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Local media

The value of sharing knowledge, even when it’s not about your product

by drm on February 18, 2010

Over the past year, I’ve been encouraging our teams to have gain expertise about social media and have conversations with their customers about how these new tools can help them in their business.

Where I’ve met resistance is from people who ask, Why? Our business is advertising, and we’ve got print and internet products to sell. Talking about social media is off-point and doesn’t help.

My counter is that if we know a lot about something that our customers care about, we can help them, and that’s going to help us get into more conversations and have better relationships. And, I know from all my conversations that our customers and prospects are fascinated and perplexed by how to use social media tools in their business.

I found a useful passage in the conclusion of an industry report from Borrell Associates about real estate advertising that helps drive this point home.

Local media companies that can demonstrate a commitment to understanding their local markets more deeply than their competition, and a willingness to share that knowledge with local advertisers in a consultative relationship that is built patiently, with trust and respect, for the long term, will have the best chances for success. When a business is hearing from half a dozen ad media reps every month, it will take unprecedented focus, effort and resources to stand out.

Reading that made me ask myself, How many of our market representatives see the same value in sharing knowledge? And, how many of them feel confident about their own command of the information to share it with customers and prospects?

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Gannet Q1 results capture the challenges of local media

by drm on April 19, 2009

Picture 12.png Gannet’s business gives it great visibility into the health of the local advertising market, making its first quarter earnings call a particularly good barometer of what’s going on in local advertising.

Revenue dropped from $1.7 billion a year ago to $1.4 billion. Ad revenue was down 34% to $722.8 million. Operating income was down 49% from $327.6 million to $166.2 million.

In their earnings call, management was candid and cautious. They have a plan that they are executing in the midst of terrific headwinds.

A few things stood out.

There is no visibility on the business.

Craig Huber – Barclays Capital

You usually have a pretty good sense of how U.S.A. Today is going with forward bookings. I was wondering how that paper is trending with ad revenues in the month of April. And then also could you speak about daily and Sunday circulation volume, what the percent change was in the first quarter and separating out U.S.A. Today?

Craig Dubow (CEO)

Just taking a look as I said a little earlier, the visibility in particular is extremely limited. We are seeing as I mentioned, a bit of leveling as we move forward but I would suggest at this point that April continues to have a very, very limited view as to what we’re seeing at this point.

Classified revenues are down dramatically.

In classified advertising, here too trends we highlighted through February continued into March. Declines in auto, employment and real estate were roughly 39%, 62% and 61% respectively. The exchange rate however, negatively impacted our results in the quarter. If you exclude the impact of currency that would have moderated revenue declines in each of the classified categories I mentioned by an average of about five percentage points.

While this is a cycle, building a multi-platform asset will help the company increase their benefit during the inevitable, but as-yet un-seeable, rebound.

Timothy Stabos – Stabos Asset Management

With the common stock at $3.65, the belief it seems is that you’re not going to get these ad revenues back. As a shareholder, I have my own opinion on that, but I think it’s important for management to go on the record. What percent of this decline in ad revenues in the view of management is secular versus cyclical?

Craig Dubow

We have talked a lot about the cycles that everything is going through. We are I think up front in suggesting that there has been a portion of secular change across the board here and certainly when you look at moving through that, we will then begin to cycle clearly on the real estate side at some point here in the near future or in the future. Let me not term it as near.

But we will see that cycle. And I think there is a combination. The clear message here is why we’re trying to ramp as rapidly as we can on the digital side. We know where our core is. We are trying to make certain that we are going to be on the multi platform opportunity at this point so we can take advantage then from both directions.

Our believe is that if things are leveling a bit, hopefully sometime at the end of the year and beyond, we may begin to see some advertisers poking back into this in some pretty significant ways, but all of that is to come as we look to the future.

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