Other shoppers remain in business, such as American Classifieds (Thrifty Nickel) and many locally or regionally-owned Pennysavers. The name “Pennysaver” goes back to the 18th Century, and is not exclusive.

Our guess is that OpenGate didn’t see a clear path to profitability and decided to simply pull the plug (apparently, without paying final wages.) Core advertisers and consumers have many alternative options on Craigslist and other sources, and OpenGate didn’t seem to have a plan that would have upgraded Pennysaver to a hyperlocal, searchable and mobile-oriented model. That’s where things need to go.

We look across the aisle, for instance, to Cox Target Media’s Valpak, a coupons and advertising business. It has thrived on a hyperlocal publishing strategy, and has developed a robust digital strategy. Valpak has just announced a great Apple Watch app. But PennySaver wasn’t going there.

Theoretically, we still find Shoppers an appealing alternative sales channel. They are generally 100 percent commission, and many products could theoretically be added to their bundle (Google, et al). WebVisible, at one time, teamed up with American Classifieds to pursue such a model. PennySaver, itself, teamed up with Antengo, a mobile classifieds service. But that was discontinued when OpenGate came on board.

The post GoodBye Pennysaver: Is There Life Left in Shopper Publications? appeared first on BIA/Kelsey - Local Media Watch.

Today’s announcement that UT San Diego and its eight regional publications will be acquired by Tribune Publishing’s Los Angeles Times for a slightly better-than-fire sale price of $85 million (plus $100 million in pension liabilities) points to several things.

1. The price is probably a flat fee for the brand and expectations of selling regional advertising throughout southern California.
2. Individual components such as subscriber counts include a certain number of online subscribers. But there aren’t many online-only subs in this case.
3. UT San Diego’s various online and mobile services really aren’t factored in.

The U-T reported Sunday circulation of 271,564 for 1Q, 2015. On other days, circulation ranged between 169,484-222,479. The LA Times reported Sunday circulation of 965,598 and average weekday circulation of 650,718 for the six months that ended Sept. 30.

The LA Times will be able to save some costs with the acquisition by cutting circulation, printing, sales and perhaps, content costs. It will also more effectively sell regional accounts to large advertisers, specifically retailers, auto makers and auto dealers and medical. But in the end, online (or mobile) won’t be much of a factor.

That’s a shame. Back in 2002-2004, a former colleague of mine developed a general hypothesis that if a traditional media property could show recurring value in online properties, it would be able to boost its sale price by X percent — probably 20 percent or more. It was a major reason to double down on digital growth. But this clearly hasn’t happened.

I was chatting about this with BIA/Kelsey Senior Vice President and Chief Economist Mark Fratrik. He notes that online revenues accounted for 16.4 percent of newspaper revenue in 2014, and will be 17.9 percent in 2015. The forecast is for online revenues to grow slightly to 22.9 percent by 2019. This reflects some additional online revenue, but as he points out, it also reflects BIA/Kelsey’s expectations that print revenues will decline.

It is true that online could add value to traditional value property in some cases, says Fratrik. But San Diego is full of online competition from TV station sites, alternative sites and news start-ups.

The Times of San Diego, for instance, now reaches 150,000 unique users a month. Publisher Chris Jennewein — a former leader of UT San Diego’s digital operations — notes that 26 percent of his readers are aged 25-34 and seventy-five percent are under 55. “Our readers probably didn’t read either of the two newspapers to begin with,” he told me this morning via email.

For me, it is a sad situation. I lived in San Diego for 11 years, and occasionally did consulting projects for the newspaper. UT San Diego always had innovative online projects going on, and several strong leaders at the digital helm. It got deeply involved in email marketing services, online directories, Spanish language media, hyperlocal editions, premium iPad editions, video services, mobile headlines, entertainment publications, prepaid deals and loyalty services. But in the end, none of it seemed to matter very much.

The post UT San Diego Sale: Online Isn't Adding Value to Traditional Media Sale Prices appeared first on BIA/Kelsey - Local Media Watch.

Interestingly, traditional local media has a disproportionate share of 2015 spending (87.2 percent). Yet, the online/digital local will grow substantially in the next few years, reaching 20 percent by 2019. This online/digital will be with pure plays, as well as the traditional media that have expanded their services and see the opportunities with this group of advertisers. These health care providers will be extremely interested in greater integration of digital marketing services.

More information on this vertical advertising spending is now available in the recently released report, Insights in Local Advertising – Health Care Vertical, which examines traditional and digital spending trends, profiles the market ad share by media, and details the advertising trends of small and medium-sized businesses (SMBs).

To read the executive summary of this report, just click on “Insights in Local Advertising – Health Care Vertical.“

The post Health Care Vertical – Important to Understand for All Local Media appeared first on BIA/Kelsey - Local Media Watch.

