Scripps Tries to Steer Local Ads to Papers’ Sites
KNOXVILLE, Tenn., is a place where residents root for the Vols, prefer their iced tea sweet and turn to the Knoxville News Sentinel for local coverage. The paper has been around since 1886, and it has entered the Internet age with a Web site featuring videos and blogs.
But central as The News Sentinel may be to the local community, it is not attracting local advertisers to its Web site. This is a problem that newspapers across the country are having. Local advertisers, though, are spending more and more money online — but it is mostly going to portals and stand-alone Web sites, not newspapers.
Local advertisers are expected to spend almost $12.9 billion online this year, almost five times what they spent in 2004, according to Borrell Associates, a firm that researches local media. But while newspaper sites received 44 percent of local Internet revenue in 2004, that figure dropped to 27 percent this year, according to Borrell.
Now, publications like The News Sentinel, which is part of the E. W. Scripps Company, A. H. Belo and McClatchy are revamping their online sales to capture local ads. Since so many things are hurting newspaper companies — like rising printing and distribution costs, credit troubles, decreasing circulation and plummeting print advertising — online growth is essential.
“That’s where we have most of our sights set for the foreseeable future,” said Rusty Coats, vice president for interactive at Scripps. “That’s the largest source of our growth across the company.”
Mr. Coats is so confident about the strategy that he projects that Scripps Web sites will sell enough ads to support the staff and costs of the print and online newsrooms by 2012, without staff cuts. If Scripps could achieve that, it would mark a turnaround for it and for other newspaper publishers, who have been slashing costs to stay alive.
Until recently, newspapers’ sales employees have focused on big local accounts, not small ones.
And newspapers, especially local ones, did not emphasize Internet-only sales in recent years. Instead, the sales forces sold print ads and threw in Internet ad campaigns for those print advertisers. Print advertising at newspapers was down 16 percent in the second quarter, according to the Newspaper Association of America. When print sales decline and the ads are bundled, online sales decline.
Scripps, where online revenue dropped 8 percent in the second quarter, has begun overhauling the way it sells local ads.
At Scripps, about 10 percent of the advertising revenue comes from the Internet. Of that, 68 percent is tied to print ads, said Mark Contreras, the senior vice president for newspapers.
The revenue from online advertising that is tethered to print is down about 17 percent this year compared with last, Mr. Contreras said. The online-only revenue is up almost 30 percent.
So Mr. Contreras is reshuffling ad commission plans at Scripps. Currently, 95 percent of his sales employees’ bonuses is based on print sales, he said, and he will lower that to 70 percent by raising commissions for online ads. He is also adding sales staff who sell only online ads.
He is even trying telemarketing, setting up a call center where representatives will call small businesses in Scripps markets.
Scripps is also using the new Apt system from Yahoo, which was introduced in September. Apt stores and displays ads on newspaper sites, among other things, and lets newspaper sales teams sell ads that appear on local Yahoo sites.
Apt also lets local newspapers use Yahoo’s behavioral targeting capabilities. Yahoo can deduce the likely age, gender, location and interests of someone looking at a page and show them a relevant ad. If someone types “Brazil” into Yahoo search and visits the Yahoo travel site, Yahoo might note that the person is interested in travel. Later, when the person (or, technically, the same Web browser) visits the News Sentinel site, Apt can display an ad for airfare to South America.
Scripps sites tried behavioral targeting in the past but it was unsuccessful, Mr. Coats said, since Scripps couldn’t sell a big enough target audience to interest advertisers. With Apt, though, since newspapers can sell ads on certain Yahoo pages — like Yahoo Mail — they can gather a big enough group.
The Knoxville paper switched to the Yahoo system two weeks ago.
Mr. Coats said he expected that with targeted ads, Scripps sales staff could sell ads at two to three times the current price. That may be high: The News Sentinel’s director of digital media, Jay Horton, said the plan for his site was to raise the average charge to $12 to $15 per thousand impressions (the number of times an ad is seen) from $8 to $12.
Karl Thomas, the director of marketing at Ripley’s Aquarium of the Smokies in Gatlinburg, Tenn., tried the system during its test phase.
He ran an ad on aquarium admission, targeted to women with children, and received a “really good response,” he said.
Scripps, the MediaNews Group, and Cox are among the first newspaper companies to use Apt.
Other publishers are trying to ignite online sales, too.
At McClatchy, about half of the online sales are tied to print, said Christian A. Hendricks, the vice president for interactive media. In the third quarter, online advertising sales rose 9 percent from a year earlier; online-only sales rose 27 percent, he said.
McClatchy recently changed its commission plans to give sales representatives more incentive to sell online alone.
At A. H. Belo, Internet revenue fell 19 percent in the third quarter from a year earlier. Executives are trying to remedy that. The company is starting to use telemarketers to woo local florists and barbers, and, because small businesses do not usually have their own graphics experts, Belo is building a make-your-own-ad tool.
The company has also tested the Apt system at its Dallas Morning News Web site and is “having huge success” so far, said Donald F. Cass Jr., executive vice president of A. H. Belo.
“There’s opportunity to do things we’re not doing today,” Mr. Cass said. “We just need to get about the business of doin
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