Legacy Media: WBOC and Fox21Delmar
Sites: WBOC.com, Fox21delmarva.com, Delmarvalist.com
Traffic: Traffic 350,000 to 500,000 UV’s monthly
Owner: Draper Holdings
DMA: Salisbury, Maryland, plus the areas of Delaware, Maryland and Virginia known as Delmarva
Key executive: Brooke Warner, General Manager for Interactive for WBOC
Summary: Draper Media operates the sites of two television stations, and has created a new site, Delmarvalist.com. Under the leadership of WBOC.com's General Manager of Interactive, Brooke Warner, the group is rapidly evolving into its own business unit.
WBOC.com stands out in its aggressive approach and success; interactive sales grew by 59% in 2010 and are poised to double in 2011. Key initiatives include a digital-only sales team, pricing and packaging strategies, massive Facebook push-distribution of selected advertising messages (jobs and events), and channel sponsorships.
Challenge: Draper Media set out on a simple mission, to earn the lion’s share of the available online revenue in its overall DMA, which extends into a tri-state area of Delmarva (see above). By nature, some of its vision was defensive, ie to help protect the marketshare that existed, prevent competing companies from gaining ground, and transform the two legacy stations into multi-media companies.
However, its mission was also to look for larger market opportunities in the extended DMA, and to create a new digital business unit that will launch products independently from the legacy stations.
By the end of 2009, the digital division had realized a key challenge was the limited the sales staff and the fact that digital leadership was distracted by multiple legacy responsibilities. Not only sales, but also recruiting and training had fallen behind schedule.
Strategy: Beginning 2010, the company began making key investments. The first was the hire of a full time interactive sales manager and team that could amp up both products and sales efforts, and eventually form the basis of the new Draper Digital Media sales team.
The critical first hire was the new position of a digital-only sales manager. For this position, Warner tapped top sales person from WBOC's legacy team, Bill Vernon, a top television sales rep and passionate interactive seller. Vernon was familiar with the market and could also serve as a bridge between teams, signaling that top performance at legacy properties would not prevent advancement into the independent digital team. Both the top TV and top internet sales person in 2010, Vernon was also well-known in the marketplace, had previous internet experience and was vetted by Borrell.
"In small markets in and around Delemar, relationships are important, as well as knowing the marketplace, which advertisers would most receptive and where to recruit sales talent. It made a big difference for us," Warner says.
The new manager was charged with building a new, five-person interactive sales team that would supplement legacy sales efforts. The objective was to "find people with selling chops more than anything and educate them interactive as necessary. We hope they have interactive chops but in a smaller market you can’t guarentee that is going to happen." Five reps have since been hired (two in the offer stage) and a continuous recruiting effort has been established. The digital division also includes a telesales team for a directory product, Delmarvalist.com.
While the legacy team was tasked with adding on business to its current customer base ("Why start over when they already have a history with so many key accounts?"), the new interactive teams would be "all about new business, and account rules mandate that they leave the legacy business alone, for now."
"This helps create trust between two teams and gives them some rules of engagement. We wrote the rules so that everyone one knew how to behave. They could relax and focus on sales and education," Warner says (for those interested WBOC's rules of engagement are posted here).
To achieve their bonus, sales representative for the two television stations now have to hit two of three goals and one has to be interactive. "If you didn't hit your interactive goal, it didn’t matter that you hit your television goal."
In addition, the flat percentage for selling interactive is higher, than it is for selling TV advertising, so as reps sell more interactive, the compensation scales better towards digital.
2. Products and packaging
Warner and Vernon came up with clear packages for both teams to sell in bundles (see images to the right), though TV reps have access to sell all products in different increments a la carte if they need to. "One of of things we have in our favor is a ton of traffic so no one is squabbling over traffic."
Basic packages sold by both groups are in four tiers, "Representative, Competitive and Dominant, and Premium." Packages include classifieds ads AND high CPM pre-rolls. (Example of these packages are in images to the right, click to enlarge). Warner says the package help raise CPM's, because the campaigns were more powerful when integrated together.
