This week we posted a report, "Ten steps to starting an inhouse ad agency."  We asked Nanci Williams, partner in Orloff-Williams, a local ad agency in San Jose, California who has spent thirty years in the agency business to weigh in. Here's her take how agencies have changed and advice for local media thinking about starting an in-house agency.

From an agency perspective, what are the biggest changes that you see agencies going through right now?

Williams: Clients are more confused than ever. Traditional media is going away and online media is changing every day. Agencies have had to become more like consultants than just service providers. They are providing strategies rather than media buying, putting online and traditional media together and showing clients how to measure it. There is more creative and more high-level thinking and less executing.

Have you seen  fall-out for agencies who didn't change fast enough?

Williams: Yes. The traditional agency and heavy media-buying agencies are gone or sized-down considerably. Social media agencies and digital agencies have sprouted up and are larger than the traditional agencies now. Let's put it this way. We were losing business to agencies I'd never heard of, that were formed that year.

What new positions did you find you needed to add?

Williams: Absolutely social media expertise. People with extensive knowledge of the social networks, and successes they can point to and say, for example, "I did this Facebook campaign and it went viral." Most of the people who have hung shingles as social media experts are very young, early adaptors who figured it out long before Madison Avenue did. Right now at Orloff-Williams we have three interns that do nothing but social media, posting things. They are all high school interns, not even college interns.

What else are your clients asking for?

Williams: They want mini-website for particular promotions.

How do you do  you build sites …

I've been finding it helpful with clients and members to divide the kinds of revenue available - and their assets - into two buckets: Those driven by traffic and those driven by sales.

That is building the Total Digital Audience: Email, mobile, online, Facebook and so on - drives a number of products from deals to transactional revenues of all kinds (selling photos on galleries for example). So the plan to build these audiences is critical and a revenue driver. When you think of all these models - from Taboola, which gives extra money for related video - to PrLink, a much under-deployed paid press release site, it's clear why the company with the most data wins and why "marketing" is becoming a revenue position, not merely an excersize in brand extention.

Now let's look at the second metrics: Direct sales. Everything driven by direct sales is determined by revenue per sales rep. Now we are looking at products, and sales organization and quality of leadership. However, I've met many organizations in which the revenue that current reps bring into the company - say $500,000 or more - can't be replicated via selling new products. Our mantra here is that as long as a rep can bring in $200,000 in contract revenue first year, and there is the cash flow and management to sustain this, you can hire reps against all kinds of new products that may otherwise not get enough traction to be viable.

Of course traffic-driven revenues and direct sales driven revenues are closely intertwined and often involve trade offs. However, I hope thinking in these terms makes planning your 2012 business models a little easier to create, if not to explain in your company.

On a final note, my last speaking engagement of the year was at what it looks like may be American Press Institute's last seminar in its current form. It was my first, but many of our members cut their publsihing teeth on training from API. The group was small - we all went to dinner together at the same table …

As 2011 draws to a close, attention tends to focus in around concrete plans and budgets. Here are three larger questions that are harder to tackle mid-year, when budgets and plans have already been made. Every local media company should answer these before plans for 2012 are finalized.

1. Has your company adequately addressed the "separate or perish" issue?

It's clear - and you ignore this logic at your own risk - that businesses in all industries, and even good ones, even yours, do not survive technological disruption without some form of separate business unit reporting to a separate c-level executive. That is, none in the past. And if you would like to stake your company and professional life on the idea that your company and industry is somehow different, you don't need to keep reading.

So the question is, what have you separated, in terms of a product and sales division with separate reporting? An is it enough to propel real gains in digital market share in the local market?

Below, again, is the famous powerpoint that shows up at almost every media conference; the "green zone" are local media with significant digital market share, and their common characteristics, in Borrell & Associates study:

So the question is, what is your company setting up to drive separate revenue streams, what will drive marketshare in the future, and how will this be accomplished?

2. Do you have the right people?

As I often hear from successful executives, 49% of the success is the right strategy but 51% is the right people. Is your executive team in charge of digital revenues driven and creative about evolving new business models? If your company is a puerplay, are key people willing to go into the community and mix it up with the Chamber of Commerce or the Rotary Cub? Launch a street team?

If your company is a traditional media company, do you have a team who not only adopts best practices but expands and improves on strategies? Would this site …

Last week we recommended a quick ten question survey of advertisers - and this week, we got back some results from an LMI member who used this questionaire. 

