Company: The McClatchy Company
Markets: Kansas City Star and Fort Worth Star-Telegram
Initiative: Sales of packaged digital services
Key executive: John Jordan, Director of Digital Revenue Development; Zella Bracy, Revenue Manager for Strategic Initiatives
Challenge: The McClatchy company has sold digital display and SEM for years. But companies that package digital services around results - such as Reach Local - were gaining ground and proving a new, promising model for filling new needs of local merchants. Yodle, ReachLocal, LocalEdge and an increasing number of YP providers all use the concept of selling basic digital services and reporting trackable leads. In 2012, McClatchy decided to create a "best of breed" project to compete in results-driven digital services space.
Strategy: Mclatchy's strategy aimed to meet four main goals:
1. Provide a robust results-focused digital "one stop-shopping" product mix for small- and medium-sized businesses.
2. Include a customer-facing “engagement dashboard” designed to demonstrate ROI.
The core services packaged by the division include:
• Display ads for online and mobile
• SEO via landing pages
• SEM purchasing of both Facebook targeted content and search engine key words
• Reputation intelligence
• A customer-facing dashboard that integrates reporting and shows leads generated
Phone tracking numbers allow some print advertising campaigns to also be included in the dashboard's reports - especially for categories with call-in business such as home services, doctors and beauty salons.
Another key criteria is that the division stay nimble, so that services provided in the "one-stop shopping" can be added and subtracted.
Finally, the ability to quickly create a central landing page streamlines the conversion process and allows optimization across media channels.
Here's the new product wheel:
Some of vendors were already in use, such as MatchCraft which supplies hosted landing pages and an SEM buying service that places orders using a proprietary algorythm. VendAsta is the reputation management platform and TruMeasure was added as a source for monitoring leads from calls and post-click activity on landing pages. The final group at launch:
Buidling on its existing skill sets, McClatchy's promotions refer to SEM as "the new Yellow pages" and "the last click before purchase." The display advertising focuses on the ability to supply targeted audiences through Yahoo.
Reputation management and Facebook targeted-content ads are new and paired together:
Creating a universal landing page with both SEO and converstion capabilities, that would appear across devices has been challenging. Currently the team uses several vendors, all pulled into the one dashboard that shows calls and emails, as well as clicks and impressions.
A seperate landing page - as opposed to driving traffic to the merchang's site - is is a key benefit because it "takes users straight to the information/offer so you don't lose them;" "Helps elevate search engine quality score" for SEM;" and "Incorporates inter-active tracking elements" captured by TruMeasure.
On the road-map, McClatchy plans to partner to create universal landing page that is responsive to multi-devices and has both SEO properties and conversion tracking. Since SEO is responsive to more content and conversion responds to simple, visual funnels, the ultimate landing page is a combination of trade offs.
2. Customer-facing dashboard
A key innovation is a customer-facing dashboard that shows leads as well as impressions and click-throughs. McClatchy executives wanted a white-labeled dashboard to provide a report that is as close to ROI for the campaign as possible. To achieve this end, they partnered with TruMeasure.
TruMeasure already supplied some kinds of tracking via a slick dashboard that reports both post-click activity on landing pages via reverse proxy, and deep information on phone call-ins, such as time and day of call, caller ID and number, length of call, and call-recording, on a campaign by campaign basis. In addition to leads, the new dashboard now shows "impressions-based" readership information from Scarborough's numbers.
Calculating both leads and traffic accounts for the full value of the campaign. Please see four "results" screens from the dasboard in images to the right, click to enlarge.
3. Pricing and packaging to increase active ads and overall digital revenues
The go-to-market strategy requires four month packages, which allows "the plan time to reach its full potential," "to optimize to top performing channels" and allow the algorythms to ajdust to new SEO and SEM buys.
• Tier 1. All packages include reputation management, landing page with tracking, a call tracking number, and 220,000 impresssions for Facebook targeted display ads for $299 for four months.
