we tell the big ad networks that we’re not interested.Local ad networks are different, though, and Claire does a good job in her piece explaining why. The Voice has been particularly good at selling small restaurants on small ad deals ($500-$2500) that we don’t have the resources to go after. Whenever the Voice has potential new advertisers, they check with us to find out if we’re already working directly with that advertiser; if so, they’ll leave that business to us. If not, and it’s not someone we’re likely to go after ourselves in the near-term, we’re happy to have them pitch, and hopefully sell, our inventory.As they get better at selling, though, there are tough decisions to be made. Curbed has always done a good job selling ads to local real estate firms; it’s actually a fairly concentrated market, at least in NY/LA/SF, so it’s easy for us to manage those relationships. This week, the Voice approached us about an ad package for one mid-size NYC real estate firm that we haven’t yet broken business with (for no lack of effort on our part). Should we let them buy onto Curbed via the Voice, hoping that the advertiser may finally see the value of advertising with us? Or should we keep going after the advertiser ourselves? It’s not an easy decision. But I appreciate the Voice coming to us with the opportunity, as well as the fact that if we tell them no-go on this particular advertiser, there won’t be any hard feelings.Related: hmmm, maybe it’s time to start Curbed Radio…

    1. fredwilson

      Take the money Lock

  17. Jeff Pester

    Alan brings up a good point regarding the reselling of 3rd party inventory. But before we even get to the point of selling 3rd party inventory, this is already a problem with reps selling their own online inventory. In my research for UrbanRadar we discovered that local media sales reps routinely avoided selling their own online inventory unless and until the traditional inventory was sold first. And the reasoning was simple: They could sell a print ad for say $1500 and a 20% commission or sell an online package for $200 with the same commission. It’s something of an internal sales channel conflict. For a “feet on the street” rep you just can’t pay the bills with online sales commissions, no matter how many online properties you’re selling across.Traditional media salesforces might work in larger cities in certain sub-markets where the aggregated buy is large enough, but for the majority of “local” markets existing media salesforces aren’t going to make this work. The transaction size for your typical SMB account just too small.I’ll go back to the comment I made on Chris Dixon’s recent post “The problem with online “local” businesses” (http://www.cdixon.org/?p=13…”…. I firmly believe that the accelerating adoption of Twitter and Facebook is going to have a huge and positive effect on this marketplace. What’s needed is a drop-dead simple CRM for the SME market that leverages Twitter and Facebook that would essentially be “sold” mostly by the customers of the SME themselves (since customer acquisition costs in the SME market are mostly deal-killers).”While it might be possible for some traditional media sales teams to capture a certain (smallish) portion of this online market for 3rd party/remant space, I think the future of selling in the local online market is actually some form of self-service/customer-driven sales model fueled by a more comprehensive CRM tool that incorporates/leverages social media and addresses the time/financial constraints of the SMB owners. When done correctly, this model probably wont need/require a meaningful sales force at all. This is the thinking behind UrbanRadar.

    1. Shane

      Why wouldn’t you bundle the print and the online packages together?

      1. Jeff Pester

        On the face of it bundling seems like a good idea, unfortunately traditional media companies (and their sales reps) have kind of screwed the pooch on this one already and it’s going to take some time and effort to undo the damage they’ve already done. Here’s what happened; About 10 years ago when traditional media companies launched their online properties they tried to sell the impression-based display ads as an adjunct in the bundle format you suggested. At the same time, the customers they were trying to sell to were also approached by reps from Internet-only properties like CitySearch, Yahoo, etc, who were preaching the “You’re wasting your money on print/broadcasting because it’s not trackable” mantra. As a result, traditional media reps, in an attempt to protect their underlying franchise (and their commission income) were forced in to the “If you buy a print ad, we’ll throw in the online advertising for free” pitch.The result was unintended but predictable; buyers became used to paying nothing for the online ads, thereby valuing them at zero. And unfortunately, their experience with online advertising as a whole over the intervening 10 years hasn’t done much to convince them that zero isn’t the correct price.Bundling seems like a good idea, but unless the rep has some great demonstrated evidence/testimonials that a bundled solution performs, it’s unlikely the client is going to pay for it as a bundle. As a rule, they’re going to continue to ask for the online for free as a condition to the traditional media buy.