3. The business directory
The business directory, DelMarvalist, includes 26,000 busineses and a Daily Deal, launched in December, 2010. There are two levels of featured upgrades, one $99 and high $199 month. The listings are packaged with online sales, but the inside team also sells them. Directory sales total to 400 listings so far, at 1 to 2 percent of listings, about average for a directory, and creating a significant revenue stream (we estimate this is in the $30,000, a month range even if forced buys are discounted, besides the daily deal). Classifieds is currently being merged into this media agnostic channel.
4. Sponsorship revenue
Key section sponsorships were created and have sold out. They include hard-coded "powered by" mentions on site sections, as well has exclusive mobile advertising by main categories, sports, weather and news. The sponsorships range from $1000 to $2500 a month (see packages to the right). The "Everything Weather" channel, for example is sponsored by Wilmington University.
5. Selling skins
Skins or "Wallpaper" ads surrounding the site command a flat $2500 rate and run for five days, only once a month to avoid an overdose. With CTR's as high as 7%, the skins are sold out, though 25% are kept for the site's own promotions.
6. Building and bundling Facebook
Launched in December, 2009, WBOC's Facebook page had an initial bump created by a major breaking story. Fans since then have accumulated at the rate of 1,000 per month, fueled in part by regular broadcast announcements like, "For more conversations on this topic" go to the Facebook page. Also, WBOC's Facebook page allows users to post news items and photos, on basically an honor system to "follow the rules."
The page is being used "to evolve in continuous news process." There are requirements for each of the eleven reporters to post, in addition to required posts from promotions and the interactive departements.
Facebook is a source of story leads as well as a revenue stream. On March 20, for example, there were 12 news items posted on the page, and two ad messages (limited to jobs and events to stay within Facebook's content rules), one for an employment opportunity and one for a plastic surgery seminar. Some stories garner 12 to 35 comments, and "fans" also contributed a tip on a fire billowing nearby, and an impending rain storm "just listening to the distant rolling thunder." Reporters armed with smart phones also snap from them an post directly to Facebook.
Facebook's ad messages are including in some packages (images to the right).
The average new interactive team member now handles 30 businesses a month - all new revenues. The team as a whole has average individual advertising account sales billing $600 per month, almost same as the legacy sales team whose average sale is about $700 a month for the interactive piece. The largest pure online sale topped out at $80,000.
With a growth rate of of 300% in the number of clients (from 99 to 326) and a 59% increase in digital revenues in 2010, the team's target of a 100% increase in digital revenues in 2011 is looking good.
The 27,000 fans the site has today is a number higher than the competing Salsbury Daily Times readership -- and still growing.
2011 operational goals also include ending the year with a profit for the division, after including the new hires. Fox21Delmara.com iis also being redesigned and classifieds folding into Delmarvalist.
The future Draper Digital Media group plans to launch its own products that stand alone outside the legacy media.
•It's clear that Draper Holdings reached a point where it realized its digital division was not going to meet its stated mission merely by leveraging existing assets. To fully take advantage of the market potential it would need to sacrifice short term profitability for WBOC.com in order to build out a true online sales team with the horse-power to package and sell digital assets, as well as develop new ones. This is the point many media companies are approaching; so WBOC is a good model in how to position a company for future permanent declines in legacy property revenues and to take full advantage of wider digital marketplaces.
•Online team selling is not based on all-out cannibalism as was Autotrader.com which resulted in the print side shutting down. Attention to issues of trust between the divisions and clear "rules" enable divided sales departments to work together, including preventing online sellers from cannibalizing legacy accounts and forcing the new team to find new opportunities. This is a terrific model for traditional media whose established brands include broadcast. Also of note, providing paths through the company for legacy staff and reps who want to work on the digital division was an important message.
•Pricing and packaging are also key to the effort. On the back end we looked at a complex CPM analysis of a variety of rate cards including competitors, to establish what looks like a dirt simple package for advertisers that never shows CPM's. We also like how the value of each item in the package is fully articulated, so that the value of it's components is not discounted.
•Three undervalued products the company took advantage of include Facebook messages, "wallpaper" ads, mobile sponsorships and, the sales of pre-rolls which garner far better than average CPMs.
•While this company has accomplished a lot in one year, it's motto is "evolution not revolution." The strategic planning that went into these steps is also in evidence. We see a great future for Draper Media in the digital space.
Many thanks to Borrell & Associates for providing the Local Interactive Media conference, where we first met Brooke Warner, and to Warner for sharing her experiences and expertise with us.
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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