Prepared by: Al Cupo, VP, Operations, SNA
SNA recently presented a free member webinar addressing the development of PATCH and other new, local web competitors. This presentation featured Mel Taylor of Mel Taylor Media as a guest speaker, and attracted a record number of webinar participants. Mel Taylor is an industry consultant who has been closely following the development of hyper-local sites like Patch, Groupon, ReachLocal and others.
During the one-hour webinar, participants heard how new hyper-local sites are making inroads into communities throughout North America. While still not making a big splash in most markets, Patch is starting to raise eyebrows; especially with local businesses. According to Taylor, Patch’s plan is to enter a market and develop advertising relationships with small and medium sized businesses under-the-radar of local community publishers. He also made it clear that Patch and other hyper-local sites are not shy about recruiting your advertising and editorial staff as a way to get closer to their target audience faster.
Taylor’s suggestion for countering this new competition is to concentrate on your strengths while focusing on your web properties as you would any other developing business. Take advantage of your print publication’s brand recognition, client relationships, knowledgeable feet-on-the-street salespeople, local content creation and your product(s) high percentage of reach in your market.
There were many questions from webinar participants; many of which went unanswered because of time restraints. The following questions were submitted by webinar participants and answered by Mel Taylor. These questions and answers provide additional insight into hyper-local sites and the concerns currently being expressed by community publishers:
Q: Since they (Patch) are not selling on inventory, as they probably do not have much, isn't this just a local search directory?
A: PATCH is in early stages of their always evolving plan. While 'upselling' directory listings is one of their offers, look for video, coupons, larger display ads and marketing services for small business to become a bigger part of their sales pitch. Selling banner ads is only step #1 for Patch.
Q: We own three weekly community newspapers in our daily newspaper circulation area. Would it be beneficial to become ‘Patch’ in our area with our own papers before they come in and try to take over?
A: ABSOLUTELY. This will allow you to strengthen your online position with a PRINT version that is published weekly. PATCH wishes they had a traditional platform in each market. A hybrid approach with reverse publishing is BEST.
Q: Our website is a paid site. Will your online strategy for selling work for us as well as for a non-paid site?
A: YES, yet paid sites do have to be aware that Patch will take advantage of that paywall on your site. Hopefully, the content behind your paywall is very strong, very unique, and can't be found anywhere else.
Q: Is there a way to monitor our local advertisers to see where else on the web they may be advertising?
A: There are services that provide this data for national advertisers but in smaller markets...not at this time. Options:
- Determine top 25 sites for residents in your town, and manually monitor them.
- Have all reps do surveys with their current clients: "where are you spending your digital dollars?"
- Hire special staff to go 'door to door' to ask.
- Outsource a call center to cold call, and ask.
Q: What strategies are effective in beating PATCH from the editorial side of things?
A:
- Create great local journalism.
- Be 'everywhere' via mobile journalism.
- Every journo carries smart phone that captures video, pics, & audio.
- Some form of friendly aggregation: "do what you do best, point to the rest".
- Do rev-share deals with the BEST local bloggers.
- Keep an eye on what Patch is doing....and do it better.
- Reverse-Publishing (see next answer).
Q: On the editorial side for a weekly newspaper, do you think the site needs to feature web-exclusive content to compete with Patch?
A: Your paper is a great platform to drive readers to 'enhanced' print content on the web (full interview, audio, video, hi-res photo galleries). Having both a print and web version of your content is a powerful weapon against Patch.
Consider 'reverse publishing'. This is a technique being adopted by many weeklies, where all newsroom personnel focus on 24/7 updating of site (blogs, tweets, quicker stories, post photos, etc). Then once a week, take the BEST of this content and prepare it for the print edition.
Q: Is there anywhere you know that Patch has hurt existing newspaper websites?
A: So far, the most harmful has been the 'poaching' of high-end newspaper execs. To a lesser degree: they are getting in front of local advertisers, and are creating more marketing options for the local business to choose from. This will make the sales rep's job more challenging.
Q: Is Patch's model of not having overhead costs such as a printing press and large offices the way to go in the future to survive?
A: While this does allow Patch to be digital-first, with no heavy hard costs...there is a downside. Patch does not have a powerful analogue/traditional platform to promote their online product. We do recommend a prudent reduction of expensive operational expenses that no longer make sense in this new hyper-competitive environment.
Q: Is there anywhere you know that Patch is turning a profit?
A: Not yet. It will take time. But that is their #1 goal. For now, they are looking to grow cash flow and advertiser count.
Q: Excellent seminar. The battle for local ad dollars will be conducted on the front lines. The more professional and knowledgeable we can make our sales staff, the less chance anyone can establish a foothold in our market. Having said that, I do believe that Reach Local might be the more formidable foe in the long run. Would you agree?
A: Reach Local may be the BEST local sales strategy on the street today. They do a lot of training, and offer most of the digital ad products that local businesses are increasingly buying.
Q: How do you see us battling Groupon?
A: Many options out there with multiple 'deal' vendors. When you choose a 'deal' vendor, make sure that only you get to keep all advertiser data. NEVER let a vendor build a local advertiser database by using your brand; it could come back to haunt you.
If you were unable to attend the webinar you can access Mel Taylor’s Power Point and the audio portion of his presentation at:
http://www.suburban-news.org/Webinars/ArchivedWebinars.aspx.
This subject will also be discussed at the upcoming
MultiMedia Key Executives Conference in St. Petersburg, February 21 – 23 during the following session:
What The Competition Is Up To And Strategies To Succeed -
A comprehensive look at the business and revenue models of Patch, the hyper-local initiative from AOL. Attendees will learn who they are, what some of their current and future plans are, and how and what they’re pitching to local businesses. Most importantly, this session will offer proven methods to effectively use against the competition.
For additional information and to register for the MultiMedia Key Executives Conference visit:
http://www.suburban-news.org/Conferences/MultiMediaKeyExecutivesConference2011.aspx
Contact Mel Taylor Online Revenue & Strategy for Hyper-Local Media
www.MelTaylorMedia.com
267-625-5313