One thing is clear: this week's case study, the SoloMo package created "gets it right."   Merchants want digital marketing - not just advertising. The SoLoMo package, brainchild of Marc Jenkins, Director of Digital Media Sales for the Florida Times-Union, aka Jackonsville.com, provides a combination of services, and a single point of contact backed up with customer service. 

We've beat the drum on a number of occasions about what merchants want that local media is not selling. 

If you are still uncertain, the quick ten question advertiser survey  gives some quick answers directly from the local merchants who sales reps talk to - or try to talk to - every day.

One LMI member site who tried it got back some interesting results. The survey was sent via email to all potential advertisers including those who used to advertise and those who never have.

Of merchants who responded (expect 1 percent), about 80% were not currently advertising, and almost 40% had never advertised with the media company.

So here is the famous "green side" of the ven diagram, that shows the market of merchants who are not advertising - and also, in this case, no longer are - talking directly about what they want to talk about and invest in. 

Drum roll please.

Around 45% answered "yes" or "maybe" to the question "would you be interested in" eight of the ten services in the questionnaire. None of these services included advertising. 

That is, 45% of these businesses would like to talk about custom Facebook pages, and about checking their placement in all the local directories (not just one the rep happens to be selling) and being able to text their customers.  That is a lot of talking points so far. 

53% are also interested in a service that lets them …

This is a good time of year to be thinking about 2012 - and about 2015 and 2020.

The variety of new business models to keep larger local media companies profitable and competetitive is still forming - and reforming. This week's case study on NewOrleans.com explores one business model that most local media do not think about: Travel products, that is, directly selling hotel rooms, golf reservations and attractions online (a guide to getting started is here).

This is not model that applies in all markets, but some, both small and large, have overlooked a significant opportunity for transactional revenues from a new source. 

Once the programs are set up, the cost of sale is very low.

Other emerging strategies, include selling marketing tools and services - not advertising. Next week's case studies includes how to package social media, mobile and search as a service; all of which rely on critical third party technology partnerships you may not have even known about. 

Meanwhile, to be as informed as possible about products and services advertisers want in your market,  survey your  advertisers.  Borrell supplies a relatively inexpensive survey, and we have also included a very basic "ten questions" that you can simply plug into Survey Monkey and send. 

And finally, don't forget to include LocalMediaInsider in next year's budget so we can continue to facilitate peer-sharing of best practices and competitive trends from around the country. 

David Castello, COO of Castello Cities Internet, Inc., spoke at the nascent GeoDomain Publishers conference about the future of city.com sites. This interview fleshes out his own plans to build out Nashville.com and his thoughts on partnerships with local media.

What do you see as the next step for owners of city.com names? 

If Geodomain owners truly want to compete against traditional media such newspapers, cable stations, etc, I suggest they strongly focus on a single market and drill deep. Very deep. The days of a Geo owner running multiple sites and monetizing low hanging fruit are over. Traditional media has geared up their Internet presence. They have finally woken up and realized they have a real fight on their hands.

How has the economy affected your industry?

My position has always been that advertisers may be bad off now, but they would be far worse off without us. We’re not running charities here. The ROI from Geo brand traffic makes them an essential part of any serious advertising campaign.

Who do you see as your top competitors?

The Convention and Visitors Bureaus aim for tourists (and they receive their city’s bed tax – must be nice). The newspapers, cable stations and radio get the locals. We own the brand. Therefore, we target both. (Google Local targets both but does not have a local brand.)

You've taken your own advice and are looking for capitalization to build out a large market.

We already have the capitalization lined up. We have chosen four of our Geo markets and that means we will have our hands full: Nashville.com, LagunaBeach.com, PalmSprings.com and WestPalmBeach.com. They are all well established sites in their respective markets.

Tell me about the investment captial you are looking at acquiring.

There are two different paths and we have to make a decision. One is a straight loan and the other brings in investors who will acquire a small percentage of ownership as the first …

Quick, create a list of all the accounts who are spending $5000 a month in your market.

If this doesn't phase you, now try figuring out the last time they had a real needs analysis with a sales representative.

No problem?

Ok, lets move on... did that sales representative create a competitive multi-media plan?

How are we doing?

Most media companies have accounts spread on a variety of lists and among sales people with very different skill sets. And figuring out how to make sure sales reps are fully in the game this year when so much money is shifting from traditional to digital and promotions is a huge challenge.

At the Arizona Star, Ad Director Chase Renkin, decided the problem was serious enough to redistribute accounts throughout the company - an enormous task - so that a specialized team goes after the big accounts. It's a radical solution, but one, combined with a number of other changes, that has been paying off so far.