Traditional media companies struggle to find the right formula for digital sales. The challenge isn’t really about deciding whether to go with a pure digital only approach v. relying completely on existing legacy sales resources. The decision matrix is much more complex than this binary choice. Publishers need to use their existing sales assets to grow digital revenue. Failing to do so simply isn’t practical for most companies. But publishers also need to bring in more digital expertise and make many important strategic decisions about sales structure.

A new BIA/Kelsey Insight Paper, “Old House vs. New House: Building Optimal Digital Sales Teams,” xamines the challenges involved in building digital teams and finding the optimal sales structure. The report is co-authored by me and Stacey Sedbrook, BIA/Kelsey’s VP of Strategic Sales Consulting, and is the first of several sales-related Insight Papers we will co-author this year.

The report’s executive summary is below and BIA/Kelsey clients can read the full paper by logging into the client portal. The report is also available for purchase.

Traditional media companies struggle with how to build optimal digital sales organizations. The conversation often comes down to a binary choice: should a media organization rely on a digital-only sales force or a multimedia one?

The truth is, it isn’t “either-or.” It’s both. Legacy media companies need to look at segmentation by product, giving legacy sellers inventory that they can easily sell (hint: this tends toward products that are owned and operated by the media company), and leaving more complex and higher value digital sales to digital specialists.

BIA/Kelsey did an analysis using real performance data from a range of local media companies struggling with this sales structure challenge. The message that emerged from this exercise was clear. Yes, digital-only sellers will leave legacy sellers in their dust on a one-to-one comparison. Legacy sellers, however, represent more sales volume and should be a key component in moving organizations from majority legacy revenue to majority digital.

There is a strong body of opinion that legacy sellers are minimally useful in the shift to digital.

“If you are a traditional media company, and you take 20 of your legacy sales reps, maybe one or two will become performers over time,” one senior traditional media sales executive recently told us. “The best approach is to create a separate digital channel, treated as a stand-alone and managed by someone who can work with the core channel. Then use your core channel as a lead source for digital sellers.”

Our experience and analysis show that with the right product segmentation, digital sellers and legacy sellers can complement each other and lead to a better overall outcome than in a digital-only structure.

Traditional media companies need to think more strategically about how to drive digital revenue. While digital specialization is ideal, the investment required to build a digital-only sales force in short order that can drive sufficient sales volume is too high for most traditional media organizations. Therefore legacy sellers will need to play a big role in digital selling, at least in the near term.

Traditional media companies that focus on sales reporting structure, compensation and smart packaging as part of their digital transformation will put themselves in the best position for sustainable success. This Insight Paper examines the arguments for specialization and for using a hybrid approach to digital selling.

The post Building Optimal Digital Sales Teams: A New BIA/Kelsey Insight Paper appeared first on BIA/Kelsey - Local Media Watch.

Home and Trade Services SMBs report their most popular channels to use are from traditional media: newspapers, print yellow pages and direct mail. Digital is also part of the Top 5 most used with Facebook pages and a website rounding it out. Given the vertical’s heavy reliance on traditional media, there’s an opportunity for traditional media players to bundle digital media to their offerings.

Home and Trade Services is the only vertical industry in our study with print yellow pages among the Top 5 media used for advertising and promotion, and was only in the Top 10 of one other vertical — Professional Services. Print yellow pages also had the highest return on investment (ROI) of the top three traditional media — with nearly 28% saying that their ROI on print yellow pages was either excellent (10-19x) or extraordinary (over 20x) spend.

SMBs in the Home and Trade Vertical had an average annual advertising spend of $12,573 in Wave 18 (Q3/2014), down from $19,238 in the previous wave (Q3/2013). Home and Trade Service SMBs overall will not increase their ad budget in 2015. Nearly 61% of the SMBs in the Home and Trade Services vertical reported that they would maintain their ad spend over the next 12 months and 20.8% say they will increase. While SMBs in the Home and Trade Services utilize traditional media, their budget allocation for digital is increasing. On average, SMBs in the Home and Trade Services vertical allocated 24.7% of their advertising budget to digital in the last 12 months. Over the next 12 months, they report plans to increase it to 27.7%.

Local media players, especially in the traditional channels, have an opportunity to continue to serve their Home and Trade Services SMBs through traditional channels as well as grabbing more of their ad dollars by offering digital products.

Clients of the BIA/Kelsey Advisory Services can find the full Home and Trade Services vertical report here. Interested in finding out more about our LCM survey? Click here.

The post Home and Trade Services SMBs Heavily Use Newspapers and Yellow Pages in Their Ad Mix appeared first on BIA/Kelsey - Local Media Watch.

