Datasphere’s Cowan on How TV Stations Are Going Hyperlocal Online

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Local TV stations are going hyperlocal in a big way. While some of their initial efforts were heavy on car crashes and pet stories, the accelerating trend is toward higher-quality, more comprehensive community coverage. We asked Gary Cowan, senior vice president of products and marketing at Seattle-based Datasphere — which provides turnkey Web services to client stations — to talk about the trend and its significance.

Why are TV stations getting into hyperlocal news in the first place?
TV stations have always been part of the local community – they’ve always had a local focus. Hyperlocal news is a natural extension of that trend, albeit one with uniquely challenging dynamics, especially on the economic front. Three recent changes in the market have made strength in local news even more important (and viable) for TV stations:

1) National and international news has become more commoditized. That encourages local TV stations  to rely more on their source of differentiation – local news.

2) Technology now provides a platform that makes hyperlocal news feasible. With the rise and evolution of the Internet, there is now a credible way to cater to hyperlocal audiences. This evolution involves growth in the online audience, cost-effective platform management and hosting tools, and even mobile information-gathering capabilities for both staff reporters and crowd-sourced content.

3) Ad spending is migrating to hyperlocal as more small businesses become aware of the potential of online advertising at the community level. This in turn creates a sizable opportunity worth pursuing.

According to the recent Pew-Knight report on “Where People Get Their Local News” TV stations rate well behind newspapers (print and web) and non-newspaper community sites) in consumer preference, except for crime news. Given this record, can TV stations build credible hyperlocal sites?
As compelling alternative news sources arise, you can expect these numbers to change. There is no clear answer as to which source of news will ultimately predominate, and the answer may vary from location to location, depending on the players involved. Each player in this space has unique resources, and the ultimate winners will be defined by how well they are able to execute. We’ve all seen many instances where companies had all the natural advantages but failed to grasp the opportunity aggressively enough and over time their head start slipped away. The same will apply in this case.

Datasphere helped Fisher Communications develop 120 hyperlocal websites in its Northwest markets and in Bakersfield, Calif.  The sites in greater Seattle are competing against numerous other hyperlocals, both independent and major media (Patch). Is there space for Fisher in this crowded market? How are Fisher’s KOMO-TV sites in greater Seattle doing, both editorially and business-wise?
Fisher is clearly one of the most innovative media companies we work with and recognized the hyperlocal opportunity early on. They have been at the forefront of experimenting with different approaches to serving hyperlocal communities, and we are thrilled to be a part of their success. This is not a winner-take-all-type market. Some of our most successful community sites are those where other players are also strong. The bigger challenge is getting people to be aware that compelling local community news sources exist. They can then choose between them or spend time across multiple sites.

Second, the approach we take with our media partners differs significantly from standalone hyperlocal news sites and from national networks such as Patch. By definition the standalones and networks are focused on a limited selection of neighborhoods. Individual hyperlocal sites are only in one or two neighborhoods. Patch, while much larger in overall scale, cherry picks neighborhoods within a designated market area (DMA). We are much more inclusive – we aim to provide neighborhood news for the majority of people in a DMA. That’s why we have over 50 sites in the Seattle area alone.

You get involved in selling ads as well as helping develop the editorial content of these TV stations’ sites. Do Datasphere staff hit the streets to pitch ads to community merchants, or do they sell over the phone?
Our approach is on inside (over-the-phone) sales. Since each transaction is not large, it is important to align sales costs with the revenue potential, and inside sales are an effective way of doing that. To be successful in building an effective inside sales team, there are myriad things to juggle, including human issues (recruiting, training, motivating, measuring) as well as technical systems (workflow management, prospecting optimization, ad creative generation, accounting, billing, customer support systems, etc). All this benefits from scale that allows specialization and ongoing development.

Is the strategy to sell not only to local merchants, like the pizza parlor and dry cleaners, but also regionals, like health-care providers, and national brands?
Our focus is smaller local businesses. While many of the ad placements we create are compelling to regional advertisers, our partner stations already have relationships with them, so we stick to the smaller guys.

You bring what you call “world-class technology” to your clients.  How can that provide better community news to users and create more interactive experiences?
The benefits of great technology can help in many ways – from making it easier to gather and submit news through different channels, to harnessing the power of local community contributors, identifying and propagating best practices across our partner network, providing various levels of personalization and also supplementing the “ground up” content with database-driven content such as our new events service. But while technology helps on many fronts, at the end of the day the quality of the people managing the sites is absolutely critical – they are the ones who ultimately own and drive the vast majority of the visitors’ experience.

You’re helping Gannett roll out hyperlocals in its 10 TV markets, beginning with WSTP in Tampa Bay. Will the editorial content be different, qualitatively, from Fisher’s hyperlocals?
The overall approach is the same. Gannett has already rolled out our LocalNet hyperlocal service across 10 of their sites from WUSA in Washington, D.C., and WXIA in Atlanta through to Jacksonville Fla. They’re pleased with the results.

Most hyperlocals are independent sites, started by entrepreneurs who usually don’t have a lot of financial resources. Will major-media and “legacy” sites, like Fisher’s and Gannett’s, spell ultimate doom for the independents?
No. The reality is that that the best of these standalone sites are tremendous community assets run by passionate people very involved with their neighborhoods. They bring a fantastic perspective to local news, one that will not be easily replaced. Having said that, it is an oversight to lump all independent sites into a single category. It’s important to distinguish between the different types. There are multiple varieties that exist, each with a different raison d’être and often varying in terms of their ability to deliver against their objectives. They range from endeavors with multiple people working full time and relying on the income produced as their primary means of sustenance, to nonprofit labors of love, to part-time efforts on the side. With all the available options to find hyperlocal news, you may see a decrease in the rate that less-compelling sites are launched.

After Fisher and Gannett, where else will we see “legacy” media like TV stations getting into hyperlocal?
What we and our partner stations offer is relevant across the US and internationally as well. We currently cover about 45% of the U.S. population through our partners, who include not only Fisher and Gannett but also other leading media groups such as Raycom Communications and Local TV LLC. You can expect to see us working with additional media partners to offer a variety of locally focused services across most of the country in the not-too-distant future.

For more information, check out Street Fight’s previous interview with Cowan, and coverage of his appearance at last month’s Street Fight Summit.

Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is developing a Web site to rank communities on their livability across 20-plus categories. The rankings will be dynamic, going up and down daily as they are updated through a combination of open data, journalism and feedback from local experts and users of the site.