These are the ingredients behind our new advisory service, “Digital Strategies for Broadcasting.” Technology can drive new workflows; partnerships; revenue streams and in doing so challenge existing management and operational structures and processes. Running a broadcast company with digital media assets is quite different than running a traditional broadcast property.

BIA itself has taken the “digital plunge” with its acquisition of The Kelsey Group which extended our expertise, knowledge and relationship base into digital media. With the launch of DSB we are leveraging those resources along with the expertise, data and services BIA has served the broadcast industry with since 1983.

The explicit goal of DSB is to help our advisory clients develop and execute their digital strategies as successfully as possible. This may mean broadcasters but it can also mean assisting those firms elsewhere the local media ecosystem looking to understand and work more productively with broadcasters as partners, service providers or vendors.

For more information about Digital Strategies for Broadcasting, click here.

Click to register for our free Webinar on Tuesday, March 16, Digital Strategies for Broadcasting: Capitalizing on the Shift to Local and Digital Media.

For example, Fox Digital Media’s Jon Cody told OTTcon, “this year 50% of initial broadband connections will be wireless and 19% of viewers will connect their TV sets directly to the Internet.” The impact of OTT is most pronounced in the 18-24 demo, many of whom only do OTT and have never had cable or satellite subscriptions. These topics are being explored, debated and even somewhat resolved among attendees and speakers at OTTcon 2010 (http://www.xmediaresearch.com/ottcon/index.htm) in San Jose, California this week.

OTTcon defines OTT as Internet video delivered to the television set versus PCs, mobile video players or other devices. That’s a critical distinction because in media distribution, the end user device or set top box defines the business model by controlling the consumer interface. So as new boxes and applications get attached to the TV set, the business models will change. OTTcon has an incredibly diverse attendee mix of which is reflective of this new ecosystem including exhibitors such as Amdocs, Bandcon, Fox, BitRouter, Hillcrest Labs and Avtrek .

OTT is something local broadcasters should pay attention to. Video distribution business models are tied to the device and the device ecosystem is fundamentally changing. This will drive new relationships and reorder existing relationships. Just as local broadcasters do carriage deals (must carry and retransmission) with cable and satellite operators today; they must work new deals in the OTT ecosystem with those companies controlling the devices and consumer interfaces. This is becoming more critical as OTT becomes a dominant distribution paradigm already challenging cable and satellite in key demos.

Local broadcast television stations have been bound to the cable and satellite business models for distribution and access to a majority of their viewers through must-carry and retransmission. Cable and satellite operators provide the distribution networks but it is really their set top boxes that defines their business models by controlling access to their networks and services. The challenge OTT brings to the mix is that new types of set top boxes are connecting television sets to the Internet and this breaks open the ecosystem that has grown up around the television set.

Boxee (http://www.boxee.tv/) is an example of an OTT company redefining the business model around the television set. Boxee’s Andrew Kippen told OTTcon attendees that, “Boxee is a free software interface for interacting with television set content. This provides low friction for consumers and makes it easy to get entertainment in one place.” Boxee’s goal is to aggregate local content, make it social, offer 300 different applications, with a browser-based experience on the TV. This is the kind of company local broadcasters might work with to become a force to contend with in OTT video.

BIA/Kelsey’s new “Digital Strategies for Broadcasters” advisory service will focus on OTT video as one of its core coverage areas. For more information on this service, see xxxxx.

# # # # # # # # # #

Digital Strategies for Broadcasters is BIA/Kelsey’s newest Continuous Advisory Service. The focus of DSB is to analyze, assess and anticipate how the changing local media landscape will affect the broadcaster community and its supporting network of vendors and technology providers.

DSB will officially debut in early March 2010. We’ve already launched the companion event, “Digital Strategies
for Broadcasters,” which will be held in Jersey City, New Jersey, May 17-19. For more information about DSB, please contact Steve Passwaiter at (703) 802-2973.

BNET recently featured Harvard Business School professor Ranjay Gulati, who wrote a new book titled “Reorganize for Resilience: Putting Customers at the Center of Your Business.” In his book, Gulati points out:

“In a marketplace like today, customers have more choices and more information, and services start to look like each other, in what we call a sea of sameness. If you don’t have an ability to transcend beyond the features and functionality of my product versus yours, then you have a problem.”