When a traditional media executive visits Google, Facebook and other tech leaders, there is always a lot of oohing and ahhing and a bit of envy.

You can’t help but notice the great perks, such as free dry cleaning and gourmet food. Add to that their relative transparency; open seating that bust out the cubicles; first name relationships with the executive team; grand vision statements that go beyond profit; the distribution of company equity; and their trust in employees.

But these tech perks have been around now for years (and copied.) What are the real revelations that traditional media company executives can gain from a tour of tech leaders, circa 2014? That’s the question posed by The Local Media Association’s Fifth “Innovation Mission,” a six day, multi-city adventure that included on site briefings at tech and media leaders such as Google, eBay, LinkedIn, The New York Times, Buzzfeed, CBS Local, Gatehouse Media, Automattic, RussMedia and others

BIA/Kelsey spoke on last year’s tour, and we have been eager to see the report from this year’s edition. Here’s the summary: The new wave is all about sharing media; the widespread use of mobile has given rise to omnichannel publishing; and the next wave of internal communications and news gathering is quickly moving from email to messaging.

The tour’s focus on shareable media especially caught our attention. BuzzFeed – which gets 23 million of its 57 million daily views from shared posts –goes so far as to say that share data has become “the most important metric.” The report says this about Buzzfeed: “As ideas surface, they ask themselves: ‘would you share this with your friends?’ For Buzzfeed, share data is seen as a stronger indicator of audience engagement than HuffPo-like “click bait” that fools you into checking out an article, but doesn’t ultimately engage you.

What drives sharing? For BuzzFeed, the biggest driver of shared media has been YouTube; but Pinterest is #2 – much more impactful than live media such as Twitter. Facebook is also a big driver, although its impact is not immediate: it takes several days to build.

Is Buzzfeed’s relentless focus on shared media an apples-to-apples “best practice” for traditional media companies? Probably not. After all, it says its real focus is grabbing people who are “bored in line, bored at work and bored at home.” (One of its biggest traffic drivers is Miley Cyrus.) Still, as mobile’s share of media usage gains, and “boredom breaks” pre-dominate, there are definite lessons in studying its model.

The LMA Innovation Mission Report can be purchased here.

The post The 2014 LMA Innovation Mission: What Tech Leaders Can Teach Traditional Media appeared first on BIA/Kelsey - Local Media Watch.

No one media organization has completely solved the challenge of traditional to digital sales transformation — but there is an emerging set of common traits and best practices. On Tuesday, we presented some of these elements on a Local Media Association webinar, “Taming the Local Sales Machine.”

The webinar presentation was based on a talk Jed Williams and I gave in February at the Key Executives Mega-Conference in Las Vegas. The conference was a joint effort of the LMA and the Inland Press Association.

To prepare, Jed and I spoke with several local sellers, including newspapers (given the audience) and pure plays, to find out what was working and not working in local sales transformation.

The result was a set of “Common Traits of Successful Sellers” spelled out in the image below. These traits are not all present in all successful sellers, but most of those getting traction in the local marketplace share most of these traits. If we were to pick one that was an absolute requirement it would be “Leadership Commits.” Without this, transformation efforts are dead in the water.

The webinar also shared a few “Actionable Ideas for Sales Transformation” that we picked up in the course of our interviews. These include methods for enforcing accountability, using data to drive sales efficiency and using sales prep platforms to convince buyers they need to keep pace with their competition. We will summarize all of these findings in a Briefing for BIA/Kelsey clients.

Those who missed the webinar can access a replay on the LMA archive.

The post Webinar Recap: Taming the Local Sales Machine appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey senior analysts Peter Krasilovsky and Abid Chaudhry batted around these two hot topics today on the latest in our ongoing Analyst Roundtable series.

“Newspapers need money,” Krasilovsky said, answering the basic questions of why Classified Ventures (a consortium of five newspaper groups) would sell the No. 2 auto site.

Krasilovsky then posed the bigger question, “Who would buy this property?” The property could potentially be sold from anywhere from $2.8 billion to $3.6 billion — a level accessible only to the biggest media and technology players. Peter suggested Gannett and Google could be potential buyers, with Autotrader, the No. 1 player, being a potential dark horse.

Next, Chaudhry shared his insights on the recent Yahoo-Yelp partnership.

“This is a pretty big development,” Chaudhry said. “It provides more fuel to the fire to all the speculation that Marissa Mayer and her intentions to rebuild Yahoo’s search engine business.”

The big question is how will Yahoo compete with Google? Chaudhry doesn’t see Yahoo taking Google on directly. Instead, he expects Yahoo to carve out a niche for itself in the mobile search market. He highlighted Yahoo’s efforts to incorporate more native and streaming advertising from Yahoo’s Gemini platform.

