At Worldnow, Metrics Big And Getting Bigger

For years, your biggest rival has been Internet Broadcasting. What do you make of its sale to Nexstar?

So what happened to IB? They never developed a video or mobile Web platform. They went through two separate CMS builds and then outsourced their CMS to a European company who didn’t work with any TV news organizations. They weren’t a multi-tenant or SAAS provider, which makes it so challenging to scale any technology advancement. They focused on building a lot of great national content for local stations. At the end of the day, less than 5% of their stations traffic comes from their wonderful national content they created. They focused on putting digital content teams in newsrooms, but never focused on integrating into the newsroom systems so they could leverage the news staffs that lived at these amazing stations. {Editor’s note: After publication, IB took issue with several of Gannaway’s assertions here, saying some mischaracterize IB services and others are flatly wrong. For IB’s full reaction, click here.]

But it was another brilliant move for [Nexstar CEO] Perry Sook. He now has $40 million in digital revenue and will probably drive 50% cash flow. He took a company that never made money and made it accretive for him. To the best of my knowledge, Perry’s ad impressions went from less than 10% of Worldnow to now 20%. Hats off to a smart CEO. 

I understand that Worldnow is the largest client of the Google DFP ad serving system. As such, you must understand Google as much as anybody in broadcasting. Is Google a friend or foe of broadcasters?

They’re both. But before I give you my perspective on Google’s intentions, let me lay out their strengths and weaknesses.

Google’s greatest strength is their data mining capabilities and the value to make the world’s knowledge visible and discoverable. They’ve also made themselves powerful in the engagement world through Google Plus’ integration with Google search. DFP might not be perfect, but it is the standard to monetize digital on all screens except TV.

Google’s mission statement has remained consistent and has been to organize the world’s information and make it universally accessible and useful. The world of [Google’s] Larry Page’s is all about data. From accessing it, deducing it and predictively informing, and thereby transforming, how we live our lives. Google is catering to a consumer that has the passion to discover all intelligence the world has to offer at the tip of their fingers.

To understand Google’s intention you must first look at their economic driver. What pays for Google’s engineering powers and financial thirst is their ability to sell personalized data to advertisers. Although they have an incalculable amount of inventory to sell, they don’t possess the rights to sell the most valuable inventory/data that advertisers crave. That data sits adjacent to local and national television programs.

As my Dad used to say, nothing can sell like TV. Networks, stations and content owners are in the driver’s seat. Not Google. If you want to know Google’s intentions just pretend you’re them. They know video TV advertising is an $80 billion dollar U.S. industry. Maybe in 2015, they’ll drive $4 billion in the U.S. None of their revenue is generated from calling on locally based TV advertisers. Local TV’s revenue is roughly 20 billion. If you want a nice take-away analogy, imagine all local ad dollars for all media were placed on a Monopoly board. Guess who owns and controls all the blue and green spaces, local TV. It can’t get better than that. It’s true today and it will still be true tomorrow even with the emergence of IP TV and new technologies especially the OTT big-screen world.

One day, five to 10 years from now, local TV advertisers will be spending billions with local TV reaching their audience through an IP-enabled screen. These advertisers are going to be paying far higher CPM than they are now because they will be able to measure their ROI because of data. It’s good to be a broadcaster as well as a shareholder. Also not a bad day for Worldnow having the technology, people and client base that will bring all this to life quicker.

You’ve been preaching that the way for broadcasters to monetize digital media is to use it to boost broadcast news ratings. What evidence do you have that actually works?

As far as hard evidence, direct cause and effect is often difficult to prove. However, for the past three years, we have been tracking the digital metrics for our station partners that have put a major focus on these platforms and compared them to their local newscast ratings. In analyzing these numbers, we have seen consistent positive growth for both their digital and on-air products. We published a white paper over a year ago on this topic with specific detail on the impact we found.

Here’s one example. In May 2013, several tornadoes ravaged Oklahoma killing 48 people and destroying countless homes. During the crisis, the Griffin-owned station in Tulsa [KOTV], versus their TV competitors and the local paper, had over half of the unique visitors, over 100 million page views. KOTV set a local media record for repeat visitors. This is the greatest way to gage digital success. KOTV’s 6 p.m. news ratings were greater than their two competitors combined. KOTV’s May 2013 ratings grew over 30% in households and adults, 18-49, versus 2012. Their two competitors were flat.

A problem for TV stations is funneling content to various digital platforms, particularly social media. What are you doing to facilitate the workflow of your client stations?