Gulati points out the fallacy of the notion that media companies are currently consultative and customer focused. Many media sales teams feel if they are asking a few questions about the business and their expected ROI from their marketing efforts that somehow this constitutes consultative selling. Put simply, salespeople are saying “I’ll talk about your needs so long as it leads to you only buying my portfolio of solutions.” Gulati’s point of view is “Most organizations believe they are customer centric when they are asking questions, but they’re communicating with customers through a product lens (with a pre-determined end in mind).” Instead, Gulati says “companies must ask deeper questions such as what problems they are dealing with and what issues are happening in the life of my customers regardless of the solutions the sales person is offering.” The goal in asking probing questions is to help the advertiser better articulate his or her needs so sales can get them met.

Consultative or collaborative selling is about transparency and building solutions that fit the customer’s needs and not necessarily the media company’s balance sheet. If a salesperson is aiming to sell a specific product set, and is willing to un-sell other potential solutions, then this version of consultative selling is merely disguised as the same transactional selling of old — all paths lead to a limited solution. Media consultants recognize there are many media options available to advertisers and that at times their portfolio of media offerings has to co-exist or complement other media and at other times they must fight to win budget from media that may not be as effective or is receiving too large of a share of an advertiser’s budget. Being able to counsel local advertisers on media strengths and weaknesses means salespeople must learn about all types of local media to be effective in selling their own portfolio of media options.

Local advertisers are much smarter about where they spend their marketing dollars because they have access to more information than ever before and have tighter ties to peers through social networks who can offer additional guidance. Salespeople used to be the source of information about what was happening in the local marketplace but now they are one of many sources available. If a salesperson cannot deliver value beyond what an advertiser can access on his or her own, then he or she has very little to offer. True media consultancy is the path where more peer-to-peer relationships are developed. Based on BIA/Kelsey’s Local Commerce Monitor study, 48 percent of SMBs want their media rep to help them understand their media options and make the best choice for their budget among the confusing array of new media choices.

While many media sales organizations are looking at incremental changes to their sales processes, those that are savvy and understand that local advertisers have changed and that the sales role must change are the ones that will thrive. The reality is the market has already changed and it is up to each media company to understand how to recraft its sales strategy and put together a consultative media sales team that understands local media and can be the media guide local advertisers are seeking. It’s time to stop making consultative selling a sales tactic for getting the advertiser to talk and use it as a means for building a relationship, creating value and developing media plans that work for the benefit of the advertiser and leverage their existing marketing activities. If consultative selling fantasy can be turned into reality, media outlets stand to make significant revenue gains and gain a larger, more loyal base of advertisers.

For broadcasters, it is an article of faith that “localism” is a point of differentiation that adds value to their operations. Localism tends to mean local news, sports, weather, traffic, local events, coverage of local government and other promotional and volunteer involvement in the community. There’s a lot of chatter about what it takes to succeed with true “localism.” This past year has seen some notable localism failures. Other efforts are in a nascent stage

One case in point is Allbritton Communications, based in the Washington DC-area. Its television stations are affiliated with ABC, with the largest property being WJLA-TV, the ABC affiliate in the Washington, DC market.

Our primary interest was the fall 2009 announcement of Allbritton’s plans to launch a Washington, DC focused news site that will combine with the WJLA and NewsChannel8 television and web operations. To launch this new local news site, Allbritton hired Jim Brady, the former editor of Washingtonpost.com, The site is set to launch in Spring 2010 and will have about 50 more news staffers on hand.

We recently talked with Allbritton’s SVP of Legal and Strategic Affairs Jerry Fritz, who supports Robert Allbritton (the family-owned company’s Chairman and visionary) and Fred Ryan. These three executives are the key architects of this strategy. Fritz has a long history with the company that spans more than twenty years.

While the timing seems very fortuitous, Jerry Fritz tells us it’s really the culmination of a plan that was devised back in the late 1980s, when Allbritton (who used to own The Washington Star) saw an opportunity to build a strong local franchise to compete with the newsgathering prowess of the Washington Post.

