Online advertising has the potential to yield "margins that would make the Mafia blush," says Andy Perdue, interactive media director of the Tri-City Herald. At the recent American Press Institute seminar, "Advertising Leadership for Community Markets," Perdue presented strategies that his newspaper's Web site, tricityherald.com, is using to bring high profits at low costs while boosting employee productivity. Among his "Big Ideas:"
Big Idea 1: "Top Jobs" is Top Moneymaker
"Top Jobs" are an up-sell of employment classifieds. An advertiser who lists a top job gets a liner text ad on tricityherald.com. These ads target the casual job seeker who might not otherwise see the ad. The ads are rotated on the site for a period of seven days. They take up very little space, but are extremely effective. Since the paper launched Top Jobs in 2004, the percentage of classifieds that are upgraded to Top Jobs has reached 50%. The only cost to selling these ads is additional commission.
Keys to success:
Competitive Commissions
Although the sales people work in the classified department, Perdue compensates them from his own budget. He pays 10 percent commission for Top Job sales. In addition, he rewards staff with dinners and iPods.
Aggressive Pricing
Perdue first charged $30 a week in June of 2004. Prices steadily increased for the next 25 months. They are now at $75 a week. Perdue says he evaluates the prices at the end of each month, and adjusts them according to popularity. Because these are "Top Jobs," after all, he doesn't want too may of them upsold.
What's next:
This idea can expanded to other products like top rentals, top homes, and top cars. Because the tri-cities area is in the second-largest wine region of the United States, Perdue is exploring the introduction of a "Top Wines" section.
Big Idea 2: Yard Sales
Tricityherald.com now maps yard sales online that are listed in the print paper The map is sold as a bundled package for customers who call by Thursday at 9 a.m. For $19, advertisers get a four-line ad in the paper that runs for three days, a yard sale kit that includes a sign and stickers, and placement on the interactive map. Online users can then search for yard sales by time and location. Revenues are split 50/50 between advertising and online. An external vendor called Classified Concepts manages and hosts the map. Paying this company's fee is the only cost. Since launch, the upsell percentage into the online map has reached 90%. The paper plans to run the interactive map for as long as it's profitable, most likely from April thru October of each year.
Keys to success:
Yardcast
Each week, Perdue and his team stop by a randomly selected yard sale and make a brief video of it, which they call a "yardcast." The team talks to the sellers, tries on clothes for sale, plays with toys for sale, and comments on the various items available. The team also surprises the lucky yard sale hosts with donuts, coffee and balloons. Perdue says that the yardcasts have humanized the paper and created a yard sale "culture" in the community. Both shoppers and sellers now anticipate these yardcasts.
Promotion
Tri-City Herald promotes the yard sales heavily online and in the newspaper.
What's next:
Perdue suggests that interactive maps can also be used for real estate. Homes and apartments for sale can be plotted and searched as well. A business map may also be profitable. For example, the Tri-City Herald could add an interactive map that plots local businesses that advertise in the annual "welcome to the area" special.
Big Idea 3: Innovative Print Ads Online
Like many other papers, Tri-City Herald gives print advertisers the opportunity to buy an online ad with the print ad. However, a mere duplication doesn't work. Instead, the newspaper adds value by making the online ads more interactive than the original ad. For example, many recent ads on the Web site feature animation. Right now the paper charges a flat rate rather than a fee per page view for each ad.
Keys to success:
Outsource interactivity
Perdue saves time and money by emailing the print ad to an Indian firm to work on overnight. The company then changes the ad into a more interactive format for a fee of $3 per ad.
Searchable ads
Tricityherald.com offers searchable advertisements for grocery stores and other stores that list products in their print ads. The newspaper hired Travidia and Harvest Info to make these ads.
Big Idea 4: Revamp Banners
Banner advertising is not dead, says Perdue. In fact, selling fewer ads but adding value has increased revenue at the Tri-City Herald. Currently, advertisers buy spots for a period of six months to a year. Perdue has identified areas of the Web site that are conducive to displaying long-term advertisements, such as the photo gallery and "oh-Baby" section.
Keys to Success:
Sell audience, not content
Perdue suggests selling ads on the Web site based on the demographics of the viewers rather than the content of the articles. For example, Perdue avoided selling funeral home or florist ads for the death notices section of tricityherald.com because people who need those services are going to seek them out anyway. Instead, Perdue aimed to sell those spots to grocers because the audience consists of locals who just want to know the latest community news.
Sponsorships
Selling sponsorships as opposed to simple ads gives value to the advertiser by branding a newspaper feature with the name of the advertiser. The advertiser is also mentioned at the top of the page, not the bottom. Sponsorships are also a long-term sell for the newspaper. Perdue is currently exploring sponsorship possibilities for the photo galleries, weird news section, and weather.