        1. fredwilson

          Yeah, that’s all true. But a click is a click, a lead is a lead, a call is a call, and a conversion is a conversion. Merchants know that each of them are valuable and don’t expect to get them for free

          1. Jeff Pester

            Agreed, but it’s been difficult to date to measure conversion for the typical “local” business because of the inherent challenge in closing the loop from digital lead to physical transaction. Obviously solutions like OpenTable, the couponing and click-to-call companies effectively close that loop. My anecdote was based on the history of display ad selling/buying.

          2. fredwilson

            That’s why I’m excited about foursquare. The light weight self serve couponing system they built is a closed loop buy for the local merchant. As we see more of this kind of inventory become available at scale, I think we’ll see the local merchants start spending real money online

          3. Shane

            Gotcha. This is why I think we are in a good position at our start up, we are attempting to create a local coupon book type of scenario with our advertising, where the advertising is a value-added feature to our community. We are looking to incorporate the idea of promotional codes to close that loop, our hope is that our users will see the ad, and because it is relevant to them and it is a good deal, they will record that and utilize it when they next patronize that merchant’s establishment. What is interesting in the scenario that you mentioned is that while the perceived value of the online advertisement is zero, that means that if one or two people convert, then the advertiser is happy.

    2. fredwilson

      I don’t think so. Local advertising is sold, not bought unfortunately

      1. Jeff Pester

        Historically that’s certainly been the case. However, I’m pretty confident that moving forward we’re going to see the combination of increasing buyer knowledge/expertise and new business models move that needle from local advertising being sold toward being bought. Maybe slowly, but surely.

        1. fredwilson

          That’s certainly true but small merchants often can’t focus much time on marketing

      2. robpaterson

        I think that may be doing a disservice to the local merchant – I think they will buy or self-serve if its made really easy, buying print or radio ads is difficult and maybe the reps have always got in the way – the web is and can change that.

  18. Rahul

    I dont think the ad salesforce of local media will be relevant in a few years and with them the relationships will also erode .- the traditional local media had geographical constraints working in its favour. Local longstanding customers of these media ,who were also customers of local businesses,were good ad targets. This doesnt apply to the internet model. I dont go to a local website to find about good deals locally,but to find good deals in the internet. If it happens to be local ,well and good.This reduces the power of local media and hence their salesforces.- Local merchants do have a much bigger audience to advertise. But then they would go someone like google or yelp who can distribute their ads locally and by relevance and their sales force will be ones talking.- the new media is much more fragmented ,hence the ways of selling ad inventory has also changed. The local media salesforce need to retrained.In many cases ,the sales individuals may be retiring thereby affecting the relationships with local merchants.- I think going forward local merchants will place personalized Ads on mobile ,location based services which will be more effective.This will be automatic and algorithmic like google ,further reducing the role of local medial salesforce.

    1. fredwilson

      All of this is true but most local merchants need to have their hands held when it comes to marketing. Agencies can’t serve them because they are too small. So the local media salesforces have become their agencies. Radio often produces the ad for the local merchant, for exampleThat is why google resellers like yodle and reach local have grown so quickly. It is not clear if they have the right model but it is clear that the local merchant wants someone to help them buy online

      1. Shane

        I couldn’t agree more. When I think of my father’s business, a local costume shop, his idea of marketing is throw a few bucks here and there (both print and digital). There is definitely very little research, and he is a total sucker for good sales pitches. I see this as a reason these local sales forces will continue to be relevant for a long time to come.

      2. Rahul

        I agree that the local merchant wants someone to help them with the new media and old media ,as a onestop shop to publish ads. However,I dont think it will be the salesforce of old media with their antiquated processes. It could be someone like,as you said, yodle.

