Freedom Interactive President Michael Mathieu told attendees of Piper Jaffray’s Global Internet Summit last week in Laguna Beach, CA that his sales teams are focusing on selling a broad array of local marketing products to medium-sized businesses (i.e. a notch below newspapers’ typical focus on large local advertisers, such as auto dealers and health care providers).
Freedom, the 5th largest privately owned media company, is most notably the publisher of The Orange County Register. It has 28 daily, 23 weeklies, and 13 TV stations scattered across the country.
In Orange County, Mathieu notes that he’s working with 176 sales people from the newspaper, supplemented by local ad specialists from LocalLaunch and WebVisible. His own team at Freedom Interactive is 70 strong – a rapid ramp-up from the handful that were in the division prior to Mathieu’s arrival.. The division has been profitable since his arrival, but dot com revenues are quite far from a 1:1 conversion from traditional media, he notes. Some analyst firms have said that conversion rates, industry-wide, are worse than 10:1.
Mathieu, a dot-com veteran from United Online (i.e. Classmates.com, NetZero), says newspapers continue to have major strengths that elude dot-commers. “Newspapers have a tangible result” from coupons, for instance. But online, local doesn’t ride on CPMs, he says. “newspaper sales are “just getting to the banner stage. It is still about people coming into the mattress stores and getting a $1,000 mattress.”
He also notes that Freedom has been getting progressively involved in mobile. “Users get a push profile of mobile content. But the challenge is to monetize it.”
Smart move by Freedom Interactive to go after medium-sized businesses. For those local advertisers out there who can’t afford offline rates, online buys are a solid way to get associated with trusted local media brands. From the publisher’s standpoint, it’s not just incremental revenue but a way to get new clients in the door.
It will be interesting to see how margins hold up as the sales force travels down the local advertiser long tail.
Regarding “tangible results,” one has to imagine that, once advertisers and agencies get past their obsession over click-through rates, online conversion measurements will be deemed far superior than trying to track down whether a print coupon was used at the local furniture store.
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