local media insider
Case Study

Small market inhouse agency leverages public relations for profits

Kelley Square Communications was created from existing staff and outsourcing

Alisa Cromer
Posted
The new agency and it's services; please click to enlarge.

Owner: Holden Landmark Company

Media: Worcester-based group of five non-daily print media, including monthly Worcester Mag, an alternative weekly, and three maintream weeklies, all with web sites in central Massachusetts. The largest city and home base is Worcestor. 

Initiative: Kelley Square Communication, an inhouse ad agency

Key executive: Gareth Charter, Publisher

Summary: Headquartered 35 miles outside Boston, Worcester is a city small enough to dispense with stop lights,  Holden Landmark Company owns a small group of weeklies and employees  just 45 people. Too small for an inhouse agency? Not if it is created carefully. 

The group organized an inhouse agency from existing staff and outsourced vendors in January, 2012. Early results and receptivity from the market has been promising. The model, aimed to win account who have not considered agencies or can't afford their fees. The inhouse agency provides public relations, loyalty programs, reasonably-priced graphic services and simple web design - around which marketing campaigns can be built. First year revenues are estimated at $100,000. 

Challenge

Even in a small market, Holden Landmark executives saw how disintermediation was affecting merchants by creating a direct line of communication with customers - and a dizzying array of new marketing opportunities. An inhouse agency would give the media company a "chance to play offense" by leveraging their trusted brand, but selling a new set of services. Still, the company was smaller than even a small daily. 


Strategy
Charter began his research by visiting Kingsport Times-News' digital agency, Times Digital Group. Like TDG, Worcester's new agency developed its own brand, Kelley Square Communications, as well as a slogan, "Its chaos out there. We can help."

However, because of the small size of the company, Charter took a more cautious approach to the start-up.  While Kingsport publisher Keith Wilson, advocated hiring videographers from the get go,  Charter chose to out-source videography (to a New England and D.C. videography company Cinestories.com) as well as any services that could not be provided inhouse.  "It might take two years to get a return on (an inhouse videographer)...This  is not a one size fits all proposition."

Charter identified key internal assets: One sale team manager with agency experience, senior designers were capable and happy to do more interesting work, and a sales team that embraced having more possibilities to offer to clients. And Charter himself was a key resource, since as publisher he heads up the group, a key factor in small market agency launches because of the deep relationships publishers have in the community.

At the end of the day, outsourced services (technology partners are listed at the end of the report) included:

•Video production 
•Simple Website development 
•Merchant Services 

In-house services rely on staff talent including:

•Design/Creative Services
•Public Relations  (both in-house and freelance) 
•Event planning

A key mandate for the team was to be able to scale up and down easily; that is to be able to take on a large account immediately, but not have high paid staff sitting around waiting for that to happen. 

Web development

Rather than hiring programmers for custom web design, which is difficult to price and manage from afar, they chose to use templated designs, outsourced to  Ownlocal.com, an Austin, Texas-based company.  Designs come in three-flavors:  bronze, silver and gold packages. Pricing is zero upfront costs, so clients start paying a monthly fee. 

Public Relations

There was another key opportunity "underneath local agencies with larger overhead and higher prices." 

“We are the recipients (of public relations) so we know what's not being done," Charter says.

"We had an epiphany.... merchants are paying $1000 a month to get (press releases) written and they are not followed up on. We do the writing, send it out, and follow up with a call. Then if it is published we provide the link to show the results."

The price structure for press releases is "as low as a $150 per month fee to the client with a 6-month commitment and 50% upfront," that is, a  $900 total commitment with $450 upfront. 

Customer loyalty cards
Customer loyalty programs sold to merchants are another new way to sell disruptive practices that allow merchants to control  marketing to their clients. The key back-end vendor is Boston-based ECA, Electronic Commerce Atlantic, which creates customer loyalty progam cards tied into credit card processing. 

Charter took these cards to market proposing that merchants change credit card processors in return for  a. savings on processing fees via this new provider, and b. getting a customized loyalty card tied in. The program also means that customers email and cell phone numbers are captured, allowing additonal marketing. "Our agency handles all of that."

Graphic services

The company also supplies graphic services and printing, using current in-house expertise. Basicaly, this involved promoting senior designers to manage contractors who backfill when the work load exceeds current capacities. 

Results
Charter says that after two months he expects a 50% margin on the new services and first year sales of about $100,000.

Accounts include a public relations effort for three to six clients immediately, including a locally-based upscale restaurant chain and a locally-based dining television show.

Then there is the Buffalo Wing-eating competition, set up by the Worcester alternative weekly at a local sports bar, which brought in Budweiser and a t-shirt manufacturer. That's not too different from the old days, except that this event has the added twist of acquiring new customers for the loyalty card in addition to liquor and food sales.

The option to buy  website development landed  a local optician and film writer. Charter thinks website development has bigger potential,  "It requires additional marketing, if we are smart about it. Otherwise the site just sits there."

The group has also taken advantage of inhouse (and oh so under-deployed) design talent to sell graphic services for logos and letterhead to an out-of-market manufacturer, design and printing for one Chamber of Commerce and printing and directory services for a “Local First” business network.

Another result is that the small company can work further outside of its original DMA, since services are geographically neutral.

Lessons learned

At the Key Executives Mega Conference,  Charter gave these take aways from the first two months of the program:

Be prepared with back-up labor when landing contract work. Expenses are incremental, incurred "as you go." Kelsey Square has not required hiring additional staff, but it has required lining up resources as work comes along.

"We had to figure out a way to get people into the department quickly." 

Senior staff designers take the lead in agency services. They enjoyed this work, and the company  back-filled  with lower cost hourly designers in the deadline crunch, if more hours were needed

Involve your core sales force in sourcing leads.  "They like the idea that there are a number of things they can bring up that could be a solution. You get sick of being on your heels an dgoing on defense. This feels like going on offense after the agencies that are not very good."

Sponsor chamber networking events and leverage your trusted brand and personnel. All of the agency efforts we've seen have involved leaders with deep relationships in the community - something  larger corporate publishers who have moved from market to market do not always have. 

Look for opportunities to be the low-cost entry and steal market share.  This requires close analysis of your costs - and market pricing. Do your best clients really need someone on staff to write press releases? Do they need high-priced PR firms on retainer?

Conclusions

Merchants marketing needs and interests are "all over the board." The good news is that many of the services are things the media company already does, such as public relations and events, and underserved by the old agency model. This small market strategy does not require investment of money, just time and team horsepower. We like the original brand, and prudent choice of technology partners. The Public Relations component seems especially new and promising. This model goes after the low hanging fruit in the market, and is designed to be disruptively lower-priced than some other mid-range agency models that are fully staffed. 

Resources

Website design
Ownlocal.com, an Austin, Texas-based company provides templates for a three-flavored proposal, bronze, silver and gold packages. Pricing is zero upfront costs, so clients start paying a monthly fee. Contact is Lamar Romero, VP of Strategy and dev, 512.524.9649.

Video production -  Cinestories has videographers in New England and Washington D.C.

Merchant Services - PayCloud provided  credit card processing, built into Boston-based ECA, Electronic Commerce Atlantic, customer loyalty progam cards. Contact is owner Greg Reynolds. 

Many thanks to Gareth Charter, Publisher, for sharing his experiences with us, and to the Key Executives MegaConference for inviting Charter as one of its presenters. The Key Executives MegaConference is a joint venture of the Inland Press Association, Local Media Association (no association with this site).

Alisa Cromer

The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and  MediaExecsTech,  developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine,  to showcases perspectives from around the  world on new topic each month, translated from and to the top five languages in the world.

 

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