Click on this video to enjoy today’s Analyst Roundtable in its entirety.

The post Analyst Roundtable: A Week in Review appeared first on BIA/Kelsey - Local Media Watch.

The case for local traditional media companies to transform their sales organizations is pretty clear. For years, BIA/Kelsey has been tracking the secular shift from traditional to digital spend through both its Local Media Forecast and Local Commerce Monitor™. The path to genuine transformation is more challenging, fraught with cultural roadblocks, resource constraints and execution challenge piled upon execution challenge.

There are no clear winners yet among traditional sellers making the digital shift. However, best practices are emerging around recruitment and training, incentives, technology and data, and sales methodology. We’ve been out there talking to sellers to unearth these best practices.

This morning, my BIA/Kelsey colleague Jed Williams and I offered the Why and the How of sales transformation to cap of the “Key Executives Mega-Conference” here in Las Vegas. The show is a joint effort of Inland Press and the Local Media Association attended largely by senior newspaper executives.

Williams made the “Why” case with data. For example, BIA/Kelsey has been observing a long-running shift among all local advertisers and newspaper advertisers in particular from spend on traditional advertising to presence and platform services. Increasingly, what local SMBs want to buy is outside the comfort zone of many traditional sellers.

To illustrate the “How” I summarized the key characteristics of successful digital sellers, based on interviews conducted in recent weeks with both traditional sellers getting traditional in digital sales and pure plays that exemplify how to sell digital only products to SMBs, usually through an exclusively inside sales channel.

We boiled it down to five common success traits. There are others for sure, but these five were pretty consistent among the progressive digital sellers we’ve been interviewing.

Leadership Commits — Beyond Lip Service. This notion is widely acknowledged, but perhaps not widely understood. True commitment takes many forms, including investing personal energy in acquiring expert level knowledge; investing in people and technology; and making tough decisions, about products and people.

They Don’t Let Underperformers Stick Around. Committed digital sellers do not allow legacy reps to default to their comfort zone. The insist that they adapt or leave. Having a systematic process for identifying and “transitioning” underperformers is a critical success factor.

They Gather Data — And Listen to What it Tells Them. Data-driven sales is one of the meta-trends in sales transformation. Extensive data and sophisticated analytics can help sales organizations become vastly more efficient and quickly move past people, products and processes that just aren’t working.

They Use Robust Tools. Local digital sellers almost universally arm their local sellers with robust technology, for CRM, sales prep, and building custom presentations on the fly. A transformed sale organization.

The Measure What Matters. Successful sellers understand the KPIs that drive results, and they manage against these. Measuring the behavior that drives results can be more effective than measuring the results themselves.

BIA/Kelsey will summarize its latest findings around sales best practices in an upcoming report.

The post The Sales Transformation Playbook appeared first on BIA/Kelsey - Local Media Watch.

Of the different media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, only two of the traditional media crack SMB’s top 10 most used media for advertising and promotion: newspapers and direct mail. The rest of the top 10 are filled with digital media.

In the chart below, I looked at eight of the traditional media from LCM. Newspapers and direct mail, the only two of the traditional media to crack the Top 10 most used media list, fall first and second among traditional media. Radio comes in third, with TV and outdoor bringing up the rear for usage.

But how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on traditional media? The traditional media with the highest usage, newspapers, had the lowest perceived ROI, while the ones with lower usage: TV, cable and outdoor, had the highest ROI among the traditional media.

TV had the highest perceived ROI among the traditional media, with 50% of SMBs rating it as either excellent (10-19 times return on that investment) or extraordinary (over 20 times the return), while only 13.7% of SMBs surveyed reporting using TV to advertise or promote their business.

Newspapers, which had the highest usage among the traditional media, had the lowest perceived ROI, with 26% of SMBs reporting returns as excellent or extraordinary.

Radio had the third highest usage among SMBs for advertising/promotion. But advertisers who used radio as part of their advertising mix reported being pleased with the results, as 36% rated the perceived ROI of radio advertising as either excellent or extraordinary.

For the first time in several survey waves, SMBs indicated that they are actually decreasing the number of media used to advertise or promote their business. The implication: media must deliver concrete ROI or risk losing business traction. Digital media penetration with SMBs has increased, as many of these solutions generate concrete leads and offer trackable ROI metrics.

Traditional media are far from obsolete, however, as the data suggests, and many are still well-regarded. However, for newspapers in particular, and all traditional media, as SMBs enjoy more digital options and demand clear value from their advertising spend, the need to produce clear ROI is stronger than ever.

More information about LCM and custom renderings of the data can be found here.

The post Traditional Media Isn’t Dead Yet, Despite Increased Competition from Digital Media appeared first on BIA/Kelsey - Local Media Watch.