local media insider

First 10 models for digital service agencies within local media companies

Alisa Cromer

So before going into the process of creating a suite of digital services, its helpful to review "what's out there" and what combinations of services are working.

LocalMediaInsider researched  15  markets, all of which have taken a slightly different approach to offering services and all of which have achieved a level of success. These case studies fall into ten basic categories. 

Some companies have chosen to start with skills they have, plus a little more - typically reputation management and listing distribution - and add additional capabilities slowly. This is especially true in smaller markets where merchants are struggling just to launch web sites (see also How to start a digital services agency). 

In other cases, companies have chosen to dive in with turnkey partner and wide array of services. Or focus in just one area that is especially in demand and lucrative. Finally, a few companies have opened true advertising agencies that focus only on the most lucrative accounts and bill for their time.

Here are some basic approaches with links to the case studies:

1.SoloMo – The basic SoLoMo product set exemplified by Morris Communications' initiative (case study here), is built around Social (reputation management ), local (directory listing and placement across many directory), mobile (simple site, with sms and mobile banner ads). The SMS product encourages traditional display advertising since it requires push-media, although in this case Morris included mobile display which pairs well with SMS and of which there was an abundance of inventory. This basic package is a good ‘starter,' (note that Morris did not significantly change it more more than a year, though are now transitioning to LocalEdge, a Hearst product suite, exectuives say). 

2.SoLoMoSho – Coined by executives at Rust Communications, that launched the model in one market over the summer, SoLoMoSho adds video to the mix. Rust calls their marketing packages, "ShopTalk." It relies on a basic set of services starting with a profile in the company's "Marketplace' section, and including a professionally produced video that is distributed on the Marketplace profile, plus YouTube and the clients' web site. A key aspect of this program - which executives say will clear $50,000 in profits on $150,000 in new revenues in one market its first year - is the quality of the video (LMI has see the results and work produced by the local videographer is exceptional). Packages all include a print component with QR Codes.

3.Solomoshoblo – The original idea for ShopTalk came from the much larger Metroland Media (case study here), that added $1 million in new revenues across ten sites in 2011. Adding a managed blogging schedule to  print QR codes completed the “shopping place” model and provided extra SEO. While Rust used its existing Marketplace, Metroland build their own, and the division is run by a former television producer which as helped to streamline video production.

"Video is critical marketing tool for every single business. If you create a video for a business they can utiliize it in many ways,"  said Meriel Bradley, Director of The Digital Video Group.

Metroland's version incorporates merchant blogs as content on the ShopTalk site.

4. Focus on Facebook and other social media services. Social media is in high demand by local media - many of them want to both participate in the new sources but also need help in turning customers into fans and fans into lead.  Typically tiers add managed services and contests, the latter of which requires more traditional push media and produces big, measurable results for clients. 

While most media companies included "social" as just one set of services, a few companies selected social as the core focus and built other services around it. One such effort at a newspaper company is GetitSocial (case study here) created at Lee Enterprises. There are three tiers including the first one that helps clients get their social presence "established," followed by a managed program with contests that gets fans "engaged" adn a third tier for high end customers. They use a variety of vendors (included in the case study), all adept at Facebook tools and have acquired 250 multiple-month accounts in the first year (late 2011-2012) after launching Lee-wide. 

Broadcast company E.W. Scripps also went straight for the big money, launching a full-on Facebook strategies initiative supported by ad workshops (case study here). Scripps did not rebrand a separate division, but in other aspects, however, the iniative looks remarkably similar to other agency service that merely include Facebook: Educating advertisers via workshops, building simple entry forms for merchants' pages, managing long-term fan engagement and conversion strategies and reporting results. 

Social media as one of a suite of services is a model exemplified by NextMedia360 (case study here), that added customized social media and social media management two years after into the launch of its agency. Executives say they should have done it sooner. 

5. Focus on SEM and SEO, with leads-based reporting. 
SEM is typically more difficult with edgey margins,and left for companies with very large accounts. However, large companies such as McClatchy's ImpresLocal launched in mid 2012 with a focus on leads tracked by a new integrated dashboard and univerasl landinag page (case study here) and Dow Jones Regional Media group (case study here), who had existing experience in SEM-buying and  moved more strongly into that sector as a key part of digital services. Dow Jones launched ahead of the pack in 2011, and simply used a corporate team to support the effort without rebranding.

McClatchy's initiative, ImpresLocal is especially interesting, since they focused on SEM in a fairly small initial product set, but one that includes a customer landing page to track conversions and the conversion-tracking dashboard developed with TruMeasure. This focus starts out right by allowing reps to prove "leads" not just clicks or impressions; more products can be added later. 

6.Hourly services package on a Flex plan. This is an interesting concept created by NextMedia360 (see examples here) that includes packaging set services with a certain number of hours that can be used for anything, see the services broken into units and packages here.

7.Focus on email. Increasingly targeted e-blasts have been added to the mix of services. Skill-sets and resources deployed to create email audiences daily deals are a hidden resource that companies can expand and monetize. The Washington Suburban Press Network (case study here) built and entire agency  around its 108 suburban newspaper members based largely on targeted e-blasts to 25 or so e-mail categories supported by Presslaff's platform. But even small markets are adding targeted emails to the product set as something they have current skills to deploy, as shown by theKenosha News case study.  

8.Turnkey solutions with comprehensive products. A last option is to use a provider to "fill in the gaps" in skill sets that the local media doesn't have. Hearst's LocalEdge; Gatehouse' Propel Digital, and two independent companies, Guaranteed Digital and Dream Local Digital, all provide support plus back-end fullfillment. The latter two do in-market training, conduct the ad workshops and support a wide variety of products and services. The case study on Kenosha News shows how they used this model to develop $25,000 a month in digital revenues in six months of 2012. 

9. High end agency services. A few companies have chosen to create separate agencies that go after significant accounts - in the $15,000 and up range - with hourly charges and customized programing. Examples of semi-external, and uniquely branded agencies are Times Digital Group (case study here) in Kingsport, Tennessee, and 1100 Broadway, created at the Nashville Tennessean, a Gannett company, case study here. 

10. Focus on Creative. One last variety of agency focuses on creative services, providing free 90 minute brainstorming sessions to create the core concept for high end accounts. The multi-media campaigns - typically heavy on targeted display ads and combinations of multi-media products - are then built around the concept. This model was created inside the PalmBeachPost (case study here) during a total reorganization of the company. The  new Creative Solutions division appointed the former editorial lay-out editor as head of the brainstorming group, with training from CSS. 

In conclusion, there are a variety of strategies  - and no black and white lines - in the way companies organize to sell digital services as well as advertising.  

From a standpoint of margins, the most profitable may be sales and upsells of social media contesting which attracts larger tradiional media buys. However, there may be larger profits in the long run from expanding market share. Put another way, it could be the choice between developing ten new $20,000 customers or developiong 100 $2000 customers, the later is actually more money. Smaller dollar bundles, however, require greater efficiencies as well.  Since the smaller bundles pay off over a greater period of time, and have to do with achieving internal competencies and market share goals, there are short term, long term decisions to be made. Finally, an important cultural issue is how well each model addresses the needs-based sale that an agency apporach requires. 

Please see "How to start a digital services agency" for insight on making the design about which model to deploy. 

Alisa Cromer

The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and  MediaExecsTech,  developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine,  to showcases perspectives from around the  world on new topic each month, translated from and to the top five languages in the world.