The problem is huge. There are more than a dozen different systems a newsroom must use every day to get content on all screens.  We put tremendous effort in to training and consulting with our clients on how to re-engineer workflows through Worldnow’s Media Management Platforms. A few years ago, we incorporated a new platform called Rules Based Automation, which empowered stations to set up any number of custom publishing tasks to automatically execute with the click of one button. The great power in this feature was that for the first time, the entire newsroom staff could publish across digital platforms.  

Studio Gateway is the latest addition to Worldnow’s portfolio of media management platforms. It’s an IP protocol that creates a two-way highway over the one-way highway that lives in the legacy newsroom systems. For the readers that are familiar with MOS that takes content from one machine to another, they now can have a bi-directional flow of content whether it’s being produced from the field or within the firewall. It’s pretty cool. Kudos to Joe Sticca and Robert Forsyth here who made it happen.

I know you asked specifically about how we’re addressing social media. I hope it’s OK that I’m only sharing a little before NAB where all will be revealed. My daughter Samantha, our head of strategic partnerships, took it upon herself to help WorldNow address these challenges with the creation of a social/mobile/video CMS. Unfortunately, that’s all I can share for now.

Why don’t stations sell their national inventory on their own? Also, how do you balance building the ad business while advancing your CMS?

The second question is really easy to answer. It has to be in Worldnow’s best interest to enable our stations to produce as much traffic as possible because it gives our national advertisers more premium local inventory to sell their products. To make it even simpler, if Worldnow’s technology and consultative services aren’t the best of breed, our affiliates will leave us. If we don’t maintain and grow our station lineup, we won’t have any advertising inventory to sell or business to run.

Just to set the predicate on your first question, no broadcaster has to give us the exclusive rights to sell their national inventory. A few stations decided to pay us more license fees instead of sharing their inventory. Here’s my 15-year perspective on the national advertising market. As technologies advance, more sophisticated yield optimization tools will emerge. Can you imagine there are over 600 ad networks motivated to drive down our rates? We’re not the airline industry.

For blue chip advertisers, we have the most preferable and safest environment to connect to their consumers. When Worldnow has the exclusive rights to sell national ad inventory especially in markets where we have three stations, like Nashville, it’s pretty easy to sell at a $40 CPM to automotive categories. Think about it, they need our data to first find auto intenders. From there, we can create scarcity, and thus drive up rates, through exclusive targeting of an advertisers message by date, time, location [mobile] and the ad placement and size for each screen. This can only be achieved by not letting the ad networks have us bid against ourselves. WTVF can attest to the large sum of money we pay them each month.

Is WorldNow where you would like it to be in terms of serving users on smartphone and tablets?

We were one of the first CMS providers in our space to provide responsive design sites to our clients. But so much has changed so quickly and it’s critical that our mobile evolution stay cutting edge. So no, we will never be satisfied because we know we will constantly need to iterate to meet the needs of the exploding mobile audience. We used to pride ourselves on being the only proprietary CMS, video and mobile Web solution for broadcast TV.  Now, that’s not good enough for us. In our next iteration will be introducing an app generator so that through one publishing system we can get our station’s content published to any format on any device.

Station websites have been criticized for being too much alike? Aren’t Worldnow and the other national CMS services at least partially at fault for that?

Actually, no. It’s the CEO and the GMs that ultimately drive the design decisions for their brands. Often sites look cluttered because no one is setting strict guidelines about user experience. We consult on this but ultimately the stations are in control. There are some exceptions, some of Worldnow’s best performing stations like WTHR, WBOC, KLAS, KOTV, WCAX, WTVF and WBBH focus on mastering every detail of their consumer experience on each and every screen.

I wish top managers were asking the most critical questions. Yes, they know their unique visitors, or page views or time on site, but not one CEO, general manager or digital lead has ever asked me if they should focus on repeat visitors as a data point to judge their digital success. So my advice to CEOs is to elevate your digital leads to be equal to your most senior news executive and if you only pay them for driving digital audience and revenue, that’s all they will focus on and you’ll make a little money.

It’s not that GMs and news directors don’t fixate on brand and content excellence; they just stop with the on-air product. They focus on everything from opening graphics, music, set design, lights, talent, wardrobe, haircuts, camera angles and the passion for great journalism and brilliant news coverage.

But what stations need to keep in mind is that there are more unique visitors sampling your product online than there are viewers seeing your on-air product. So many stations have mastered the art and science in creating on-air promos. That’s a level of attention that has never been given to digital.

When you look at the bar set by Huffington Post, they do live A/B testing on everything from headlines to colors, font, photos, content organization, search engine optimization, social engagement, and they use data to understand the person behind the device. So that the content served — think Buzzfeed, Forbes and Business Insider — is individualized and addictive.

Broadcasters should take a page out of Forbes’ digital playbook. Instead of letting their brand become irrelevant, they used digital to redefine their product, brand promise and connection with the consumer.