“What Local Web sites Earn:” Borrell Associates data support IB revenue recommendations

By: Arul Sundaram, VP Business Strategy

Gordon Borrell Associates recently released their annual report: “What Local Web sites Earn”.  Click here to download the executive summary of Borrell’s report. Overall, the report is very much in line with IB’s own revenue strategic article, “Why Analog Dollars Don’t Need To Become Digital Pennies,” released at April’s NAB convention You can download a copy of our strategic article here.

Borrell estimates that the local online advertising will come in at $13.3B in 2009. While Borrell’s revenue numbers always come in higher than other industry analysts, we believe the trends in his data are both accurate and actionable. Specifically, Borrell finds that revenue growth is being driven by:

1. Search
2. Video (attached to classifieds / directories)
3. Email

IB identified these key products in our own recommendation that stations broaden their revenue base beyond strict sponsorships and banner advertising.

Looking forward, Borrell finds that the requirements for local media companies to win online will be:

1. Targeted audiences (at scale)
2. Relevant ad products
3. Qualified sales personnel

These recommendations, in particular, match what we laid out in our strategic article:

1. Targeted audiences
For most news sites, this means developing separately branded vertical destinations. Attaching vertical content and experiences to news sites has not yielded sufficient audience share, but media companies that have pursued a portfolio URL strategy have seen traction. Newspapers in particular have branched out developing local search and local classified sites.

2. Relevant ad products
Products should match advertiser demand and be delivered to targeted, relevant audiences: search advertising, long-form video in directories, targeted email newsletters. Even display should migrate toward significant audience reach and better audience targeting. See above re: newspapers building local search properties which are then paired with search advertising.

3. Qualified sales personnel
Match sales force to product – if product has lower average price, perhaps attempt a sales-assist model using telemarketing with a self-serve web interface. We had an anecdote in the strategic article about a firm in the southeast that generated significant revenue from a directory product by using a contract sales team. Other models here could be to bring in “Internet specialists” to complement the existing sales team, or to bring in a separate set of digital reps.

The other key stats that Borrell provided were a breakdown of the overall competitive landscape by share.

TV has an 8.6% share of local online spend (2008), approx 90% of which comes from display. TV share is down from 9.5% in 2007.

From a category perspective, IB estimates that the market breaks down as follows:

• Search / Directory (~60% of local online spend)
  • Competition: YP and pureplay
• Classifieds / listings (~20% of local online spen)
  • Competition: Newspapers and vertical pureplay
• Branding (~20% of local online spend)
  • competition: Newspapers and TV

These numbers indicate that TV and newspapers are in direct competition for specific advertiser budgets, but that larger spending can be captured by branching outside of brand advertising.

For more detail on the Borrell study or on the local advertising research IB presented at the Customer Advisory Group meeting in April, please contact Dave Michela: dmichela@ibsys.com.

Behavioral Targeting And Viewer Privacy

Selling Successfully, Selling Responsibly

By: Luke Edson, Chief Revenue Officer

Behavioral targeting remains a hot topic for advertisers and industry watchers alike. You may find agencies and clients asking questions about your site’s behavioral targeting capabilities, focusing on data collection sources and privacy. We want to arm you with information to field these questions.

The IB Local Media Network is powered by the Collective Media AMP platform. Collective Media utilizes data gathered from multiple online and offline sources, including search, intent and transactional behavior. All data is anonymous, and includes no personally identifiable information from users. This is a very important concern, and you can head it off immediately and confidently.

Collective Media and its third party data providers such as NextAction, Blue Kai and Almond Net are all members of the Network Advertising Initiative (NAI), an industry organization committed to consumer education regarding privacy, and establishing business standards practices for data management. The following information can be found on NAI’s own Web site:

About the Network Advertising Initiative (NAI)

The NAI (Network Advertising Initiative) is a cooperative of online marketing and analytics companies committed to building consumer awareness and establishing responsible business and data management practices and standards. As increasingly sophisticated online advertising technologies evolve, consumer concerns about their impact on online privacy mount. The NAI is prepared to meet these concerns with both effective industry self-regulation and sensible protections for online consumers.