A number of media companies report that simply offering services such as behaviorial targeting or contest sponsorships that come with e-mail lists, are convincing large accounts to shift more revenues from a competing media into a digital buys in 2012. These new relationships are succeeding even though the competing media can offer, essentially, the same services. Ouch.

We are interested in hearing from other sales managers who have come up with ways to identify and track major accounts, so that opportunities for large digital buys are not overlooked. If you have a good system, send me an email at alisacromer@gmail.com, and get a free subscription if we share it with LMI members.

Featured advertorial: Webshoz has created a way for video content to be syndicated in a small form factor that provides roll-over engagement - called the Videobar. It also displays multiple videos simultaneously.

The Videobar is used to upgrade standard display ads to include videos, to showcase entertainment, sports or news video content across publisher networks, and for offering directory owners a way to earn more advertising revenue by showcasing local merchant's videos at the top of search (rather than having them buried in profile pages).

The company is always looks for new partners who want to leverage the power of videos that have a hard time being found, let a lone watched. Engagement runs 3% per video placed in a Videobar - 3 videos, 9%. For "deal videos" engagement it is 100%!

Contact Alex@webshoz.com for more information.

http://www.webshoz.com

This week's two case studies are from tiny Pottstown, a 23,000 population borough in Montgomery County, Pennsylvania, on the Schuylkill River that survived both an earthquake and a flood this week. 

The case studies are solid, if small revenue, simple ideas. But what's happening at Pottsmerc.com is important for a different reason.

The Journal Register-owned Pottstown Mercury News serves tri-county area, and thus has a circulation of 27,000. Pottsmerc.com on the other hand has 300,000 monthly Unique Visitors (keep in mind, this is not a tourist town), was named by E&P as one of the ten newspapers that "Does it right" - "it" being digital, we assume - and selected as a speaker at the SNA/Blinder Revenue Summit. 

In August, 2011,  that number was 457,000 UV's. Even though analytics overstate UV's and you can cut the number in half, it's still a huge number compared to market size and circulation.

We've covered three small revenue initiatives on this site - the Best Bartender video contest, and now a Holiday Map and Multi-media Dining Guide. Nothing too dramatic except for the obvious: This small staff can kick out a new online initiative seemingly at will.

This is the legacy of CEO John Paton's digital first initiatives at the granular level. Too often we see media companies stuck with templated software that just can't produce these kinds of small revenue generating guides that have a promoted life span of maybe, say, 30 days or six months.

I probably should not be making comparisons to a river running down hill or a flash flood this week. Let's just say that for most media companies stuck in overly-templated software, a back-logged development queue or unresponsive interactive department, the idea of a sales team spawning numerous creative initiatives is just unworkable.

Moreover, most of these products involve video deployed by the sales staff, equipped with Flip phones years ago, or what seems like it.

So kudos to …

It was 9 p.m. inside a industrial warehouse in Las Vegas, when the first people in Nevada tried to lay-out the page of an actual newspaper on a Macintosh computer.

I was 20-something and the Apple sales representative from Century 23 Computers was acting as my IT director. He showed up with the computers and printers in his pick-up and set them up on a folding table - the kind used for registrations at fundraisors - in the middle of the room.

We could not actually place the ads yet - that would wait for, I think, InDesign, and by then, who remembers. But the thrill...

No one else had put out a newspaper this way, not in Nevada. Not even the Review Journal!

Thus, twenty years later, I find it impossible to separate my career from the influence of Apple and the man who lead the company towards the obvious, that no one else was able to see. .

And we are now trying to figure out how to publish on iPad, and to understand things like eyes and fingers, as if for the first time. As one top executive put it to me recently, redesigning for the iPad, "The mouse is a precision instrument, the fat finger isn't."

So given a touch screen, drop down windows on navigation bars may no longer be efficient.

Wall Street exectuives may still cling to their blackberries, texting faster than ever, but for most consumers - and for people who move words around in the publishing buisness - have a special connection with the visual world in which moving things by touch satisfies a desire they never knew they had.

It's the difference, between, classical geometry which relies on straight lines of linear geometric thought, and, say, fractiles: infinite equations, non-repeating, which via computer form pictures. The messiness of nature hid a its astounding visual logic in plain sight.

The real scientists insisted for a while that what had gone unseen was still largely irrelevant, even though - and perhaps because of - the fact that it described, basically all of …