It's simple to understand why television stations and networks are devoting people, technology and expertise to developing their Web presence. Internet advertising is on fire, and the desire to cash in on a new, substantial revenue source is extremely attractive.
Consider a few headlines: “U.S. online ad market expected to double in four years,” Information Week (Jan. 18, 2008); “Jupiter: Local online advertising will be worth $8.9 billion in 2012,” Search Engine Land (Jan. 16, 2008); “Internet to dominate ad spend growth in next 12 years,” BrandRepublic (Jan. 21, 2008); “Burgeoning online ad spend will pass TV next year, says WPP” (in the UK), Independent (Jan. 3, 2008).
Or, look at some of the underlying facts, figures and forecasts. By 2011, online advertising in the United States will produce $50.3 billion in revenue, according to a forecast released last month from the Yankee Group, a research and analysis firm in Boston, MA. In the UK, media planning and purchasing agency Group M predicts that at the end of this year, the amount spent on Internet advertising will be nipping at the heels of television advertising spending in Great Britain, and will surpass what's spent on TV advertising next year.
This year's Competitive Technology Summit, co-produced by Broadcast Engineering and Broadcasting & Cable magazines, features a panel discussion by broadcasters who are responsible for steering their companies' online and mobile efforts to claim a piece of the digital media action. Panelists include Paul King, corporate director of Internet sales for Raycom Media; Carl Gardner, executive VP television radio operations and digital interactive media for the Journal Broadcast Group; and Brian Bauer, VP and general manager - interactive for Barrington Broadcasting Company. While each offers a unique perspective on how to get that done, they all agree that doing so takes the right combination of people and technology, as well as recognition on the part of management of the importance of new media to the success of the entire enterprise.
The Web and localism
It's no secret many television stations have built their identities in their local markets largely based on their on-air and off-air involvement in their communities. The Internet gives them a chance to take that relationship a step further.
“The Web is an unlimited opportunity to expand the idea of localism to the umpteenth degree,” Bauer says. “Whereas we have a 30-minute newscast in which to provide compelling news and information, on a Web site, we're not restricted by time.”
How best to take advantage of that virtually limitless potential involves elements with which stations are quite familiar.
“People are looking for a lot of the same things that they come to the television station's over-the-air newscast for,” Gardner says.
Adds King, “The two primary reasons individuals go to local TV Web sites are local news and weather. So it's imperative that high-quality and deep and breaking news and weather stories/updates are posted to the site frequently during the day.”
Visiting a station Web site for content like news and weather is changing the expectations of the public, Gardner says.
“We are aware that our viewers' habits are morphing into a new place where they haven't been in the past — where they are becoming accustomed to being able to get at content that they choose at a time that they choose on a device that they choose,” he says. “So our job is to make sure we're prepared for that when they come to us.”
However, delivering that online experience places new demands on station technology, budgets and personnel, particularly in newsrooms where most of this content will be produced. While the transformation of a newsroom from a linear tape-based news production methodology to a file-based workflow can seamlessly augment content creation for a station Web site, there's a lot more than that involved in order to be successful, Gardner says.
“It's not realistic to think that you're going to have a first-rate Web site by just asking everybody else in the newsroom to sort of do it as their part-time job,” he says. “You do have to have some people whose primary focus is there. But if everybody's contributing at some level, it sure carries it a lot farther.”
Gardner likens the process of creating fresh, compelling content for the Web to a mason who must move a pile of bricks.
“Our philosophy has been that if everybody carries one brick, you can move a lot of bricks,” he says. “If you have 100 people in the newsroom, and everybody carries one brick, you can move 100 bricks as opposed to having one person try to move 100 bricks.”
However, it's mandatory to have personnel whose primary focus is the Web site. Leveraging existing news production resources coupled with the involvement of dedicated Web personnel are essential if stations are to succeed in keeping their online content fresh and avoiding the trap of simply just encoding stories that ran on the evening newscast for Web distribution.
“We fully understand you can't just repurpose a TV story and expect to develop strong viewership on our Web sites,” King says. “There needs to be additional information to the story viewers saw on air — more detail, greater depth, things they wouldn't see on the story on TV.”