  19. jeffjarvis

    Fred,I agree and disagree.Disagree first: Having worked with newspaper sales forces for many years trying to get them to understand and sell online, I’ll say it was torture. They are accustomed to maintaining known lists of large (trapped) clients rather than creating new business. They sell restricted products and don’t understand how to serve those clients in new ways (other than creating new ad units online and thus clutter). They can’t imagine networked sales. They hate selling small at volume because they’re accustomed to selling big. Some can be and have been trained. But just as on the content side papers squandered the 15 years since the commercial browser in reinventing news, on the ad side it’s worse.Now the agree: I think there are many existing groups of people who can be a local sales asset with training and support. I’ve talked about this a lot with my friends at AnnArbor.com (whom I advise) and GrowthSpur and Prism among others about mobilizing new sales forces. I start with the notion of citizen sales: the neighbor of the hyperlocal blogger who can establish a business to sell her site and others. But I also look at other sales forces: why not mobilize real estate agents in town to sell advertising (they know everyone, they know local, they sell)? AnnArbor can mobilize college students to sell categories. And so on.We need sales and service. Just putting up build-it-and-they-will-buy automated ad tools won’t work. We also need to reinvent the service we give to local merchants, helping them succeed on Google, Google Maps, now Google Place Pages, Outside.in, Yelp, and mobile apps to come as well as local sites. We should figure out ways to do more than sell CPM – scarce space – and instead sell service and performance (that’s how Google took away ad dollars: it offered a better deal and shared the risk; how can we do that at local?).I agree with Lock (and Denton and Debbie Galant) that we also need to take the cooties off of networks. They’re not just for selling low-value remnant space. They are for aggregating relevant audiences.In the New Business Models for News Project at CUNY (http://newsinnovation.com), we found local bloggers bringing in $200k advertising and then projected that we could improve that markedly by (a) improving the products and services they sell to local merchants and, more importantly, (b) by joining in advertising networks (alliances, confederations, whatever) bringing metro-wide and also small-network (e.g., five towns around) advertising to quality sites. That needs a structure to build and support the networks and train and support the sales forces (which is what Mark Potts plans to build at GrowthSpur, for example).Newspapers can do this but we should’t wait for them; we’ve waited long enough.

    1. fredwilson

      well it is more than newspapers jeff. it is radio stations, tv stations, anda host of other local media companies and their salesforcesi agree with all of your points and think it will take a variety of effortsand platforms to make local work the way it needs to work going forward.

      1. jeffjarvis

        Good point. I talk too much about papers. The others could be in a better position because they’re not protecting monopolies, but I haven’t seen much action out of them, either. I dealt with one large station group that was most willing to try in markets where its outlet was 3rd or 4th. Amazing that there still are protectionists in local media even as everything around them burns but there are (thus the push to paid content, I’d say).

  20. rdeichert

    Fred couldn’t agree more, the local sales force is powerful.But and there is a big BUT….Many times the LSF has been “optimized” by the great minds of new products.What does that mean? Well intending sales leadership or business development folks strike partnerships that seem optimized on a spreadsheet but that breakdown in the sales transaction that occurs between that LSF and their local customers.Another commenter mentioned that they’ve watched local sales people focus first on their own products before selling anything else. This is plain common sense. Many times LSF are highly commissioned based and pound the pavement, every dollar they sell is critical to their paycheck. Ask any seller if they are going to lead with selling something that’s new, unproven, smaller dollar value, and might result in them not closing the lion share of their main product.I my opinion the best way to leverage a LSF is by drafting. Drafting as in making sure whatever you want them to sell in addition to your product is easily pulled along by their flagship product. If you go with the NASCAR analogy at some point another product might be in the lead, but if you want that sales person to sell your product make sure they are in their place in the pack.Simplicity is also extremely important. My gut tells me that if a local advertiser is already advertising online themselves (without the help of the LSF) they are probably already more knowledgeable than a LSF who’s been trained. What this means is that the online products being sold need to be simple. Nothing like causing the brain to spin of a local advertiser with a complicated new concept when they are just trying to service their customers. It needs to be easy to add on.Once bitten…twice shy.Sure a terrible eighties song, but relevant as there have been fly by night companies who have “sold” local businesses SEO, etc etc. Mainly they just took their money. I can tell you many a conversations with local business people who told me, “oh I paid $300 to this company and nothing happened.” Maybe nothing should have happened, but if the customer isn’t walking away with something, that’s a burned customer. Someone bitter about that space.

    1. fredwilson

      RobThis is a great comment. I particularly like the idea of drafting

    2. Shane

      Perfect. I will definitely keep this comment in mind when I have the meeting with our local paper to talk about selling our online inventory. You are absolutely right about small businesses getting screwed by online “gurus” who are only out to make a scammy buck. I think that it really depends on how educated the LSF is about the new online product, and how they are able to communicate that to the advertiser. I guess we are lucky because we are already operating inside of a great niche, so I am confident about our prospects. LOL, I will be sure to report back to this thread with the results of our meeting early next week.

      1. rdeichert

        Shane there also seems to be the age old problem of inventory owners not valuing the value of access to the local advertisers. It’s a slipper slope when a publisher being repped starts to strike direct deals thinking of all the “extra profit” they’ll get cutting a rep firm out of the way. What’s forgotten is that building and running and effect local sales force isn’t a simple overnight endeavor.