The first effort under the plan was the launch of NewsChannel 8 distributed over local cable systems. NewsChannel 8 was, at first, a separate operation from the local broadcast television station. A truly, locally focused news operation; NewsChannel 8 broke down its news for the area’s three separate and distinct geographies with a mix of local, lifestyle and political programs. It was a pioneer and in its early days, NewsChannel was a tough sell for audiences and advertisers. Its programming and appeal have grown as the product has matured and its mix of local news and lifestyle shows (Political talk to local golf) now attract larger audiences plus a mix of larger and smaller advertisers. NewsChannel 8 also has benefited from the growth in the news product on WJLA. WJLA has completely rebuilt its local news operations following a downsizing many years ago.

From its base in local television, Allbritton leveraged its core assets across media platforms to exploit some of the unique attributes of the DC market

That included developing an online newspaper to address the market opportunity of providing news, commentary and an advertising vehicle to government contractors, lobbyists, trade associations and others seeking to influence the nation’s seat of government.

Politico.com, designed to be the ESPN of politics, was Allbritton’s initial online effort under the new strategy. While Politico was designed around the Web, readers and advertisers clamored for a print counterpart. Allbritton responded with a three times-a-week print product that was quickly ramped to five days.

Since then, Politico has created a national network of newspapers and websites that share Politico stories in exchange for web ad avails, which Politico sells to national advertisers. It is a classic win-win.

In fact, Politico’s timing has been perfect. Many newspapers have closed their DC news bureaus, and local newspapers are struggling to fill the news gap. Recent filings with the SEC have detailed just how successful the operation of Politico has become in a relatively short time as revenue has topped the $20m mark and cash flows have reached seven figures.

Now, both WJLA-TV and NewsChannel 8 share facilities and some staff members as they gather, collect and present local news and information to the DC market. Adding Politico, the Allbritton operation finds itself as one of the country’s leaders in the gathering and dissemination of political news. That has positive rub off impacts on both WJLA and NewsChannel 8. Washington is still very much a company town.

So, it’s in the same vein that we look at this soon to be launched local news oriented website. Adding fifty journalists to an operation that already includes a prominent local television station and its cable news spinoff plus the acclaimed Politico gives Allbritton’s operation one of the largest news gathering operations in the market. As the company focuses on enabling its journalists to file news across any platform, it’s easy to see the combined Allbritton portfolio giving some heartache to the Washington Post (and few know that property better than Jim Brady). The company just recently brought a senior sales executive to lead the advertising sales effort for the new metro new site.

Allbritton already has a deal in place with the market’s leading news/talk radio station as well to share content and to provide weather reporting from its team of meteorologists. While it doesn’t seem that Allbritton wants to get itself imbedded into the longer view stories that the Post covers, it does seem that there’s a probable audience for hurried Washington audience members who want to get the news in an easy, connected and time saving way.

The Allbritton mission is to produce and serve unique content which has appeal beyond the Washington market. The plan is to capitalize not only on local ad spend across broadcast, cable, print and online platforms but also to get access to content syndication and barter ad inventory nationwide. Allbritton understands that it can be profitable to serve not only local audiences and advertisers well with smart execution but that this entire operation can be leveraged to grow out of market revenues. Could this example serve as a possible model for other broadcasters looking for a digital strategy that actually makes money!

Colin Pape, Co-Founder/President of ShopCity.com, an early stage Internet company, has a vision, “imagine finding prices for any product or service offered within your community all on a single website.” That’s what he’s doing with his company. ShopCity’s business model is working with local businesses and putting, pricing, availability, hours of operation and methods of payment in the ShopCity.com marketplace to facilitate local purchases. ShopCity.com provides small businesses with a package of advertising services, sponsorship opportunities, a suite of online business-building tools and a local marketplace they can buy and sell through that is heavily promoted in the community.

Small businesses are often eager to consider advertising online but they are attracted to a more complete local market solution that includes on-air, events, and other local points of presence in the marketing mix such as outdoor signage. “Small businesses want to be on the Internet but they’re reluctant to pay for an intangible Internet presence that’s just online – however, when you combine online with in-community advertising – whether it’s signage, radio or TV ads – something they can experience offline, the equation changes,” Pape says. ShopCity wants to drive additional success by partnering with local radio stations to leverage their brand credibility, ability to reach key demos and local sales forces. In return, ShopCity offers a compelling digital solution for radio stations to add in to their mix. ShopCity typically does revenue split deals.

