Newspapers can’t expect to beat Yellow Pages or Google in broad local advertiser categories, but they can focus on niche areas and invest in human editors and SEO to bring out their real strengths in the local marketplace, according to Jay Small, who is E.W. Scripps Newspapers’ director of online audience and operations. Small was speaking on a panel (moderated by Greg Sterling) at the NAA Marketing Conference Jan.29-31 in Las Vegas.
“Sure, Yahoo and Google will drain some revenue from the local markets. But we’ll do well in other categories,“ says Small. “We really improve our chances of success if we focus on a niche, like a business directory. When we try to go up against an incumbent Yellow Pages player, or a Google, we end up spending all our time trying to keep our listings up to date. “
Small feels that a critical key to newspaper success with local advertisers is their use of human editors, who can see connections with local guides, advertisers and newspaper content that Google and others may not. (In this regard, Scripps is very much on the same track as Boston.com). He additionally notes that Scripps has invested in a couple of staffers for SEO of content and specialty classified interests. “Human editing is the newspapers’ differential, he says. Otherwise it is difficult to match up content with standard Yellow Pages categories, etc. “But attracting good SEO people is very expensive. “
People used to say how the Internet will enable the little guy to compete against the big guy. I have always taken the opposite tack: the Internet enables the big guys to pursue the smallest niche that previously was not high-margin enough to pay attention to. If the newspapers produce something at the local level that works really well, there’s nothing to prevent Y or G from devoting just a small fraction of their total resources to steal the market from that niche player. The newspapers have lost utterly; they just haven’t fully come to grips with that fact. Also, it’s fairly common knowledge that Google uses human editors to flush spam out of their search results on “head” queries on the long tail curve, so I don’t know why these guys think that their human editors give them a qualitative advantage over G.
Mark, the newspapers for years have produced something at the local level that works really well — the printed newspaper. Yes, key metrics are in decline, but it is still a good business. The reason newspapers have been so defensive against a wide range of local online products all these years is that they have traditionally had such a good business to defend.
Pure online plays seem to do a good job of chipping away at newspaper market share of data in a given category (jobs, cars, homes, retail, community news etc.). But they do so on an order-of-magnitude smaller cost and revenue structure. The outcome is value destruction in the advertising economy — less money to be paid and made overall.
No technology, no automation, no user-provisioned content initiative I’m aware of fully overcomes the change in ratio of content cost to advertising revenue when content-driven businesses move online.
Stay with me a moment here. You are correct that the big search companies use a variety of human-operated methods to improve the perception of match quality in search results. But those people are not placed in local communities for the purpose of management and enrichment of local data. They are hired to improve perception of their core products, where advertising revenues are derived from that match quality.
I get your point that local editors are a competitive advantage only as long as a global brand chooses not to invest in them. But I have not observed much interest from the Googles of the world in putting people in local markets to deal with local listings or even customer support. So far. I believe that reluctance has much to do with the comparatively small advertising market base for these products as they exist today.
The search portals’ investments in technology development and acquisition are indeed daunting — but those are economy-of-scale investments, not commitments to compete against local media with people in local markets.
True, all that could change if the economics change. Right now, however, we have more competitors fighting for leadership in the online local search world than the money generated in that world supports.
While that competition plays out, the newspapers already have good human resources in their local markets, should they choose to aim some of them at enrichment of searchable local data. My point is that we still have that advantage, derived almost entirely from the continued profitability of the print business, and should use it to grow competitive and enduring local search products.
It may be in your best interest to believe the newspapers have “lost utterly,” and in mine to believe we have not. I would not be quick to assume, however, that the whole industry is just ostrich-heading against some inevitable outcome.