Consumers
Since 1999, the NAI has been working with the online advertising industry to provide consumers with clear explanations about data collection, data usage, and choice. Central to our standards are the privacy concepts of notice, consent, control, and dispute resolution.

Industry
In conjunction with industry leaders, regulatory agencies, federal and state legislators and others, the NAI has also addressed the business dimension of the privacy debate through the development of actionable self-regulatory standards that establish and reward responsible marketing behavior.

To date, the NAI has developed standards for 3rd party ad networks and cookies, spam, and Web beacons.

We suggest you take some time to review the NAI website to familiarize yourself with their standards and practices. Meanwhile, questions about IB’s partnership with Collective Media can be directed to IB’s Chief Revenue Officer, Luke Edson: ledson@ibsys.com.

IB’s Distributed Ad Products

Driving Results For Publishers And Advertisers

By: Erik Greenberger, VP Distributed Ad Products

IB’s Distributed Ad Products (“DAP,” formerly known as “BD”) used to consist of a handful of non-IAB deals on our hosted-partner sites. In an effort to deliver increased value for both our partner publishers and advertisers, we redefined our strategy late in 2008 to create a set of market-facing, performance-based products for distribution on hosted and non-hosted sites. As performance-based models grow in prominence, these Distributed Ad Products are already showing results in the first half of 2009.

We’re focused on three efforts to grow the revenue opportunity for our customers: adding more advertisers, optimizing our products and adding more distribution.

More Advertisers
IB has signed more than ten new advertisers so far in 2009, including blue-chip partners like ServiceMagic and Classmates.com. More advertisers equates to more variety for our users, driving higher click-through rates (CTR) and giving us a wider baseline against which to optimize our products. We are currently in negotiations with dozens of new advertisers, and expect to bring several on board before the end of the second quarter.

Product Optimization
A key part of creating a market-facing business is understanding how our products perform and how to improve them. Our recent technology investments enable us to track impressions and clicks at a granular level across multiple products, allowing us to analyze both CTRs and effective CPMs (ECPMs) in real time. The resulting avalanche of data enables us to test new advertisers and new combinations of links to maximize revenue for publishers and ROI for our advertisers.

More Distribution
Increased distribution enables us to bring in more advertisers at higher rates, benefiting our existing set of publisher partners. We’ve been talking to dozens of publishers about creating a revenue stream that is incremental to their display business. We are finding a receptive audience and are proud to announce that our successful Sponsored Content Links widget (often called “Links We Like”) is running on non-IB-hosted sites including Dispatch Broadcasting, Media General, Inergize Digital Media and KARE (Gannett); and that the Monster Career Center is live on the ABC Owned & Operated sites. The SCL widget is running between 150-250 million impressions a month and we have IO’s in front of five other publishers. These performance-based products are generating excellent results for both advertisers and publishers. We expect to announce several new publisher partners in the immediate future.

Look for more wins and announcements against our three key drivers – more publishers, more advertisers, and optimization – throughout the year.

IB Keeps Pace With Google In The SEO Race

Optimizing Your Site To Drive Audience

By: Andy Kruse, Manager, S3O (Search, Social Media, Syndication)

Search Engine Optimization, or SEO, is as much art as it is science. More than anything, it’s a race to stay up-to-date on the constantly evolving technology used by Google and other major search engines to find and classify the content on your site. IB’s SEO team works both proactively and reactively to ensure that both our technology and our editorial practices maximize the opportunity for your sites’ content to be discovered via search engines.

Google, the world’s dominant search engine, recently made an important change that will allow us to help you control the flow of search traffic to your site. Is this a big deal? The day it was announced, the best blog in the SEO industry wrote a post titled “The Most Important Advancement in SEO Practices Since Sitemaps.” So yes, we think so.

