Small Heartland Media Has Big Digital Goals
Heartland Media embodies the argument that a broadcaster’s size needn’t limit its digital ambitions.
The Atlanta-based company has a footprint of only 11 stations in small markets, but Lisa Bishop, its chief digital officer, brings a history of bigger-scaled digital experimentation to the table from her previous tenure as Gray Television’s VP of digital.
In an exclusive interview with TVNewsCheck’s Special Projects Editor Michael Depp, Bishop said Heartland’s small scale has been challenging, but it hasn’t hampered the broadcaster from launching all of its stations on OTT and the Amazon Echo voice platform. And limited resources also haven’t clipped the wings of digital sales, which have risen to the double-digit mark that eludes much larger peers.
An edited transcript:
What are Heartland’s ambitions for OTT?
Right now, we are on three platforms. We have an OTT app on Apple TV, Roku and Amazon Fire TV. We relaunched all of those apps in December  and January, and we’re just watching it right now. We are able to serve ads in the same way that we do for mid-roll in live stream over the web. We’re not serving separate ads. We’re selling all of our video right now as a package until we have a large enough audience to be able to separate it.
Are you dealing with any vMVPDs?
We are, and those deals I’m not as familiar with because those are through our retrans and affiliate agreements. I know that we are on Hulu. We’re starting to gain some traction a little bit there, but the audience is so low it really hasn’t been enough to move the needle. We’re letting those audiences grow somewhat organically and see where we end up.
The strategy right now is to just be in as many places as we can and let the audiences grow, then we’ll figure out more strategically how we’re going to go about monetizing and shifting that focus.
On the technical side, how do your stations actually get their signals to each of those platforms?
Each of them requires a separate set of hardware, which is somewhat prohibitive. We’ve already got hardware in place for our traditional live, VOD, OTT and app streams, and then those guys all want separate hardware for their stuff. For a smaller group that becomes cost prohibitive and kind of redundant because we’ve already got the technology in place, so ideally it would be great if they could just play with what we have. But they want to control that.
What are you learning about your audience behavior on OTT so far?
Roku by far is the largest audience that we have, and they’re finding us via self-discovery. We haven’t paid at this point for any additional or featured placement on that platform. We did very little promotion out of the gate because we wanted to be sure we had a lot of the kinks worked out. I was somewhat pleasantly surprised by the amount of growth we had and how Roku took the lead and continues to grow.
What about engagement times?
They’re strong as well. We’re seeing an average of 3:30 minutes time spent. We have some stations up near the five-minute range, which is pretty significant. What’s nice about those platforms is that they’re coming to us directly and engaging with us directly.
Where do you see the strongest revenue plays on OTT?
Getting the audience there is first and foremost. We’re selling OTT as a part of our video solutions. If a client buys a pre-roll or mid-roll, it’s going to go across all of our platforms. Down the road as that audience grows, we may be able to separate that out. As of right now, we are going CPM-based.
Are you producing video uniquely for OTT or digital platforms?
We’re not. I wish that we were. That absolutely needs to happen at some point. We need to mature a little bit there.
What’s your take on the potential of the voice platform for local stations in terms of audience, content and revenue?
It’s very early. All of our stations have a news and weather skill on Alexa. We launched one station about a year ago as a beta, and it has been pretty slow growth. We just launched the rest of the stations this year. We don’t have anything on Google yet. We don’t have any revenue behind it just yet. The problem that we’ve come across has been more on the reporting side back from Amazon. I don’t know how aggressive on pricing we could get without having any ability to report on the back end.
Many people think these devices are the 1.0 version of what voice is going to be. Do you have any blue sky thoughts on what the 2.0 version and beyond might look like for station groups?
It would be in Amazon’s best interests to build in some kind of ad mechanism and reporting mechanisms. If they can get that part nailed down, that opens the door a little bit. There’s absolutely a market there. I look at it the way we first did when smartphones came into the market. We know these things are going to have some impact on our business in the future, and being there is the necessary first step. If we can grow our audience early on, it’s going to better position us down the road when the ad models start to follow.
It has been a volatile year for Facebook. Has your content strategy on the platform changed in light of its algorithm changes, fake news problems and failure to become a significant revenue source for most local media?
The only thing that we didn’t jump on that maybe some counterparts did was Instant Articles. I was skeptical pretty early on. I didn’t feel that it was necessary to do it and it would just replace what we were already doing. Believe it or not, we haven’t seen in our analytics an impact from the algorithm changes. We’re not doing a ton of Facebook Live video. If we do video on Facebook, it’s usually a promotion for what’s coming up. We’ve been engaged with the Facebook Journalism Project, but at the end of the day, it’s our goal to build our own audience and protect our brand as much as possible.
Is the local station homepage dead? An afterthought now?
It has always been kind of an afterthought. Pretty early on we found that the article pages were really dominating where the traffic was coming from. We actually just revamped nine of the 11 sites. We pulled off some of the display remnant advertising and re-laid out our sites. We were impacted pretty significantly by some of the malicious advertising. We were continually having issues with bad ads or ads that were just brand diminishing, and we were having a hard time with our network partner getting them to block these things.
We decided this shouldn’t be a focus of our revenue efforts, so we pulled it down to see what happens. Our engagement went up. The time to load our pages increased significantly. Overall, we saw a significant amount of improvement in performance of the sites.
What percentage of your digital traffic is coming through mobile?
About 75%-80%. It’s up there.
Is Heartland making any forays into podcasting?
As a group, no. One of our stations is doing some local, very separate and outside-the-box-from-regular-news-content podcasting. We’re keeping an eye on it to see if it’s something we want to replicate. They don’t have any sponsors tied to it at this point. We’re tinkering with things like that to see what we can learn from it before we put a strategy in place for the group.
Heartland’s stations are all in smaller markets. How has your size shaped your digital strategy?
Coming from Gray, I had the luxury of scale. More stations definitely make it easier to scale, not only with partners and vendors but also internally. I have a corporate team of five that centrally manages our digital efforts, but with more stations comes more talent that we can spread between stations. It’s challenging.
Digital persistently remains such a very low percentage of overall revenue for most station groups, surely much to the chagrin of their digital chiefs. Is it fated to stay stuck in the lower single digits?
We are pacing 10% right now of our revenue as digital. I would love to double that, but it’s where you’re willing to invest. The list of digital products is endless. The digital sales teams, however, are not.
What we’re trying to determine is at what revenue threshold per station does it make sense to add another digital seller — When it hits $700,000 in digital revenue? Is it $1 million? What we have noticed is at the stations where we have added a second digital salesperson, are our top performing stations.
With what digital products are you finding the most revenue success?
Our biggest product bucket line is audience targeting. Just about every client wants to have some piece of that. Unfortunately, pay per click gets the lion’s share. There’s just very little margin in that game.
Where are you setting your priorities for the next year?
I’m particularly interested in more native display. We just created and launched a native display unit on the site, and I’m interested to see how that takes off. We’re also making a pretty big push to sponsored posts in Facebook using our partners at Social News Desk. There is a lot of money on the table given the size of our Facebook audience.
Any particular anxieties?
The shakeout of the industry. Our ability to exist in an industry where there are maybe three or four dominant groups. That’s a challenge, and we just need to figure out our place and how we maneuver in a world where we are not only small in market size but also number of stations.