October 15, 2001
Interview
SUMMARY:
This fall's 2002 budgeting season is one of the toughest many online publishers have ever faced. How do you project numbers in a marketplace that's changed so rapidly in the past 24 months? And, how do you forecast expectations for revenue streams, such as online subscriptions or wireless ads, which you didn't even have a year ago?
We pulled Belo Interactive's VP Sales Wes Jackson out of one of his own budgeting meetings last week to find out what he's projecting, and how he plans to keep online ad sales growing despite the economic downturn. Belo is one of the largest publishers of online newspaper and TV sites.
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Belo Interactive is the online arm of one of America's largest media companies, Belo, which owns newspapers, cable TV stations and 34 Web sites in Texas, the Northwest, the Southwest, Rhode Island and the Mid-Atlantic.
Overall, at a time when many online divisions of print publishers are laying off, Jackson says Belo's commitment to online remains firm. "We won't grow as aggressively as we did from 2000-2001, but net growth will be up and there's a commitment from Belo to the industry -- we're staying the course."
Here's a summary of what Jackson sees coming up for ad, subscription and archive sales:
Online ad sales
Jackson credits Belo's current strength selling online ads to the fact that both online-only sales reps and offline sales reps can sell online ads. Whoever has the strongest relationship with the client gets the account. "It allows us to go get business we don't normally get." Although sometimes reps bump heads, Jackson says, "We've got pretty good morale here."
He's hired a team of online account execs whose job it is to help offline sales reps sell online ads. These AEs do everything from scheduling ads, offer creative advice and help train sales reps in the ins and outs of online ad selling. This program has worked so well that Jackson plans to hire more AEs next year.
Plus he's launching a new initiative -- an online advertiser client service department. This department will provide hands on assistance, including consulting and creative production when needed, for agencies and advertisers that don't have much online experience. The goal is aggressive. Jackson hopes the new department can raise Belo Interactive's average ad click through rates to triple the national average! "Our stated goal is .75% click rate for the overall campaign. On top of that - it's not just a click game - we'll help improve the quality of the creative for better branding even when they don't get the click."
"So every dollar you spend with Belo is worth triple the average, by the end of first quarter next year."
CPA deals
In the past Belo has only accepted a handful of CPA (cost per acquisition) deals. While Jackson isn't ruling out accepting more of them, he says, "It's gotta be pretty dang good -- the product or service, the pricing and the creative." He echoes the thoughts of many publishers when he says, "I'm not really excited about CPA. I don't think anybody is. CPA deals are good for the advertiser only. Therefore they are not sustainable. It ignores every value proposition outside of just the actual sale and it does not effectively measure sales generated outside. I'm sure it's complained about by every VP Sales around the country."
Wireless ad sales
Belo was an early mover in terms of offering content, such as The Dallas Morning News, via hand-held wireless devices. However, they have yet to sell a single wireless ad campaign yet.
Jackson says, "We think there's a business out there, but I think it's suffering from what the entire industry is suffering from." So he's definitely budgeting in some wireless ad sales for 2002, but not aggressively.
Classified ad sales
The recent IAB (Interactive Advertising Bureau) report showed that online classified sales were one of the bright spots for publishers this year. Belo Interactive's award-winning classified sites, such as The Providence Journal's Projo.com Wheels section, helped the company take advantage of this upsurge.
Jackson expects this success to continue in 2002. He explains, "It's not a very difficult decision for an auto dealer to place an ad where people are looking to buy cars. That's as simple as it gets - an efficient use of ad dollars. As we see the Internet evolve into a very targeted marketing medium, it becomes in effect a market of one-to-one relationships. Online is a great way to find a new job, car or home. I've bought two cars and one home online myself!"
Ads sold against search results
Jackson feels there are real opportunities in the search results ad sales arena, but unfortunately Belo's technology isn't ready to take advantage of them yet. The Company is actively investing in better search tech to enhance the quality of the user experience, and he expects to be able to make substantial search-related sales by the end of 2002.
Email newsletter ad sales
Various Belo Interactive properties publish a total of about 35 different email newsletters from daily weather alerts to weekly sport team news. As you might imagine, heating, air conditioning, local utility, and roofing firms have advertised in the weather newsletters with real success. And lots of advertisers (especially in the automotive field) want to sponsor Belo's 'Inside Valley Ranch' daily and weekly newsletters on the Dallas Cowboys.
Jackson is definitely bullish on email newsletter ad sales for 2002 -- especially for HTML editions.
He's also excited about selling ads in Dallas' new 'My Specials Direct' service. Since this launched in July about 15,000 readers have opted-in to received special offers via email. Since the list hit critical mass a month ago, Jackson's team has sold six accounts on a per name basis of 15-38 cents. He says, "For the investment, it's a great return. Most interestingly the banner ad campaign running simultaneously increased click rates by 15%." He foresees some profits worth writing home about as the list gets bigger.
Email newsletter subscription sales
Using ClickShare's back-end tech, this Fall Belo started testing switching its most popular email newsletter on the Dallas Cowboys from free to paid. The paid subscribers will still see ads. Jackson explains, "The subscription model to me is the ultimate consumer embrace of the quality of your content. Our overall list of users will go down, but in the end it will be more valuable to every advertiser. And consumers are willing to pay for quality. Subscriptions and ads becomes a healthy business model just like newspapers and cable."
The test has been successful enough so far that Belo Interactive's entire management team has agreed to continue rolling out the model with other newsletters, including a Spanish language sports newsletter and a recipe newsletter, in 2002. Jackson says, "We'll have various pricing strategies to see what price pops and what type bundles make the most sense."
His prediction: "Next year it will be a small but significant part of the business. It's not gonna be a runaway freight train. It's a good start for us that will continue to grow over the next five years and become a significant part of interactive revenues."
Article archive sales
Belo has been making money from archived article access online for years now, since before the Interactive division even formally existed. Jackson says, "There's been slow but progressive growth in volume, although not at the same growth rate as Internet usage. I can't explain that. But, it's well worth doing. It's good money that requires not a lot of cost."
Useful links related to this article:
Belo Interactive
http://www.belointeractive.com
ClickShare
http://www.clickshare.com
