Borrell 2010: Q&A Reveals Most Interesting Details

I made it to the Borrell Conference in NY this week. The opening panel was very good. Jeff Jarvis opened with his Hyper Local business model followed by a panel with ...

Keynote - Jeff Jarvis, Director, Interactive Journalism Program, City University of New York
Panel - Chris Hendricks, Vice President of Interactive Media, The McClatchy Company
Panel - Chris Jennewein, President, U.S. Local News Network
Panel - Troy McGuire, VP of News and General Manager, Fischer Interactive
Panel - Mark Potts, CEO and Co-Founder, GrowthSpur.com

A lot of the information was a repeat from blog posts and tweets about each initiative but the Q&A section revealed some interesting insights.Here are some notes I captured. I was most interested in the discussion around sales and what strategies are successful in supporting the HL strategies --

Fischer Interactive
Launched or partnered with 109 hyper local Web sites. Generated 400k uniques in seattle a month. They have 1,000 paying advertisers, most of which have never advertised on TV. Fischer claims their HL initiative is profitable. The use a company called DataSphere to power the hyper local sites (widely published partnership) and they have a tele-sales team (40 people) that sells the smaller packages to smaller SMBs. The use of a tele-sales team for going after SMBs was something I pitched to Gannett 5 years ago and was shot down. Fischer claims its very cost efficient and successful because it allows the traditional sales team to focus on the blue chip companies that capture higher revenue per package. One side note that I found interesting and should present a possible gold mine of story ideas for any newsroom -- Fischer claims that they find a lot of story ideas come from user comments.

USLNN
Building a network of HL sites. Started in San Diego and adding Orange County -- SDNN.com. The focus on blue chip advertisers in the local market. CPM is about $10. They focus on under-served suburbs. They really try to incentivize their AEs in the following way -- Relatively low base with 15% commision, 20% if you make quota, 25% if you go 15% over quota. Again, this approach is something I pitched to previous employers as a way to get young, inexpensive and aggressive sales people to sell Web-only. I believe the traditional media companies militate against this because (1) it means complicating something they have done the same way for many years increasing the work they must do for hiring and oversight,  (2) it could create conflict with other AEs in the organization with different compensation structures, (3) ego. USLNN noted that  a segment of advertisers want to have blogs on the core site (A kind of advertorial content) in order to deepen the relationship with their existing customers.

McClatchy Papers
Their hyper local strategy is pro-am strategy, a mix of both professionals and amateurs. Twelve sites are digging into it, including Charlotte and Miami and Raleigh. Raleigh is a success story. McClatchy is against outsourcing sales like Fischer did. Hendricks argued that it somehow undermined the brand having these other people sell. I've actually heard that before. McGuire vehemently disagreed. He said most of the advertisers don't care who is selling, they care about leads and results.Hendricks noted that not all bloggers update as often as a publisher might like. He suggested that they needed to be incented to help them get past the grind of repeated regular publishing which can tire them. They plan to pay blog partners and or share revenue, but they don't yet.

Jarvis: Bankruptcy May Be Best Bet for Old Media

Thanks to Steve over at LR for pointing me to this interview with Jeff Jarvis. Jeff argues that old media must reduce their cost structure to survive and suggests that there may be no way to really do this outside of bankruptcy. Jarvis, is speaking from the same hymnal as Michael Rosenblum. I previous touched on Rosenblum's comments. He recommended burning TV to the ground and restarting. In both cases the point is well made -- the old media is burdened with incredible costs structures that prevent it from remaining profitable in the long term.

While Jarvis and Rosenblum both recommend starting from scratch after shutting down the legacy business, I would argue that old media can start the new businesses in parallel, shielded from the management of the old media businesses. Yes, the new businesses will be parasite for a period of time. The key arguement for approaching change in this manner is the time it takes to cultivate a new media business -- it is a process, not an event.

Jim Thompson was good enough to point this out in a recent post. Local TV stations are excellent at covering events and often not very good at process. What needs to happen with online and mobile businesses is cultivating audience and product over a period of time. Web entrepeneurship is a process of iteration -- concieve, implement test, start over -- where you perfect over time. The later is what is required when building a New Media business. Not every business can be Google or YouTube or MySpace or Facebook. If it was easy to create those 'jackpots' every time, every one would do it.