digital agencies: roundtable 2014 bruce kyse
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DIGITAL AGENCY: A NEW
REVENUE STREAM FOR
NEWSPAPERS
Enhance relationships
by filling a client need
CLOSE LOOK AT DIGITAL SERVICES
Why digital services are more important
than ever for newspapers
A few lessons learned in Santa Rosa
Rapid evolution of newspaper agencies
The challenge: Building a successful
business model
... THEY’RE ALL TRYING TO REACH DIGITALLY CONNECTED CONSUMERS
27 million SMBs in U.S. share one thing in common
… THEIR CLIENTS ARE
MOVING TO DIGITAL
25,000 local media companies
in the U.S.
1,350 daily newspapers* 4,700 non-daily newspapers* 1,700 local TV stations* 13,000 local radio stations* 4,000+ direct mail & directories
share one thing in common
*BIA Kelsey / NAA
Local Digital Projected to be
$52.7 Billion by 2018
BIA/Kelsey, May 2014
2013-2018 CAGRs
Total Media 3.6%
Traditional Media 0.1%
Online/Digital 13.6%
PRINT AD $$ DROPPING 7-9% ANNUALLY
Newspaper Association of America, April 2014
DIGITAL AD GROWTH STAGNATING
DIGITAL IS A MOVING TARGET…
Mobile traffic surpasses desktop
More 40% of adults own a tablet
SEO shifts from keywords to content
relevance and Social Engagement
Native Ad revenue will double by 2017
Not to mention… DSP’s / contextual targeting
/ retargeting / mobile in-store optimization /
SMS / email marketing / video advertising.
MEDIA / AD CLIENT ECOSYSTEM HAS CHANGED LOCAL DIGITAL AGENCIES GROWING, PROVIDE LINKS TO PURE PLAYS
SEO
Specialists
Lead
Generation
Traditional
Media
Ads
Website
offers
Mobile
Presence
Social
Media
Paid
Search
Ad
Targeting
Newspaper
… AND COMPETITION IS HEATING UP
FROM SOME FAMILIAR PLACES
“Local TV broadcasters shifted into high gear
with digital … driving an all-time high of nearly
$3 billion in new ad revenue.” (TBA)
Broadcast grew digital 15% vs 1.5% for
newspapers
While banners/video were 82% of digital,
broadcast is now selling SEO, reputation,
websites, ad retargeting and email list
management.
Television Bureau of Advertising/ Borrell Assoc.
SMB SURVEY: HOW OFTEN ARE YOU CONTACTED BY
AN INTERNET MARKETING OR SEO COMPANY?
32%
25%
18%
11% 11%
2% 0%
5%
10%
15%
20%
25%
30%
35%
Everyday
2-3X aweek
Everyweek
Rarely EveryMonth
Never
BrightLocal / ChamberOfCommerce.com
75% said they are contacted at least once a week!
LET’S START WITH A DEFINITION
Newspaper Digital Agencies act as online
marketers for local businesses – helping
them with everything from Search Engine
Optimization to building web and mobile
sites, from utilizing social media to ad
retargeting.
PEW RESEARCH 2013
OPPORTUNITIES FOR IN-HOUSE AGENCY
Create new revenue channels
Provide services to new market segments
Retrieve dollars from “pure plays” & local agencies
Drive additional print ad revenue
Support newspaper’s digital newsroom initiatives
....and, most importantly,
Enhance relationship with existing clients
IF YOU USE/WERE TO USE AN INTERNET CONSULTANT,
WHICH OF THESE FACTORS ARE MOST IMPORTANT?
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
BrightLocal / ChamberOfCommerce.com
HOW DOES A NEWSPAPER GAIN ENTRY INTO AGENCY SPACE?
Newspaper has unique,
powerful set of attributes
Reputation / brand identity
2 decades running websites
Unequaled “content” skills
Digital marketing expertise
Large print & digital portfolio
Sales & tech infrastructure
Extensive customer service
experience
AGENCY PUTS NEWSPAPER AT CENTER OF MARKETING ECOSYSTEM
SEO
Services
Lead
Generation
Traditional
Media
Ads
Website
offers
Mobile
Presence
Social
Media
Paid
Search
Ad
Targeting
Newspaper
Agency on
behalf of
client
CASE STUDY:
THE SANTA ROSA
EXPERIMENT
SANTA ROSA’S IN-HOUSE AGENCY
In 2008, PD hired local group for website
development, SEO and paid search
Sudden growth of digital agencies in market
Advertisers talk more about reaching customers
online / partner with “pure play” providers
Partner agency exploited relationship with clients
Secured NYT investment for full-service agency
Threw ourselves into the pool!
IN SUMMER 2011, PD LAUNCHES NEW
AGENCY WITH THESE GOALS ….
Create a unique value proposition
Build digital business plans for clients
Capture new revenue AND profitability
Balance staff vs. outsourced services
Establish benchmarks, metrics & tracking
Create client ROI on digital investment
Packages, pricing that produce customer value
Target right clients – $2M to $20M in revenue
56,000-circ daily’s start-up investment
Set up Agency as separate department
Remodeled office with hi-res monitors & demo rooms
5 new employees, 3 transferred from other depts.
