LMC Aims to ‘Think Completely Differently’ About Future of Local News
The Local Media Consortium, which is made up of more than 75 companies with 1,700 digital publications, has gone through a lot of change recently, and much more is on the way.
Right now, the LMC is in the middle of a search to replace recently resigned CEO Rusty Coats, who was part of the group seven years ago during its earlier incarnation as the more narrowly defined Yahoo! Newspaper Consortium.
In this Q&A, LMC Board Chair Chris Loretto, who is executive vice president of the newspaper chain Digital First Media, talks about what the consortium is looking for in a successor to Coats. He also homes in on the LMC’s resolve to “think completely differently” about achieving the sustainability of local news and meeting the consortium’s ambitious 2018 goals.
The LMC went through a major organizational change in the fall of 2017. What did that mean?
Prior to October 2017, the LMC was a partnership and not an actual entity—a company. Rusty’s vision, and the board’s, was that we could create more benefit and execute at a higher level of strategy for the industry and our membership by turning the LMC into an actual entity. Then, we would be able to pursue additional partnerships and contracts.
Removing any constraints allows the LMC to generate more revenue and achieve greater cost benefits for our members.
What’s happening in 2018 with the LMC’s digital strategy, which is your major responsibility at your home company, Digital First Media?
The biggest challenges for the LMC and the local news industry are the concerns around transparency, viewability, and fraud, which produce disconnects between buyer and seller.
There are two issues from those disconnects. The first is the pressure on our publishers’ ad-inventory volume. As we clean up areas, some members could have less inventory to monetize. We see some members removing ad units to increase overall viewability for their sites and removing certain ad units through Better Ad Experience requirements.
The other issue is yield and what publishers can do to increase it. Today’s marketplace forces publishers to be aggressive on driving yield to offset volume declines and continue growing revenue.
Certainly, the Interactive Advertising Bureau’s ads.txt has promise to offset some of this by creating transparency and reducing fraud. The LMC was an early evangelist for this effort, and we have provided training and best practices to our members. Though the LMC has no mandates with members, we believe we have really moved the needle, especially across our large and medium-sized companies.
Speaking of the relationship between the consortium and its members, Rusty Coats said recently the LMC can “lead its members to the water” on new policies, but it’s up to them—individually—to convert those policies into action. Your view, as board chair?
The LMC will continue to collaboratively work with its entire membership on adopting industry guidelines and best practices that drive positive impact for their businesses. While consistent adoption would be great, ultimately each member company determines how and at what level they will participate.
What’s at the top of the LMC’s agenda in 2018?
We have a two-prong strategy. First, we absolutely support and participate in initiatives that are going on externally, like the IAB and Digital Content Next’s efforts to clean up the ecosystem.
Secondly, we are very proactive in pursuing internal strategic initiatives that are of direct value to our members. We formed a series of strategic committees in 2017, which will continue into 2018. These committees are focused on viewability, ad quality, and ad blocking.
The mission of these committees is to get the full membership of the LMC to understand the scope of the issues and how they directly impact our members’ businesses. Then we do what we do best, finding solutions through partnerships to help address the problems head on and then scale those solutions to drive better outcomes. We have done this at scale with many partners including Google, Facebook, Centro, Monster, and Legacy, to name a few.
Finally, through our strategic committees, we want to develop best practices, constantly improve them and evangelize across our membership.
Advertisers are getting restive about the value of the inventory they buy. What’s LMC’s response to those concerns?
The LMC has a massive amount of audience, a massive amount of scale—470 million-plus monthly unique visitors, 4 billion-plus monthly page views. We want to ensure that the LMC and its members have the highest quality inventory that is trusted by buyers and stands out based on industry standards. The goal is to drive down and have the lowest levels of fraud impacting our inventory, the best transparency and viewability, the highest quality of brand safety.
We do this through initiatives I cited earlier and through our private marketplace in programmatic advertising, the LMC Exchange, which offers more than 2 billion ad impressions per month to agencies and brands.
