LOAC Notebook: As Platforms Ascend, Some Blunt Words for Legacy Media

Borrell Associates’ annual Local Online Advertising Conference in New York is often a good event for taking the temperature of traditional publishers and broadcasters continuing to work their way through the evolution to digital platforms. More than two decades since the internet began its disruption of local news, many of these media companies still struggle with the challenge of fully committing to a digital future while so much of their revenue still comes from legacy products.

And so the event often feels like it’s a tap on the shoulder for many of the companies in attendance, reminding them that there is still lots and lots of work to be done in reimagining their businesses, and that digital disruption is continuing apace around them whether they like it or not.

“You’re going to have to change the way you do business,” said Ezra Kucharz, special advisor to the CEO at CBS, in a keynote on the morning of day one. “The world is changing and we have to change with it.”

One of the first speakers to take the stage was Phillip Rather, who heads up partnerships at Facebook’s SMB center in Austin. At a time when many publishers are uncertain about how much to trust the social media giant, Rather sought to present Facebook as a partner for media companies — and a tool in helping local businesses and brands connect on a local level: “When you are thinking about the opportunity,” he said. “Whatever that unique asset is that you have, think of Facebook as a medium for that.”

One eye-popping stat Rather presented was about the importance of localization for national brands and franchise businesses, noting that $50 billion is allocated to co-op advertising every year, and only $25 billion gets spent. For media companies and local marketing services — as well as tech companies like Facebook — that unspent $25 billion represents a big opportunity, and Rather said that the social giant was building tools that would make it easier for franchises to access digital marketing services with that budget and expand their local reach: “Ultimately, co-op is about getting businesses to change their behavior.”

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Kucharz, who formerly headed up CBS Local Digital Media and now serves as a special advisor to CEO Les Moonves, spoke next about the evolution of media, with particularly emphasis on how traditional media really need to make better use of audience data to serve people the kind of content they actually want to consume.

“Use tools to listen to what the people in your markets are talking about on social media and other platforms,” he told the audience. “They may tell you that they want to hear about town council meetings, but according to their Facebook activity they actually want to hear about the Trump administration and Russia.”

Meanwhile, he said, the digital ad space is “murky at best.” Kucharz noted that, aside from Facebook and Google, digital ad growth has been sluggish in recent years, and even local content is becoming increasingly commoditized. Meanwhile, he said, media companies are coming to rely more heavily on Facebook to drive people to their brands.

“If Facebook were a local media company, everything would work together, not apart” he said, referring to disparate elements like aggregated data and content, local events, and cross-platform revenue. “Facebook is a platform, not a media company. It aggregates data. You’re all putting your content there and by default your data is being aggregated there.”

This reliance on outside platforms is changing the the legacy model where publishers and broadcasters traditionally produced content that built traffic that then built revenue, he said. Putting out content onto social media and other platforms means it is no longer driving audience to you or building your brand, and it’s sending revenue to the platforms. Meanwhile the audience is being trained to go to third-parties, and consumption is evolving into an on-demand world.

“When you’re building a brand you are a media company,” siad Kucharz. “But the more you move over to the platforms, the less your business scales.”

He suggested that media companies needed to find ways to “do fewer projects well.” Rather than be distracted by every initiative, and invest small amounts of budget in a scattered way across new technologies, the key, he said, is to focus on a few things, and then give them the significant resources they require to have a chance at success.

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Another speaker who touted the importance of embracing the new media landscape with a certain self-reliance was McClatchy’s Chris Hendricks, who talked about how the company had expanded its video efforts, ad had recently created a lab in Sacramento to experiment with VR/AR and 360-degree video. He said that these kinds of forward-looking experiments and buildups were vital, even while media companies watch the bottom line in their current offerings

“Don’t think that just because you are growing display advertising revenue that everything is good,”  he said.

Moreover, like Kucharz, he suggested publishers need to think long and hard about their strategy when dealing with platforms like Facebook. He noted that McClatchy’s position is to place links, but not to put the full content of any article on another platform. The point is to “have a distribution strategy and think it through,” he said.

David Hirschman is a co-founder of Street Fight.