ShopCity got the idea of working with local radio stations from a Midland, Ontario radio station. The Dock FM was looking for a unique angle to bring to its multiplatform advertising efforts and an ability to get a “call to action” for its advertisers. Since the station kept bumping into ShopCity’s sales reps, The Dock FM’s Sales Manager reached out to see about a partnership. ShopCity saw the possibilities and agreed to work with The Dock on ShopCity’s ShopMidland.com site, offering free profile pages to radio advertisers as a value-add, and with the station promoting a co-branded sub-section where businesses could get a special discount while the Dock earned revenue share on paid packages.

ShopCity is looking to develop the model further and is seeking broadcast partners that are already running ‘shop local’ oriented campaigns. Says Pape, “I see huge potential for radio stations and community-branded web platforms to come together to create cross-platform value for each other’s medium. Radio plays an important part in our strategy moving forward.”

On the media side, key issues include finding viable business models; understanding the mobile ecosystem well enough to make informed decisions regarding content, revenue models, technologies, services, partners and market opportunities.

On the advertising side, brand managers, agencies and small and medium business (SMB) operators are trying to be smart with their media plans and spending allocations among multiple media platforms to drive the purchase funnel. Making the mobile platform even more challenging in the consumer environment is the fast pace of evolution not just in technologies but also in how consumers and businesses are adapting to the mobile environment.

BIA/Kelsey has conducted three waves of “Mobile Market View” (“MMW”) which is a consumer study of U.S. adult mobile phone users in the fall of 2007, 2008 and the latest results released in November 2009. One of the key emerging trends we see in the latest research is a solid consumer movement toward using the mobile platform for non-voice communications including search, text messages, email, video, social networking and mobile web browsing. We see fast growth continuing in adoption of smart phones (29% of consumers now have smart phones) and data packages (37% of mobile users now have data plans).

Based on consumer trends, we see revenue growth for content, search, directory, ad networks and of course mobile service providers. BIA/Kelsey sees the fastest revenue growth occurring in local search and mobile video services. The high trajectory revenue growth model will be advertising but we also see subscription and content on demand services as strong components of mobile revenue mix.

For advertisers, agencies and brand managers, this growing use of mobile has significant implications for their media strategies. From 2007 to 2009, consumers have essentially doubled their use of the mobile platform for non-voice communications. This represents a fundamental and rapid shift in media use which needs to be considered in determining the appropriate mix and spending levels among local media platforms. Media companies that do not currently offer a differentiated mobile advertising option increasingly will find it difficult to satisfy advertisers drawn to mobile’s ability to drive brand metrics such as increased awareness of advertising campaigns and messaging. Ad messaging can include not just search and mobile web but also video as we see nearly a fifth of mobile consumers have received or sent videos each month.

The mobile platform is becoming integrated into consumer habits in a more pervasive and sticky manner than any other medium in history. It is fast becoming a mission critical part of the media industry for publishers and advertisers.

Article prepared by Rick Ducey, Ph.D., Chief Strategy Officer, BIA/Kelsey

First published in ShowSmart, a publication by NABShow, which can be read at:
http://www.nabshow.com/2010/email/ShowSmart/LandingPage/ShowSmart_issue2.html#3

John has been a remarkable force of innovation in the Yellow Pages industry. He anticipated the rise of electronic media and its impact on the Yellow Pages and small business marketing around the world. He worked tirelessly to help incorporate Yellow Pages into the world of contemporary online and mobile marketing. And, he created a community that brought traditional media and new media together.

John and Pam Kelsey have been very good friends and mentors to many of us at BIA/Kelsey, and they will be missed. But they are as pleased as we are about all the exciting new things we are doing in the new era of BIA/Kelsey with mobile, marketplaces, local search, traditional media and yes, Yellow Pages.

John and Pam – Thank you!

Tom Buono is the CEO of BIA/Kelsey

So, the good news.

2009 is over. Thank God.

We head into the New Year severely chastened by the historic revenue declines of the current one. The numbers for 2009 don’t bear repeating. They were several shades of awful.

There are signs of a modest ad economy recovery as we enter January 2010. The broadcast networks are reporting an active scatter market. This makes the network execs that decided to hold back inventory at the upfront look like good market callers. Some of the larger radio groups are reporting a decent December assuming that flat is the new up! Online ad activity is regaining its health as well after a down year on the display side.

The American consumer seems to have provided the retail community some good news in the recently concluded holiday shopping season. The longer term outlook on consumer spending seems a little mixed but let’s take the good news for what it is.

