Can New Local Media Consortium Succeed Where Others Have Not?

Share this:

LMC_logoFor two decades, legacy media have tried to pool their threatened resources and capture digital ad revenue to replace the billions of dollars that stopped flowing to their newspapers and TV stations. They had some success with CareerBuilder, the online classified network co-owned by McClatchy, Gannett, and Tribune. But their more ambitious digital partnerships haven’t fared well.

Who remembers the New Century Network, whose old-media organizers included Advance, Cox, Gannett, Tribune, Hearst, the New York Times and the Washington Post? The enterprise didn’t quite make it to the new century; it was shut down in 1998.

Now, a new group of old-media companies have banded together to form the Local Media Consortium, which was born out of the eight-year-old Yahoo! Newspaper Consortium, whose high hopes for transplanting old media to the digital world never materialized.

Significantly or not, Advance, Gannett, and Tribune, among other old media companies, are not members of LCM. Nevertheless, the consortium boasts of 42 members who own 800 newspapers and 200 TV stations. These papers and broadcasters all have local digital sites that, according to LMC, generate 10 billion page views per month from 240 million users.

Another LMC bragging point is that Google will be a the key member, providing all-important infrastructure that will be able to serve ad impressions to the millions of local pages of consortium members, and on any scale, from national or regional reach right down to census tracts. LMC will use Google’s ad exchange to serve ad impressions, including premium-priced ones, which, in theory, anyway, will mean that member publishers won’t get caught up in a downward-spiraling CPM numbers game.

Can LMC succeed where previous old-media efforts to scoop up digital ad money mostly failed?

I asked two digtal advertising experts — Ron Blevins, VP of digital strategy at the Omnicom Media Group subsidiary ad agency Novus, and Jonathon Shaevitz, CEO at the programmatic marketing company Upfront Digital Media, what they thought.

Here’s was Blevins said:

“First, from the LMC side, this seems like a good thing. It enables local publishers to connect their inventory to the exchanged-based marketplace which will in turn provide new revenue streams that are needed with the degradation of the “ad network” model. It offers immediate scale and a ticket into the programmatic buying space without each publisher needing the technical know-how to do so. I believe this is very compelling to local publishers and the driving force behind this initiative.

“If you’re Google, this is a great opportunity to make revenue from media arbitrage by enabling the transaction. They’re capitalizing on the need of local publishers to quickly monetize inventory and develop a profitable digital media product.

“However, for local publishers, this seems to me like a short-term solution; they could likely get better terms if they engaged with advertisers/agencies directly via private exchange arrangements.”

Shaevitz’s assessment:

“Given that they see 240 million unique users, they need to develop a centralized data collection and management strategy where they can manufacture their own data. That means leveraging registration data and customer interests (what pages do they read?), along with click stream data, to create their own user profiles. If they are able to create this centralized data strategy, which is both a political and technology challenge, they have a tremendous opportunity to then leverage this local content, but consortiums are always challenging to manage.”

What about the local content? Programmatic advertising is pivoting from big-number audiences to smaller but more engaged ones. Big numbers can be successful in certain branding campaigns, but retailers and other businesses that want to sell a specific product or service, and as fast as possible, are turning toward targeting in a big way. Advances in profile data make this much easier to execute on the granular scale.

The newspaper and broadcast members of LCM have been spending the last decade slashing away at editorial staffing, almost all of it in community news. Reflections of a Newsosaur’s Alan Mutter, quoting the Paper Cuts blog, said 39,806 newspaper jobs were eliminated between 2006 and 2012, and the terminations continue unabated.

Filling the local news vacuum created by this mass of terminations have been independent websites created by entrepreneurial “pure-play” editors and publishers, some them from the ranks of the terminated. These entrepreneurs run small operations. But many of their sites, invested with the kind of editorial passion that isn’t often found in daily newspapers or at TV stations, have high levels of engaged users. The sites’ small but lively audiences, when they’re aggregated into one “buy,” may be more attractive to some regional and national advertisers than the big numbers of which LCM boasts.

Shaevitz believes premium-priced programmatic — which LMC touts as one of its biggest selling points to prospective publisher members — won’t work without engaged audiences. I asked him, Can LMC, with its members having hollowed out so much of their local editorial content, meet that challenge?

“Simply being big is not enough, but LCM’s 240 million unique viewers is effectively the online population of America.  I would ask the questions, “How much time is spent on site?” and “What are the number of page views per visit?” to get a gauge on how engaged are their readers. That being said, 240 million uniques is bigger than AOL.”

Old media has been trying to find major success in the world of new media for two decades. Will this new team-up finally lead to El Dorado, or will it be another digital ghost town?

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of the in-development hyperlocal news network Local America that will rate communities on their performance across a broad spectrum of livability. He will present the site’s new demo on Charleston, S.C., at the DIG SOUTH 2014 interactive festival in Charleston on April 9-13, 2014.