First, a quick bit of background: The flexibility of the ibPublish platform allows editors to publish a single story to many different areas of your site. For example, a story about the latest breast cancer research can appear in your site’s Health, Breast Cancer and News sections simultaneously. A cookie recipe could show up in the Food, Family and Holidays sections. Each placement of that story gets its own unique URL.

Google is now offering a chance for publishers to declare which of those URLs gets the search traffic by using something called a “canonical link element.” (Read more about the canonical link element in Google’s announcement.) IB responded to this important change by releasing code on May 5 that adds this element to every section front and every detail (story) page of your site.

What does this mean for your site? While Google and other search engines may discover the same story in multiple locations, we get the opportunity to tell them which version is the one they should pay attention to, We’re telling Google, “We know you found the breast cancer story in our News section, but we classify it as a Health story. Send the search traffic to our Health channel.” This solves the confusion for the search engine and helps us control the flow of traffic. Because Google recognizes the Health version of the story as THE breast cancer story, all of the “link juice” goes to that page — increasing its power and giving it the best possible chance to rank high against the competition.

As they did with sitemaps, Google is setting the standard  for how search engines should communicate with publishers. Yahoo and MSN have pledged to also abide, but so far, they have ignored the canonical element in more cases than they have followed it. As with anything in the world of SEO, this could change at any time.

It’s too early for such a change to have an impact on traffic, but one key measurement was noticeably up after the first month. The total number of pages that Google retains in its index for IB network sites was up about 50 percent from the beginning to the end of May. We attribute that growth to the elimination of duplicate content, because when search spiders can crawl without confusion, they’ll dig more deeply into the sites.

This most recent upgrade to your site comes as part of IB’s investment in ongoing SEO improvements that benefit all of our publishing customers. For more information about the search and distribution industries, follow S3O on Twitter, or contact andy@ibsys.com for a custom work engagement.

Metrics Musings

Your Feedback Drives IB’s Analytics Roadmap

By: Becky Engelhart, Research Specialist

We’re spending a lot of time at IB talking about “actionable data.” We want to provide you with information that you can actually use to drive your digital business forward. To that end, we recently issued a customer survey to those of you who use our WebTrends analytics dashboard. We’re thankful to the large number of you who responded with your feedback.  We’ve used it to make upgrades to your WebTrends analytics dashboards which we know you’ll find valuable.

Here are some highlights from the findings:

• More than three-quarters of the respondents called WebTrends easy to use.
• About 90% said that their needs are met by the referrals and pathing data currently available. 25% of respondents recommended improvements to meet their video reporting needs.
• Several participants identified a need for more training.

We are using this feedback to execute our analytics roadmap. Real-time video, story, and slideshow reports are being added.  In some cases, these reports are already ready and available to help you understand — in real time — what consumers are doing on your sites. We’ll also add a new pathing report, and update other reports in later upgrades.

A sampling of your comments:

• On training – “A full-blown manual would with tutorials and best-use examples would go a long way.” IB will issue a new manual as soon as our latest round of dashboard improvements is complete.
• On pathing – “Would love more internal pathing information” We are addressing this request with a brand-new pathing report.
• On video – “The video reports are not updated very frequently. It appears that I cannot get reliable results until 24 hours later.” New real-time reports are coming very soon.  “How many seconds did they watch before closing?” Our future plans include a video report showing percentage viewed.

We all appreciated the comment, “IB’s metrics team is top notch. I really appreciate the help I get from them.” Additionally, we loved the feedback on how we can better meet your reporting needs. We’ll be sharing the fruits of those efforts in the form of a new, easier-to-use WebTrends dashboard, featuring new reports meant to supply the data you can use to win.

We will be updating you soon on the new dashboard and reports. Thank you again for participating in the survey and for your valuable insights.