Conference Notebook: Digital Companies Look to Leverage Legacy Sales Forces

Legacy media’s relationship with the digital might become even stranger as digital media and tech companies are now looking to the established players to find scale. Speaking at the Local Online Advertising Conference in New York Tuesday, Warren Webster, co-founder of Patch, hinted that the hyperlocal media network might look to partner with established local media companies to resell its advertising products.

“I’ve always felt, theoretically, there shouldn’t necessarily be two identical sales forces going after the same clients with a very similar product,” said Webster in response to a question about the company’s partnership plans. “We could work with some of the established media companies that have sales forces to sell our product. We’re open to that.”

Webster said that until recently the company has been “hesitant” about running partnerships with local media companies, developing mostly content partnerships on an “ad hoc basis.” The network has worked with a “major television company” to source information for segments about neighborhoods on a local news programs, which are sponsored, and generate a revenue share for the company, according to Webster.

It’s a strategy that AOL CEO Tim Armstrong teased out during the company’s Q4 earnings call last month, and one which is gaining traction as a viable option for technology players like Facebook to enter the local market. Dan Levy, director of small business at Facebook, said as much Tuesday morning.

“Given that [our company] is run by an engineer, we would love if our product was simple enough that every small business owners could use it on its own. But we know [simple] is not enough,” said Levy. “We know that we’re going to have to rely on [local media resellers] to help make Facebook work for local businesses.”

Facebook’s SMB program is substantially less evolved than its enterprise-focused products, and the company has struggled so far to cultivate the services ecosystem, which has been key to a company like Google in bringing a complex product like paid search to a relatively low-touch market. Levy said that while the number of local businesses advertising on Facebook has doubled since January 2012, 70% of brand pages currently managed by third-parties have negligible consumer engagement.

Given Facebook’s recent push into local on the product side with the launch of Nearby, its local discovery product, and Graph Search over the past three months, the company is likely to begin rolling out the infrastructure needed to scale an efficient partnership program. That means better APIs and integration tools to allow third-parties to builds the social-equivalent of demand-side platforms for small businesses.

As more legacy local media and yellow pages companies look to position themselves as a marketing agency for local businesses, reseller relationships should provide both sides of the market with solid value in the near-term. The question for media companies is whether they can develop a competitive technology arm before the pure-play companies build out a comparable sales structure and product footprint.

Steven Jacobs is deputy editor of Street Fight.