Traditional media companies have struggled for years with the paradox of trading “print dollars and digital dimes” — as online ads struggled to replace the revenue being lost in the shift away from the offline, many publishers continued to invest in print because that’s where the money still seemed to be. But a decade into newspapers’ precipitous decline, it’s become clear that if publishers are still dealing with “digital dimes,” there is an urgent need to diversify into other revenue streams that can supplement the bottom line.
At Borrell Associates’ annual Local Online Advertising Conference earlier this week in New York, several speakers touted local live events — from awards shows, to beer tastings, to road races — as a potentially lucrative revenue stream with sizable margins, and suggested that newspapers and other traditional media companies were well poised to extend their brands into the event space.
Local Media Association president Nancy Lane told the audience that her group has been bullish on events for several years — and suggested that companies needed to set up separate divisions for events, and put resources toward those units like they might a startup or new product. She said that the average profit margin for events being run by her members (all of whom had separate divisions and staff) was about 40%, and asked, given that, whether companies could really afford not to invest in them.
She gave a few key tips for media companies thinking of moving into events:
— Separate teams is critical to success.
— For smaller media companies, events can often end up bringing in more revenue than all of their digital income
— Bringing a cause or charity into events can increase ticket sales and sponsor revenue.
— B2B events are a huge opportunity, as are events around dining and food.
— Owning a single local niche can be very lucrative.
— Promotions can be a triggered to launch an event. (Best-ofs and contests can turn into banquets and awards presentations).
— Successful events companies focus on the categories that work best for them.
— Event management software very necessary.
Lane’s prescriptions were followed up by a fiery speech from Gatehouse Media‘s President of Western U.S. Publishing Operations Jason Taylor (who also heads up the company’s events initiative, Gatehouse Live).
Taylor pointed out that media companies already have a lot of the assets in place to power local events, including market penetration, brand recognition, diverse portfolios of products, creative people, an existing workforce, and community partnerships.
He said that while the most obvious reason media companies should get into the category is revenue, events also are a logical extension of “what we’ve done since the begining of media” — create content, attract eyeballs, and monetized those eyeballs. An event is all about creating a content (either in a virtual/digital world), developing an audience for that content, and then selling that audience to sponsors.
He said that events were an opportunity to:
1. Grow customer base
2. Engage audiences
3. Get to know clients
4. Strengthen underperforming audiences (geographic, race, age…)
5. Upsell opportunities
6. Capture money from different buckets (many sponsors have different ad/marketing budgets, and events can potentially take from an untapped category)
7. Showcase high-performing audiences
Taylor and Lane both pointed out that if newsmedia companies don’t use their natural advantages to get into local events, there will be plenty of others (both from inside and outside the community) who will be ready to do so.
David Hirschman is a co-founder at Street Fight.