        1. Shane

          Right, this is why we are going to be pitching a longer-term deal where our relationship with the sales force is preserved over a rather significant period of time. We are committed to sticking with them simply because we feel that the prospects of managing our own internal sales force is rather daunting and costly. I take it that you have experienced the problem you outlined above?

          1. rdeichert

            Good luck, make sure the incentives are properly aligned and the sale iseasy for the “middle”. Not the top 20% of the sales force, the middle 60%.

  21. woolies

    In my ‘real’ life, I am a media buyer. I buy commercial time on radio/tv/cable. What is happening is that the sales force at stations is being reduced. Contracts renegotiated. Just ask Clear Channel. Fragmentation of listening or viewing is resulting in fragmentation of reps. I’m just glad I work for a company that doesn’t believe in fragmenting it’s work force….

  22. ShanaC

    My post didn’t show up Yesterday 🙁 So I am I am going to have to really summarize.Super local businesses are defined by their technologies, their relationship management, and their skill levels.Advertising is only one piece of the puzzle. My “good” seamstress (I really needed a seamstress/tailor, it saves money long run), is not a computer person. She happens to be in Yelp. Really well reviewed in Yelp. I don’t think she notices. Her business model is mostly by referral, since most people are not into tailoring large amounts of clothing.It’s one of the reasons Content Driven non-advertising such as the DailyCandy work on a local level. You feel like you found something. The trick is, after this point, as Chris mentions, does the business have a model to make a customer stick. Advertising won’t make customers who find that your shirt pressing service sucks according to their definition of suck from leaving you. It’s definitely not an awareness thing that keeps me coming back to my seamstress. I know she is there. Same thing with my favorite coffee shop…

  23. steve

    what’s to stop an outsider like espn from raiding the sales staff in much the same way as they raided the dallas morning news’ sports dept only weeks prior to launching espndallas?can we agree that sales “feet” on the ground are not glued to their existing employer?

  24. pascalstolz

    Fascinating thread… Local media seems to “react” to the changing ways to engage with consumers without necessarily determining the true ROI of these activites before engaging. The increased urgency to embrace digital, the craze of “phone apps” has driven many broadcasters to release their “iPhone app” in a market (though exciting) that only represent 11% to 12% of the mobile subscriber base. Many have engaged in push SMS or interactive campaign, each time with a differnent vendor or provider… Rather than reinforcing their audience affinity they are fragmenting their reach and capabilities.The convergence of text, e-mail, mobile & push technology is opening up new frontiers to engage with their audience and deliver to them what their true assets are: content. More and more consumers will seek the content “they want” and pushed to them “where they want it” (email, text, web, social, etc.).Push is opening new doors to broadcasters and affording them the opportunity to compete in a market that used to be reserved to print pusblishers (newspaper, direct mail couponing). The engagement is moving from a one-message-to-many-subscribers (email newsletter for example) to a one-message-to-one-subscriber engagement (interactive text messaging, user requested content alerts, etc.). That one-to-one engagement is poised to open up new revenue channels for broadcasters in ways where they can leverage their local sales assets and participate in new revenue opportunities… Gordon Borrell (Borrell and Associates) makes the prediction that local email advertising will trump direct mail overtime. It may be sooner than he thinks when local media content centric organizations will deploy one-to-one push content engagement capabilities and make these messages ad supported via local advertising. Jiffy Lube will be much more likely to place a $10 off coupon inside a Gas Price alert (text message or email) sent to subscribers than the traditional Valpak mailing.Some local media are already on that path… check http://www.komonews.com/alerts or http://www.wave3.com/myalerts

    1. ShanaC

      To a point, things like this are great. I used to love getting text messages from the DailyCandy back when they still offered the service.At some point, even that is annoying. How much email/textmessages/other stuff do you want to recieve? How much is content driven veruses say purely advertising driven? Take DailyCandy Deals versus DailyCandy. Which is Which? And for those who are getting purely local versions of the DailyCandy (and I think deals as well, I get way too much email), how would you measure the metrics?