Doing so will reap significant benefits for the station, including increasing page views, which translates to increased ad impression, King says. More ad impressions increases inventory, which “allows us to monetize our sites at a high-level,” he adds.
According to Bauer, Barrington Broadcasting and many other stations and groups are becoming far more proactive in charting their own online destinies.
“Broadcast companies are taking back control of their Web sites. I'm seeing a lot more people unwinding or adapting relationships with third-party platform providers and bringing that technology or aspects of that service in-house,” he says. “The other trend that I'm seeing is taking back control of our Web site content. What I mean by that is at least for Barrington — and I think a lot of Web operators are the same way — we're asking for the ability to take the online content of a syndicated show like ‘Entertainment Tonight’ and reformat it into a layout, into specific design standards that are harmonious with the rest of the layouts of our Web sites.”
In fact, the first question Bauer asks about any project crossing his desk is whether Barrington Broadcasting will have the ability to integrate the content online in a manner that's consistent with the overall look and feel of its stations' Web sites. Recently, he even turned down online content from “Entertainment Tonight” — content he was quite interested in — because it was an as-is module that he says wasn't “terribly flexible.”
“We ended up passing on the initial opportunity because I wasn't able to incorporate that module into my Web site,” Bauer says. “So, we lost out on the opportunity.”
Given the growing importance of a station's Web presence to its overall financial success, asserting greater control over third-party service providers and content is easy to understand.
“We're looking at the 5- to 10-percent range in the foreseeable future (as digital media's percentage of overall revenue),” King says. “As we continue to roll out new technologies and techniques of selling, and as we develop stand-alone products and as the Internet gets stronger and our products improve, we certainly believe it goes up from there.”
At Journal Broadcast, new digital media are contributing to the bottom line as well.
“We are experiencing very rapid growth in our interactive media revenues. That speaks for itself,” Gardner says. “We're finding a tremendous appetite on the part of our customers to get involved with the interactive platforms, and just like us, they're trying to gain some experience with it to see what works.”
As with content creation, what works in actually selling online advertising seems to be a combination of leveraging existing personnel and augmenting those efforts with digital media sales specialists.
“In terms of how we are getting it out to the marketplace, we're taking a hybrid approach where we are adding people to our sales force whose job it is to specialize in interactive media solutions,” Gardner says. “But we also are actively training and trying to involve our traditional media salespeople and working with these tools and solutions.”
The approach is similar at Raycom Media, King says.
“We also engage the existing broadcast sales force in the process, but the key is they have someone they can turn to to assist them in selling the Internet packages,” he says.
Monetizing a station Web site takes many forms, King says.
“A lot of them (ways to generate revenue for the Web) are in areas like sponsorships, vertical selling, contesting, banner ad campaigns, e-mail blasts, mobile sponsorships and directories,” he says. “So it's just endless — the different tactics and capabilities we have to monetize our 40-plus Web sites. I like to say were only limited by our own imaginations.”
Is it realistic to imagine the Web opening up an entirely new pool of advertisers to stations, specifically those who don't have the media budget to afford TV spots but have the desire to promote their products and services with a station? After all, Google and other Web giants are transforming the advertising business in just that way.
“We certainly have used the new interactive platforms to attract some new categories of advertisers that have not done business with us in the past,” Gardner says, “but I would not say it's people who cannot afford what we have to offer. I just think that it's some categories where the use of a platform like a Web site, as an example, is a better fit for them because they may have the need to get deeper and more complex content out there, and that doesn't really lend itself to a 30-second commercial over the air. We haven't gone to that model of getting hundreds of new little, tiny advertisers involved the station. That's not to say we won't get there at some point.”
Regardless of the particulars in monetizing digital media, stations and groups will only realize success if they can adapt their methods, thinking and attitudes about online and mobile media to reflect the importance of new media to the overall mission of the enterprise, King says.
“All of these things are really meaningless unless the culture of the company has evolved to the point where it understands the importance of new media and the effect that it will have on the growth and future of the individuals in that company,” he says, “as well as the value to consumers and ultimately to the success of the company itself.”
Phil Kurz authors several Broadcast Engineering e-newsletters, including “IPTV Update.”