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May 17, 2001
Case Study

How Lee Enterprises Doubled Online Ad Sales at Local Newspaper Sites Across America

SUMMARY: Most traditional media companies have had a hard time figuring out how to handle media sales for their online divisions. Should you have an entirely separate sales team for online media? Or, should you ask your offline sales team to add online media to their plate? Lee Enterprises has come up with a unique solution.
Most traditional media companies have had a hard time figuring out how to handle media sales for their online divisions. Should you have an entirely separate sales team for online media? Or, should you ask your offline sales team to add online media to their plate? Lee Enterprises has come up with a unique solution. Read on....


Lee Enterprises (NYSE: LEE) owns 23 daily newspapers, more than 100 weekly newspapers and 86 Web sites in small to mid-sized markets across America such as Bismarck, North Dakota and Lincoln, Nebraska. While cities like this may not spring to mind when you think of the Internet, Director of Interactive Media Sales Greg Swanson says, "Many of these markets are surprisingly wired. For folks living in rural areas, the Internet's extremely powerful. For example, in Billings, Montana we're doing three million pageviews a month."

Swanson's job was to turn those pageviews into cash. But, he decided it was too expensive to maintain a local sales staff in each city dedicated to Web media. Instead Swanson decided to focus on training Lee's print ad reps to sell new media.

However, he found many of the reps were wary of it. Swanson explains, "While they consider themselves to be experts in print, many of them are not online experts. Their biggest anxiety is, 'what happens if I'm sitting in front of a customer and they ask me a question I can't answer? There are 10,000 things going on on the Web, what if my customer thinks I'm stupid?'"


First Swanson spent an enormous amount of time and energy on product development -- to create a single online media offering that would be easy for print reps to sell to local customers. He says, "We knew we had to have a stronger value statement than, 'we've got banners.' Our customers don't want to specifically buy on the Internet -- they want to have customers come in their door."

Swanson worked hand in hand with CityXpress, a company that integrates online editorial content with advertising and promotional products, to invent a new contextual advertising product for Lee's newspapers. Here's how it works:

A paper adds a new topical section to its Web site, such as Home & Garden or Bridal. Although it looks like part of the paper's site, CityXpress powers the section, providing editorial (drawn from a pool of relevant stories contributed by CityXpress writers and paper partners.) Instead of a variety of traditional banners, advertisers buy a text link to appear next to all relevant stories. So, the hotlinked name of a bridal shop advertiser would appear to the right of every bridal story.

Swanson explains, "Advertisers aren't buying banners, they're buying direct calls to action on editorial pages."

Viewers, who click on links, are sent to that advertiser's full listing in the paper's Regional Business Directory which includes all the standard components for effective online merchandising, including contact information, a map, coupons, and inventory listings.

Swanson keeps the prices low and the pitch simple. Contextual commerce listings run from $150-$200 a month, totaling about $3000 per year. He says, "Right now for most businesses, the Internet's going to add at most about 10% to their business. If they're rational, they'll be spending about 10% of ad dollars online. So the pricing model has to be relatively moderate."

To jumpstart sales, Swanson put together an eTeam of four online salesreps who are great at training and motivating. For the past year, Swanson and his eTeam have flown into a different city every two weeks to for a week of intensive training to teach the local print reps how to sell this new product. Each local newspaper has about 15 print sales reps. The eTeam spends Monday mornings on in-house training with the print reps. Then after lunch they split up for one-on-one activity. For the rest of the week, each eTeam trainer accompanies local reps on a series of one-hour sales meetings with current clients. By the end of the week, the team will have completed an average of 140-160 sales calls. Then they fly back to base camp for a week before doing it all over again in the next city.


Lee Enterprises' Internet revenues more than doubled in 2000, from about $1.6 million in 1999 to 3.25 million in 2000. Swanson's goal is to double them again for 2001, and he says, "We're on plan."

The eTeam averages $40k-75K per week of local training sales calls. Swanson is modest about this success, "Just because the week is so focused, we get great results. If we focused on selling Girl Scout cookies, we could have a really great week."

Instead, he is prouder of his team's achievements in helping print sales reps feel comfortable enough with the product, the pitch, and their own expertise to sell new media on an ongoing basis. He says, "If we can launch 10 special sections at $20k a section, it's another $200k a year in Butte. That's real revenue." And when you own as many properties as Lee Enterprises does, that real revenue can really add up.
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