      1. pascalstolz

        Shana,This is exactly where the paradigm is shifting.The power of one-to-one is putting the users in control of the information they want to receive (what, when, where). The days of signing up for “services”, not understanding exaclty what you signed up to and getting “spammed” for things you don’t want or didn’t subscribe to are basically over. The “free web” has established that boundary of what “I want” versus “what I don’t want” and privacy rules have made it easier for consumers to un-tie themselves from a relationship they didn’t fully understand. As a result, those breaching the trust threshold will, overnight, lose that “trust” which will hardly be regained.In the new era of continuous “communication streams” will require filtering. The notion of steams being critical here… for example, in months to come, being it your Twitter “following” or “followers”, you will require filtering out what isn’t relevant so you can digest the amount of information to be consumed.Net net – power to the users. You control your profile, you control your information, you control what, where and when.

  25. ADstruc

    Hi Fred,Great post. It is great to see the focus on and appreciation for salesforces and their contribution to the bottom line. Unfortunately, sales teams are often times at a loss as a result of their own cottage industry (case in point with your mention of prior year monopolies). While many are well connected, they are still operating with an archaic distribution model – an inefficient system that misses opportunities.So USV has made previous investments in online and radio advertising, but are you targeting any other advertising segments? The reason I ask is because our startup, ADstruc, is building an online marketplace for outdoor advertising. Our platform will provide multiple benefits to sales teams, both locally and nationally, and with our new technology, will help break down the industry’s archaic model. We’d love to hear more about your perspective on the advertising industry and its new platforms as well as discuss our startup.Thanks,[email protected]

    1. fredwilson

      JohnWe haven’t spent any time on outdoor but it does seem like with digital signage taking off, there are big opportunities in outdoor

      1. ADstruc

        Fred – your response time is always impressive!Digital is surely taking off but it still remains a very small category within the entire outdoor segment (billboards, street furniture, etc.) There are a few digital platforms currently in market, but they are only digital. ADstruc will encompass all categories – truly being the first to provide a marketplace for ALL outdoor advertising. We expect to have our beta in the next two months and would love to show you!Have a good night!

  26. William Mougayar

    There’s a great example of a local Yellow Pages co. who has introduced a real-time local search site http://www.calgary.com – a hybrid of Twitter & directory on all types of local Calgary activities (merchant reviews, local news, advertiser activities, classified ads, municipal news, “tweets” from Calgary, etc.). So this is an example of an “old media” who didn’t have to re-sell someone else’s inventory- rather innovated and jumped in.

  27. BmoreWire

    I couldn’t agree with this more. Connecting the technology with the salesforces and providing segmentation for these local salesforce assets as well as data and control of their media assets will be big opportunity in coming years. What Scott Ferber and Dave Morgan did to the display marketplace they are doing again to TV and it will be the next big exits in the startup world.

  28. disqus_L0EMFF6ctL

    I agree with many of the points in here about the value of the feet on the street force as well as the challenge of training an old school local ad salesman on digital stuff. Know about the latter all too well.One area of the post that I would challenge is the assertion that local media companies don’t have strength in local content anymore. In the context of newsrooms being scaled back, that makes sense. But I think local media companies are always going to own local content – it’s just going to be collected and published in a different way. Perhaps more in the form of blog network or something like that, not newsprint and reporters. For me, its more a matter of the form of the content changing for local media companies, not them losing strength in that area.

    1. fredwilson

      I think they (local media) can be a great distributor of local content but maybe not such a good creator going forward

    2. fredwilson

      I think they (local media) can be a great distributor of local content but maybe not such a good creator going forward

  29. joeagliozzo

    Seems like a natural way to go after this business would be to buy smaller “coupon book” companies that are local and print say 4 times a year. They have long term relationships with advertisers, and you can easily upsell (because it’s free the first time) a lead based online coupon system, where the coupons get redeemed at the advertiser’s business (closing the loop). In subsequent editions, you can slowly build the business case for the value add of the online leads (by showing past quarters results) and start charging for them. Also, by aggregating a number of guides in different areas, you start building a salesforce that, you guessed it – can now be offered to all these other online properties that want to sell ad inventory. Since your salespeople are now the “trusted advisors” for online ad/lead purchases, you are now in a VERY high value position and since there are way more ad opportunities that advertisers, you probably make most of the money.

  30. The Daily Reviewer

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  31. Shane

    Just thought I should report back to the thread. I had a meeting with a local magazine ad sales manager who was more than happy to jump on board with the idea of selling our digital inventory. The sell was seamless, and it seems that the sales manager that I met with really understood the value of digital advertising, and was very excited about pitching it to the advertisers. Now, we will ramp! 😉

    1. fredwilson

      Awesome news