Newspapers court local retailers with Web 2.0 panache
With newspaper print pages shrinking, publishers are chasing online ad dollars from local retailers.
In Summary:
| • | Local newspapers are desperate to keep hold of local retailer advertising dollars. |
| • | New portfolios of online advertising products, some based on Web 2.0 technologies, allow retailers to get closer to their customers. |
| • | To get the most bang for the advertising buck, retailers should use automated software to measure their success. |
In the face of declining print pages and search engine competition for advertising dollars, newspaper publishers are trying to convince local retailers that their limited marketing budgets are best spent with local media sites.
Around the U.S., print publications are shrinking, disrupting both advertising and editorial departments. "Newspapers are cutting back on space and staff. They are focusing more on syndicated content than unique content," says Peter Krasilovsky, program director for The Kelsey Group consultancy in Princeton, New Jersey.
He says drastic cutbacks in print are forcing publishers to fight for online dollars that might otherwise go to search engines such as AOL, Google, MSN, and Yahoo! A 2006 Nielsen/NetRatings and WebVisible study found that 70 percent of Internet users reported using search engines to find a local service.
And local retailers are taking notice and planning to boost their online ad spend significantly in the next few years. According to eMarketer's "Local Online Advertising: Measuring the Market" report, released in September 2007, local online advertising spending in the U.S. is set to grow from US$2.9 billion this year to US$7.8 billion in 2011. Patricia Lee Smith, vice president of new media at The Seattle Times Co., says that publishers are ready to go all out to get their share of this money, adding that we'll see a lot of innovation from newspaper companies in the coming years.
"We know that connecting local buyers and advertisers is important and what we bring to the table that Google and Yahoo! can't is the local voice. Newspapers can provide a local lens and local context that is unmatched," says Smith. She says local retailers will see newspapers pulling out all the stops, including rolling out portfolios of advertising products based on Web 2.0 technologies, such as blogging, to lure them online.
But tracking new media effectiveness requires new tools. Michael Griffiths, senior product manager for Microsoft Dynamics Retail, advises retailers to put automated customer relationship management (CRM) and supply chain software in place now so they can measure the effectiveness of these mixed-media campaigns before committing their whole budget.
Rising up
The Seattle Times Co., which operates sites such as nwsource.com, nwjobs.com, nwautos.com, seattletimes.com and seattlep-i.com, plans to unleash a multipronged approach to match users with advertisers based on context, behavior, and geography by next year. Smith says a blend of Web 2.0 technologies such as RSS feeds, microsites, targeted search, and blogging will all play a part in the company's new hyperlocal, or neighborhood, approach.
"Today we align advertisers and buyers via topics. In the next generation of our Web sites, we'll connect them based on who they are and what they care about at that point in time. We'll consider all the dimensions of their lives," she says.
Krasilovsky says he's seeing similar initiatives from newspapers around the country. For instance, Gannett Co.'s Indianapolis Star Media Group in Indiana has a vertical site for mothers, Indymoms.com, that is a mix of media content and user-driven content, such as product reviews and helpful tips. "It's uniquely local so it's easy to sell advertising around," he says.
Rick Hutton, vice president of content services at MetaCarta Inc., in Cambridge, Massachusetts, says retailers are looking for very targeted opportunities to reach consumers. For example, MetaCarta Local Alerts is a service that lets newspapers push digital content and advertising to readers' e-mail inboxes based on their pre-set geographic preferences, such as the neighborhood where they live or work. MetaCarta, which is being used by the San Antonio (Texas) Express-News site mysanantonio.com, is based on natural-language processing technology that can automatically read through text to find, extract, and send information directly to users. Hutton says that because subscribers specify their preferences, it's a great way for local retailers to zero in on prospective customers.
Making sense of measurements
But Krasilovsky warns that for newspapers to strike gold online, they have to work closely with local retailers—and maybe take some initiative in explaining the potential value of Web advertising. "Advertisers really respect print and they love it when the print edition comes out. It establishes value they can understand," he says. Many are not quite so confident about the power of Web advertising. "The typical local retailer doesn't want to get into the science of keywords or bid ranking or search optimization. They don't care if they're ranked number one on Google," he says.
On the flip side, he says newspapers often do a poor job of sharing data with their advertisers and have been shy to embrace Web-based analytics tools.
To gain insight into the success of marketing campaigns, says Microsoft's Griffiths, retailers should rely on their own automated tools to track in real time the results of their online, e-mail, and direct mail marketing efforts. With this information, they can decide to expand a campaign or redirect their marketing dollars. "In the past, with manual processes, you had to wait to see the effects of your advertising campaigns," he says. For instance, each store manager would tally up coupons at the end of each day or week and then send that information to headquarters to be entered into a spreadsheet. By that time, a company might have spent several thousands of dollars on a failing marketing campaign. "It's not just about offering creative ways to reach customers; it's about making sure you can understand how successful those approaches are," says Griffiths.
 | Sandra Gittlen is a regular contributor to Momentum, the midsize business center newsletter. |
