The digital transition: Opportunity knocks


Borrell cited data from his company’s recently-released report, “The digital transition: Opportunity knocks,” which polled 3,100 local websites and 195 local television websites. In 2007 local TV web revenues totaled 772 million dollars. In 2008, that number is expected to hit 1.119 billion; 1.410 billion in 2009 and 1.593 in 2010.
Local ad spend on all local websites has jumped considerably—from 2.7 billion in 2004 to 7.6 billion last year. Broadcast TV had 9.5% of that share in 2007, up 7.6% just three years before. Newspaper shares were down considerably.

Borrell noted a few common threads for the best-producing local sites and their management:

1. Online only sales staff

2. Non-traditional customer base

3. An amazing thirst for data on ad spend info in the marketplace

4. A consultative sales strategy (ask about what they need first then call back with a solution)

5. Lots of sales training and re-training

Perry Sook said his strategy for local websites is they are not branded to the TV stations: “We develop community portals—shopping mall style where they are a supermarket with hundreds of isles of interest.”

The TV stations do, however, drive traffic to the localized sites. Nexstar is doing well with the strategy, pulling in 200,000 in revenue in Q1 last year, but a whopping 2.3 million in Q4. They trains and commission the website staff separately, as well.

Since they are in “the advertising services business,” Sook says they look at the TV stations and websites completely separately, so much so that they have teams that go out to small towns and pitch top potential advertisers to get in the ground level with a new local community site. Sook places a lot of emphasis on the online side—25% of management’s bonus comp is based on online.

Wallace said new media platforms should represent convenience. They recently bought LX TV, which provides content to the local NBC station sites, rather than having the local news staff be taxed with the extra burden. NBC is also working on a beta site, “Dig Philly,” which is lifestyle- and local events-oriented. If it takes off, it will be rolled out to other markets, as it is scalable.

He also noted that at this point regarding their local websites, broadcasters should “dive into this, not dabble” anymore.

Looking forward, Wallace says custom, user-specific video is on the horizon, possibly as VOD. Sook says their streaming is currently VOD only and not a core strategy, but he imagines user-generated video being added like high school bands and gardening tips.