Outsourced selected services: designers, freelancers, PPC
New compensation plan
PACKAGED PLANS,
PLUS CUSTOM
Support for sales:
Templates for
proposals/contracts
4-level training for
digital specialists &
sales team
Target SMBs for best
bet for new revenue
Full range of packages
with set pricing &
services
PDmediaLAB Home of the North Bay’s Premier Interactive Media Lab PART OF THE PRESS DEMOCRAT MEDIA COMPANY
WEB DEVELOPMENT PACKAGES
PDmed iaLAB Home of the North Bay’s Premier Interactive Media Lab PART OF THE PRESS DEMOCRAT MEDIA COMPANY
SEORates_2012_020612
CLIENTS WANT A PLAN, NOT A SALES PITCH
Fill business need for
client, not just sell
advertising
Digital Specialists are
critical players
Digital Specialists don’t
sell products:
Identify client’s needs
Create digital plan
Help define success,
metrics & benchmarks
ONE AGENCY’S
PROOF OF CONCEPT*
At end of first year:
63 clients signed to annual
contracts
$600K in contract revenue
$350K in new print-online ads
$780/month average spend
Average increased in year 2
Profitable after 10 months
Renewal rate in excess of 70%
*PEW Research 2013
MOST CHALLENGING COMPONENTS …
Keeping focus on sales leads, pipeline management
Close ratio was higher than 50% in year one, but diminished without new products & targeted prospects
Keeping “customers” on schedule
Avoiding expense creep with small businesses
New product development
Aligning customer expectations with realities of digital marketing
THAT WAS THEN, THIS IS NOW …
Digital revenue opportunities are
so large and culturally differentiated from the
norm that they require an "all in approach" –
sometimes with separate teams and additional
staff.
- Local Media Insider/Borrell 2013
THE BUSINESS LANDSCAPE HAS CHANGED
Competition grows:
YP, ReachLocal,
Radio, Broadcast
White-label:
fulfillment, sales and
training designed for
media partners
New industry brands:
LocalEdge (Hearst)
G/O Digital (Gannett)
Propel (Gatehouse)
Local Solutions (Cox)
508 Digital (Belo)
BUILDING A
SUSTAINABLE
BUSINESS MODEL
With more competition and digital
options, how will newspapers stay
competitive in agency space?
Papers starting agencies
Investment vs. organic growth
One sales team or two?
In-house vs. outsourced services?
Low-end or premium provider?
Papers with established agencies
Customer service vs. process efficiency
New product development
Acquiring digital talent
Grow market strength and revenue
KEY DECISIONS AND CHALLENGES FOR FOR A
SUCCESSFUL NEWSPAPER AGENCY
COMPOSITE CASE STUDY
1. Management wants to launch agency, but unsure
print reps are ready to sell
2. Paper creates separate team of digital reps, give
print reps 1x referral bonus to provide leads
3. Traditional reps fear loss of print $, so play
minimally or not at all.
4. No consequences if rep is hitting print goal
5. Even managers (not properly goaled) are
distracted by shifting priorities, special sections
and effort marginalized.
MEANWHILE, IN THE DIGITAL ROOM…
6. Digital reps are on their own – cold calling like
other digital sales team in & out of market
7. Most customers are SMBs who don’t buy print,
while established clients with digital needs go
someplace else
8. Newspaper’s key assets – relationships and trust
– go untapped.
9. Faced with revenue pressures, digital reps given
90 days to hit goals – leading to churn
10.Best digital reps won’t even go near newspapers
… SOLUTION REQUIRES UPGRADES
Adjust sales structure, comp, Rules of Engagement
that incent digital growth … w/o print loss
Needs Analysis of ALL accounts in first 90 days.
Specialist meets monthly with each rep, identifies
existing accounts that represent qualified leads.
Every rep has active target list, updated as prospects
move thru the pipeline
Sale Managers given Digital Revenue goals!!!!
Hire digital reps as revenue grows, including some
focused on new digital business and prospects outside
your immediate market.
GETTING THE FORMULA RIGHT
Option #1 – Train & incent
all reps to sell digital
Option #2 – Make sure
comp plans for print &
digital reps are in sync
At least 1 digital sales
specialist for 5-6 reps
One account manager for
every 50 agency clients
Referral bonuses don't work
Print reps get individual &
team digital services goal
Portion of total payout is
based on digital sales.
Pay digital specialist salary +
commission on entire team
digital performance
Pay them to sell + coach
team on how to sell digital
Structure Compensation
… THE PUSH FOR MARKETING SERVICES
AND CONTENT MARKETING NEEDS TO MOVE
FROM EXPERIMENTAL TO FULL THROTTLE.
EASY TO SAY, HARD TO DO.
KEN DOCTOR, AUG 2014
BRUCE KYSE
GUARANTEE DIGITAL
BRUCE@GUARANTEEDIGITAL.COM
707-239-0218
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