BORRELL MIAMI 2020

Local Media’s Digital Faithful Meet In Miami

OTT and revived TV membership models were among the highlights of a local digital advertising conference that just managed to sneak in under the coronavirus wire.

MIAMI — “Welcome to the last conference in the world!” quipped youth marketing expert Matt Britton at what was formerly known as the Borrell Local Online Advertising Conference here on Monday.

In the coronavirus-frenzied world, all signs are pointing to the prescience of his joke, at least for the foreseeable future, a backdrop that lent a certain surreality to discussions of audience data and sales funnels here.

But the business of local media must keep calm and carry on — for now, anyway — so veteran analyst Gordon Borrell gamely presented his annual conference, now relocated south from its longstanding tenure in New York, amid news of tanking world markets, proliferating new coronavirus cases and a hastily-adopted professional protocol of eschewing handshakes for fist bumps.

The complexities inside the local advertising world, meanwhile, have gotten no less convolved themselves. “Half of advertisers aren’t sure what they’re spending,” Borrell said. “They’re really confused. They don’t know what’s going on and what they should be doing.”

Maybe they don’t know, but Borrell’s more ardent digital acolytes think they do. Many from what we once called the newspaper world have long since adopted his prescription for a litany of digital marketing services. They’ve been knocking on the doors of SMBs for going on a decade now with a mantra to listen to the client’s needs and have a toolbox full of SEO, reputation management, website building and the like at the ready.

Some of the more digitally evangelistic broadcasters have been there alongside them. But now, just as a decade ago, there’s far less urgency to their calls. Unlike newspapers, broadcasters have not yet heard the wolf at their doors.

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Which isn’t to say some of them don’t sense the wolf may at least be in the neighborhood. One of them is Catherine Badalamente, SVP and chief innovation officer at Graham Media Group, who has long followed an aggressive digital strategy as a proactive countermeasure against what she sees as worrisome trend lines in TV broadcasting.

“Why are we doing this? Because of declining traditional revenue and ratings,” she said at a panel exploring nascent TV membership models, one of which she has been experimenting with at Graham’s KSAT in San Antonio, Texas.

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A handful of broadcasters including Graham are dipping a toe once more into memberships, a scheme tried and all but jettisoned at E.W. Scripps-owned WCPO Cincinnati several years back.

Helped by a $300,000 grant from the Google News Initiative, KSAT’s own membership model veered directly into a burgeoning events business, Graham said.

The Local Media Association is partnering with three other broadcasters — Fox Television Stations, Meredith Broadcast Group and WRAL/Capitol Broadcasting — on a TV Membership Project of its own, which is just coming off its initial three-month research phase.

John Conway, GM at Capitol Broadcasting Co. New Media and WRAL.com, said he didn’t need much arm-twisting to get on board the pilot, driven by a need to keep diversifying revenue, deepen a connection with the station’s most loyal viewers and build a competency around data management, especially in light of a future without third-party cookies.

“It’s a first-party data play, not a path to replacing ad revenue,” Conway said. “We’ve probably got more data than a lot of broadcasters.”

Bill Day, a VP at Magid, said the climate was right for local media to give membership a try once more. “Consumers are willing to engage subscriptions against an incredible array of products and services if you give them a reason to engage with the brand,” Day said.

On the local front, Day said 14% of consumers are very interested in a local subscription service. The caveat is that the subscription needs to offer high-quality choice, something already in abundance among the proliferation of streaming services for which many consumers are already shelling out.

The LMA’s project will now shift into its next phase — producing a minimally viable membership product in at least one market for each participating broadcaster — over the next five months.

Another relatively new narrative that has elbowed its way in to Borrell’s digital universe is OTT, where presenters were highly bullish about its viability.

One of them was Bill Caudill, VP of digital sales for Nexstar Media Group. With more than 1,800 sellers across Nexstar’s 43-state footprint, Caudill has been eyeing the nation’s 90 million connected TV households hungrily. That hasn’t been hampered by the fact that even though it’s now the nation’s largest station group, only one of Nexstar’s stations — San Francisco’s KRON — actually has an owned and operated OTT app, which, what’s more, is behind an experimental paywall.

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Nexstar’s approach instead has been an aggressive OTT reselling effort on the platform’s numerous SVOD services along with some additional revenue from vMVPDs.

But Caudill says those OTT reselling efforts face the same issues that have long bedeviled broadcast sales forces when confronted with digital products. “All 1,800 people need to be steeped in this space,” he says. “But OTT is complicated. It’s one of those challenges we have with our sellers.”

It’s a challenge worth persevering through, he says. “OTT is probably the most demanded video product I’ve seen since social.”

Cardill says 75% of the sales business Nexstar does is small, direct and local. But even when courting SMBs in local markets, it will find competition from some OTT heavyweights.

One of them is Hulu, whose VP of local and regional sales, Jennifer Donohue, was another presenter. Donohue was coy about how many local sellers the platform actually had in the market, but she did allow that Hulu now has five regional offices, in Chicago, Detroit, San Francisco, Santa Monica, Calif., and New York.

“The value proposition [to local advertisers] is we’re viewer first, so we lead with our subscribers,” Donohue said. “We have premium content, we are 100% addressable and we are in your market.”

She says Hulu has a wide range of local clients with pricing starting in the $30,000 range. Many advertisers tend to have been previous buyers of digital video and radio. Automotive, attorneys and furniture are among the verticals where the streamer has made headway.

Given its progress in local markets with its own sellers, Donohue said working with local media companies on reselling just isn’t in the cards. “Clients are speaking with us directly, so we’re not speaking with others,” she said. “It’s certainly not part of our plan right now.”

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This year’s attendees were nonetheless urged to make targeted video advertising part of their plan. Michael Beach, CEO and founder of Cross Screen Media, said targeted video ads are predicted to jump from 49% this year to 59% next year, climbing to 77% and a $98 billion market by 2023.

“The hottest things are attribution and targeted video advertising right now,” he said.

Beach said both the buy and sell sides of advertising also want to see more cross-platform teams come together with equal competency and comfort on all forms of video advertising.

More than a few laments arose over the conference’s two days that such sellers were still in short supply, a longstanding problem that has vexed digital’s growth for as long as Borrell has been convening its most faithful evangelists.

Even at Graham, where CEO Emily Barr is as supportive of digital initiatives as any leader to be found in the industry, digital as a percentage of overall revenue still hovers under 10%, Badalamente said, albeit 10% of a larger overall revenue pie than when such efforts began.

For TV broadcasters, healthy retrans fees and a banner political year may make that stunted growth a fact that’s easily dismissable for another year. For all but a few newspapers, meanwhile, digital’s potential life raft came too late, or perhaps was just too small, to save most of a drowning industry.

It remains to be seen whether OTT’s own revenue potential may elevate digital’s status in the eyes of skeptical broadcasters, though signs are positive.

In the meantime, Borrell’s attendees seemed energized to have a new digital platform to add to the arsenal. And it was a brief reprieve from mounting uncertainties that made this convocation likely one of the last the industry may see for some time, if not the last conference in the world.


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