According to Bracy, Facebook targeted display ads are "incredibly inexpensive" because of low click-through-rates, but also "incredibly powerful for branding." The package takes advantage of this factor.
• Tier 2. Adding a service that purchases ad for targeted key words in the top search engines moves the package price to $499.
• Tier 3. To add display ads with 37,500 impressions on the newspaper site raises the price to $799.
• Tier 4. Addition of 20,000 mobile impressions yeilds a $999 a month price point, and an additional 18,750 Yahoo targeted ads is $1499.
The roadmap of new products that can be inserted into the mix include Facebook custom pages and management, video and email marketing.
Sales of products with low price points demands an aggressive sales culture. To test sales of ImpresLOCAL, Jordan selected two markets: The Fortworth Star-Telegram and the Kansas City Star.
The Fort Worth team used the existing sales staff to launch sales of the new packages, with a goal for each rep to add one active account per month. "The fits with our goal to increase active accounts as well as to create products that work for merchants," Jordan said.
Kansas City is experimenting with a direct sales team in addition to its existing team. "We know that to really grow the business we need to have direct teams," Jordan said. Direct sellers have a requirement of six accounts per month.
Since Reach Local had problems with high churn rates, Jordan's direct teams use a "hunter/farmer" model. The "hunters" close accounts, and hand them off to an account manager within four weeks. Account managers are estimated to max out at around 50 accounts.
Reps also use a SalesForce based crm system, with extensive training on moving new customers through the pipeline from prospecting to needs analysis proposal and sale.
• While the program is still new, about half the direct sales force is achieving the six sales a month target.
• At the $499 a month model with a 20% churn rate, an annual account would be worth $4790. A direct seller producing 3 sales a month for ten months will generate about $172,440 first year. Top sellers will produce in the range of $250,000.
• Sales of print have resulted from selling the packages, including upsells over and above package levels.
• Sales reps have experienced multiple "saves" of renewal orders by showing the leads reports.
•"One of the things we found, and that many of the Local Edge groups found, is that creating sales teams from scratch is a lot of work and good excersize. The approach to business is different, it's much slower. We are using this as a training ground for when we launch companywide," Jordan said.
• The experiment reselling ReachLocal in one market is also useful in learning how to use post-campaign reporting to prove ROI. "One of the things that we liked is their ability to provide extensive reporting. We are good at selling display, Reach Local is good at selling SEM, so we are experimenting buying SEM through them (in one market), " Jordan said.
• The digital services program fundamentally changes the relationship in ways that are not quickly grasped by sales reps. Advertisers who originally wanted to cancel have doubled or tripled the buy when they saw reports showing the real ROI on the campaign.
McClatchy's experience is similar to other local media who have embarked on sales of digital services: The close cycle is slower than for selling display ads. On the other hand, this project moves the media company into the center of small business demand; it is almost impossible for most merchants to acquire the kind of complex digital marketing they need at the ROI offered on their own.
Other companies including pureplays are have reported year gains of $175,000 to $220,000, with third year sales in the $350,000 to $400,000 range and account lists handled by one rep as high as 75 or 80.
Off-setting these advantages is increased competition from pure plays as well as other media offering simillar services. Unlike daily deals however, digital services are not optional for most businesses, but part of survival in the digital age. The battle for "hearts and minds" of local SMBs starts there.
McClatchy is also an example of how media can start by utilizing existing competencies and vendor relationships - in this case familiarity with SEM and display ads - with new services.
Finally, investing in Trumeasure to address the underserved dashboard space, where ClickFuel is currently the market leader, is a winning strategy.
SEM - MatchCraft
Landing pages - MatchCraft, Verve, VendAsta
Reputation management - VendAsta
Dasboards, call-tracking and post-click activity tracking - TruMeasure
Many thanks to John Jordan, Director of Digital Revenue Development; Zella Bracy, Revenue Manager for Strategic Initiatives and to the Local Media Association for inviting Jordan to present at the Fall Publishers and Advertising Directors Conference.