Former Air Force bomber pilot Joe Hyde founded San Angelo LIVE! in 2013 after deciding that the “cubicle culture” in the ad sales department at the Dallas Morning News didn’t suit his restless business ambitions.
He was growing S.A. LIVE! steadily, using “crime and crashes” coverage to attract audience that would help pay for strong but more-expensive-to-produce civic and cultural stories. Then, in 2015, the West Texas oil bust hit San Angelo hard. Hyde turned to programmatic advertising to make up the difference in lost sales from struggling local merchants.
The artificial-intelligence platform Ezoic – which was featured in an article earlier this week – showed Hyde how to create longer revenue-generating sessions with users. In this Q & A, Hyde tells how he came back, and how he plans to out-compete Facebook for ad dollars in the recovering San Angelo economy:
You and San Angelo LIVE! recently survived the West Texas oil bust. What did the experience teach you as a local news publisher?
We wouldn’t have survived if we didn’t already have a strong base of advertisers in long-term engagements. We concentrated on sales, sales, sales, and keeping the clients we had. Top-line revenue helped us, and also maintaining our low-expense structure.
Our year-over-year sales dipped about 10% comparing 2016 to 2015. We created new products like Friday Night LIVE! for high school football, partnered with a Townsquare radio station group to bring Texas A&M Football game broadcasts and promotions here (yeah, we’re five hours away from College Station, but we have a large contingent of Aggies here, and loyalty is strong.) And I took a deep dive into programmatic to learn the game.
On the local level, news publishers are told to concentrate on direct sales because programmatic ads were the worst version of “digital dimes for print dollars.” Does that view need an update?
No local digital news platform is going to replace local sales dollars with programmatic. Ad tech isn’t the Holy Grail. I don’t think it ever will be. But it is a big factor in revenue, and I predict it will continue to grow and get better.
There are several things local publishers should think about, and things digital media buying agencies should think about, too.
Big box retailers like Walmart and Sam’s Club now rake in the majority of the retail dollars in local markets. Small mom and pop retailers will never be able to compete. The majority of our local advertisers aren’t big box retail – it’s car dealers and professional services like lawyers and the medical sector.
Right now, the only way we can get Walmart ad dollars is if Walmart sifts their ad dollars through a pyramid of programmatic trading desks:Demand Side Platforms, or DSPs; and, for publishers, Supply Side Platforms, or SSPs. These cogs in the wheel of programmatic advertising are not adding as much value to Walmart’s target audience as we are.
What we are paid from these programmatic ad buys, when compared to the effort we undertake to create great content, amounts to slavery. But you still need to capture those dollars since they are out there.
You will never get the revenue you need to finance a real newsroom via programmatic alone. There will always be a reason to have a direct-sales effort.
What about Facebook?
We provide tons of great content to Facebook and they sell ads around our content giving us nothing in return. Where this particularly hurts the local news business is when some local businesses direct their dollars to Facebook’s northern California headquarters instead of at our local efforts to guard democracy.
Another problem with Facebook is that its mobile app is built to generate bounce-backs. There’s a big back arrow at the top left of the Facebook app’s interface. People will read the story and hit the “back” button, driving up our bounce rate.
According to Google Analytics, less than half our audience comes from Facebook, Twitter and other social media combined. Google search and direct traffic are still very relevant.
Part of my programmatic strategy is to prune our involvement with Facebook over the next year. We’re launching our mobile app in this month and we’re more focused on search-engine optimizatio and getting more email subscribers. We need to make the user experience on our website so good that people will visit San Angelo LIVE! directly without using social media as an intermediary.
The new mantra for local news is user sessions over pageviews. To extend sessions, what did you do?
Ezoic’s concept of what local publishers should look at is correct and provides a more holistic view of your audience. “Earnings per 1,000 visitors,” or EMPV, means “per 1,000 sessions.” A media product aimed at a local geographic area needs to generate thousands of repeat visitors, or sessions per day, to maximize impressions because the pool of interested folks will be comparatively small.
You do that with a content strategy that says, and shows, something is always happening at San Angelo LIVE! The more times a member of your audience returns, the more money you should make. So, constant updates, page speed, and linking, and especially deep linking from inside a story body, are important for increasing the number of page views per session AND number of sessions per user per day.
Programmatic now accounts for 15-20% of your revenue. Do you see that number rising appreciably as you master what produces better user experiences?
The biggest lift in earnings via programmatic was when we partnered with Ezoic and started making programmatic buyers compete for each ad impression with their header-bidding system. Ezoic also made our audience available to larger SSPs like Google AdX that we wouldn’t be able to get otherwise. Our EPMV increased around 120%.
It’s been a year-plus since you starting sponsoring events at Blaine’s Pub, the popular downtown music venue. You’ve now branched out into entertainment promotion. What’s going on?
We’re working with big talent promoters to bring large acts to the city’s various venues. We were a large factor in the Beach Boys almost selling out the San Angelo Coliseum on a weeknight and for most of the 1,200 tickets sold for an Evening with Travis Tritt. We just launched a partnership with another promoter who is bringing The Randy Rogers Band to town May 6. Last year, we sold 2,500 tickets to the show. This year, our aim is 3,500.
Gannett now owns your competitor, the San Angelo Standard-Times. Is that paper and its digital site more or less formidable or about the same?
I don’t know where the local paper went. We haven’t been watching them. They did take the time to attack us in an editorial recently. Their editor called me a “blogger.” Read about it here. This was our “High Noon” response.
Is San Angelo Live profitable?
Profitable every month since mid-2014. Our payroll takes a licking sometimes.
You’ve considered expanding in West Texas. Are you any closer to doing that?
We just bought our own building and moved in, starting operations out of the facility March 1. Our new space is twice as large as our old rented office. Yes, a major expansion is in the works for the first half of this year. I’m mum on where or with what the new market expansion will be.
Tom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.