What can the LMC’s buyers expect to see in 2018?
To a buyer, the LMC immediately presents quality inventory that is brand safe with real users who are highly engaged around local news content.
The goal is to have best-in-class metrics in regards to brand safety, viewability, and fraud to position us in the best possible light with the buying community.
We are constantly working at improving the quality of our ad impressions, data capabilities, and ease to transact with our clients. With everything going on around fake news and brand concerns, we believe the LMC is strongly positioned for FY18 and beyond.
Facebook has made a series of three major changes in its News Feed. In a couple of cases, news content overall is being replaced by what Facebook members generate through interaction with their family and friends. In a third case, Facebook has begin promoting local news specifically. How is LMC reacting to these changes?
We have created a very strong relationship and partnership with the people at Facebook. We think the interests of the LMC are well represented and we will continue to work on Facebook initiatives that benefit our members. Our belief is that some of the recent Facebook changes can have positive impact on local news, and we continue to push for those. Changes in Facebook’s News Feed are a great reminder that our member companies need to make sure they maximize a wide and diverse portfolio of external traffic sources.
With that said, though, it is Facebook’s platform, and they certainly will make decisions for their own best interests.
What’s significant about your relationship with your major partner, Google?
The most significant thing about working with Google is their willingness to engage, listen, and develop collaboratively. We have had a strategic partnership with Google focused across many areas of our ad revenue businesses for a long time. The partnership has driven significant value and is a key component in our member’s digital revenue success.
Over the past few years, Google’s strategy with media companies has certainly evolved beyond just ad revenue. Efforts such as Google’s News Lab have helped our newsrooms across all markets to produce better digital content and create deeper relationships with our users. The LMC is also excited to hear Google’s commitment to help media companies drive consumer revenue through digital subscriptions. The LMC is currently participating in the discussion and plans to play a key role within the initiative in 2018.
Another initiative we have invested significant time with Google is around their Fuse product. Fuse provides insights we didn’t have previously around content sources that are most valuable to our publishers—like what referral channels produce the most revenue. It’s centered on the unifying metric of “average revenue per users,” called ARPU. It is a significant benefit for our publishers to understand who their users are, where they come from. These insights can help media companies adjust their resources and develop strategies where they get the maximum value.
We want the Fuse tool to be in the hands of our members and have them leverage it to produce better outcomes, and we’re starting to do that in a real, meaningful way. Many members are finding that email newsletters deliver higher ARPU than, say, social. With 1,700 sites in our membership, the next step for the LMC is seeing what insights we can glean at a macro level to change behavior and drive better outcomes at scale for our members.
Fuse was important in 2017. It will be very important in 2018.
Digital First Media and its majority owner, Alden Global Capital, are embroiled in controversy over their extensive editorial cost cutting to maintain double-digit profit margins. DFM’s flagship paper, the Denver Post, has even editorialized against this cost cutting, which it says threatens to reduce the paper to “rotting bones.” In these circumstances, does your role as executive vice president of DFM — a major member of the LMC — impact the effectiveness of the consortium in protecting the brand safety of its members?
Any individuals speaking on behalf of the LMC are speaking as part of the collective LMC effort and will not comment in that capacity about individual member companies.
What kind of person are you looking for to succeed Rusty Coats as CEO?
Rusty did a fantastic job getting us where we need to be. His successor will have the same commitment, passion, and philosophy to impact our members and the industry in a positive way. We’ll be looking for someone who is very strategic, understands the LMC vision, has great industry relationships and tremendous amounts of energy and focus.
Where do you expect the LMC to be by the end of 2018?
The area we’re most excited about is the ability to drive more transformative and innovative change in 2018.
We’ve done a significant amount of work and driven a significant amount of value for our members and the industry under Rusty’s leadership. Moving forward, we need to be bigger, bolder, and think completely differently about how we achieve sustainability for this industry and how we can drive this goal at a grander scale.