We’re also coming up against weakened 2009 comps but that’s a mix of good and bad news. So, upward pacing cheers will be balanced by the knowledge that these positive pacings are for revenues more reminiscent of the late 1990’s. Depressed ad rates could be bolstered by some advance in demand but how much remains a mystery. Advertisers are still wary of the economy as unemployment will remain high for a while, and that will likely mean any advertising rate increases are going to be the result of some intense negotiation. That won’t be a change from 2009!

A lot of businesses large and small decided to cut back and/or sit out advertising in 2009 but it seems that more positive psychological changes are present in this community. Business owners know that they need to re-invite consumers through advertising campaigns into their showrooms in order to generate sales. The survivors of the Great Recession need to let consumers know they’re still around. There’s still business to be had but it will need to be seduced in no small part by solid and effective advertising. Can your current sales operation make that happen?

There’s some optimism for 2010 revenues as the nation prepares for its first mid-term election during the Obama presidency. Given the tenor of recent legislative battles in the halls of Congress, increased citizen advocacy, some historically poor poll numbers for this particular Congress plus an economy that is still in turmoil, this coming mid-term election is red hot and looking very competitive nearly everywhere across the country. With all 435 House seats, more than a third of the Senate and Gubernatorial races in states like California, Texas, Florida, New York, Illinois, Pennsylvania and Ohio, it’s a big, big year. This has generated the usual estimates of billions of political dollars in play spread out over several early year primaries and the November election. This is great news to parts of the media business that have seen more than its share of suffering this year. If true, these projections can put a big 2010 Band Aid on a business that needed a tourniquet in 2009.

But what about 2011 when all that political money disappears and we’re back to the normal advertising marketplace? It would seem that the additional revenue in 2010 is a perfect opportunity for traditional media companies to address their shortcomings on the sales side of the industry with both the traditional and digital sides. If you’re not happy with the ups and downs of the odd-even year symphony that’s become our business, perhaps 2010 is the convenient time to address that. The best time to fix the roof is when the sun is shining!

There is an opportunity in local media markets for someone to unlock the mysteries of the new advertising universe to businesses in pursuit of customers. With all the new advertising opportunities available in the market today, advertisers are confused on how these can help their businesses grow. A number of advertisers were confused about the traditional media choices, too. As to this new mission, no one is quite there yet. Those who get there first and show meaningful and sustained results will be the winners of a large share of local ad dollars. The question for media companies is: are you going to be the first or let a competitor get there before you? With self serve advertising options now becoming more commonplace, it will be up to local sales staffs to add value and results to ad campaigns. Otherwise, local merchants will have the ability to do the work for themselves! Not a pleasing prospect.

A recent study from the ANA and b2b Magazine shows that 2/3rds of marketers have added social media (Facebook, LinkedIn, Twitter, etc.) to their overall media mix. Where is the budget from that coming: traditional media budgets. Only 26% of marketers indicated that they’d established a separate social media budget that didn’t come from the traditional media side of the ledger. How long before your clients do the same? The word of the day for marketers is flexibility. “As more media platforms become available, it is imperative that all marketers continue to assess their capabilities and select the platforms that are best suited to help them meet their brand’s goals and objectives,” said Bob Liodice, president and CEO of the ANA. “With this proliferation of media, marketers must work harder, survey the entire landscape available to them and create their brand’s most optimal media mix.” Hard to argue with that but can anyone explain this to local marketers? It’s time for local media sellers to step into that gap.

While we’ve all had our share of advertising agency adventures over the years, the simple fact is that your sales staffs are going to have to take more of that platform agnostic mentality to effectively service direct local clients. The days of a single platform sale will become less common as we move into the digital age. Our local sellers are going to have to be able to construct ad campaigns that make multiple platforms work effectively in some synchronicity.

Have you given your sellers the proper training to ask the right questions so they get critical data from clients and prospects to make that happen? Do you have the resources necessary to help the seller navigate the creative elements of an ad campaign that makes the difference between an effective campaign and one that isn’t? If you can’t answer either question in the affirmative, the time to act maybe right in front of you. If you can’t, then now will be the time to reinvest in that sales training. It’s not easy to commit significant resources coming off a year full of down revenues and massive layoffs but what’s the price of not making the investment?

Best wishes for a successful 2010 and beyond!