Prior to joining station KTVZ in Bend, Ore., Barney Lerten's only TV experience was the media club in high school. Still, Lerten plays a critical role in the station's growth strategy these days. As digital content director, he's grown page views on KTVZ.com from around 500,000 in March to a million in November, making it the most trafficked site in News-Press & Gazette's broadcasting group. The station added a cleaner layout, richer video, more breaking news, and clips from CNN and others.
And while hot news was once held for the evening's newscast, KTVZ now sends it straight to the Web. “Every reporter knows to get the script to us to put it on the Web,” says Lerten. “They realize [on air and online] are feeding off each other, instead of cannibalizing each other.”
With seven stations in markets like Bend and Palm Desert, Calif., News-Press & Gazette isn't a broadcast powerhouse, yet it offers a window into why broadcasters of all sizes are scrambling to grow online revenue—and seeking staffers like Lerten.
Indeed, the face of local stations is changing dramatically, and the newsroom of 2008 is looking less and less like the newsroom of five years ago, or even a year ago. For one, it's getting smaller, as corporate cost-cutting and technological developments, such as automation software and the paperless advertising platform known as ePort, mean fewer bodies are needed to make the station run. According to a study from RTNDA and Ball State University, stations in Top 25 markets had an “average total staff” of 60.5 people in 2007, down from 72.4 in 2006.
To find ample resources for the Web, some managers are converting broadcast positions to Web ones. When a sports reporter gave notice at WMTV Madison, Wisc., the position was turned into a Web producer. LIN TV, meanwhile, cites a 50% increase in online staff in 2007, as head count stayed flat.
Still, managers everywhere are pushing employees to add digital duties to a pretty full job description. “We've added news without adding head count,” says Duffy Dyer, VP/General Manager at WTTG Washington. “We're asking staff to think about more than they're used to thinking about.”
Never before has the time been better for stations to grab Web revenue. According to Borrell Associates' 2008 Outlook: Local Online Advertising, $8.5 billion was spent on local online advertising in 2007, and that is projected to jump to $12.6 billion this year—much of it from the presidential candidates who increasingly find the Web an effective medium for delivering their message to a savvy demographic. Looking further ahead, WorldNow President/CEO Gary Gannaway says online political spending will likely surpass on-air as soon as the 2012 election.
But a large chunk of Web revenue remains stuck on the table for stations. Borrell reports that Internet “pure plays” like Google grabbed 43.7% of that $8.5 billion. Newspapers tallied 33.4%, while broadcast TV took just 9.3%. According to Internet Broadcasting President/CEO David Lebow, 21% of media consumption occurs online, while only 7% of media dollars are spent there. “TV has been its own worst enemy,” says Steve Safran, senior VP of Media 2.0 at consultancy AR&D. “If it can change and play by Web rules, there's multiples more money to be made.”
Growing the digital side of the business at News-Press wasn't simply a matter of repurposing news content online or encouraging the weatherman to blog about the merits of hot cocoa on a snowy day. It was nothing less than “changing the culture,” says Digital News Director Mike Stutz—making the Web part of every staffer's workday and bringing in people to concentrate solely on online. “I'm an old newspaper and TV guy, so this is a change for me,” Stutz admits. “But we see where the business is heading, and we worked hard to position ourselves for the future.”
'A WHOLE NEW SHIFT IN THINKING'
As viewers increasingly get their news from sources that don't include TV, station managers across America are looking to grow their Web business. The mandate is tricky. Besides making do with fewer bodies, the station Web business is what one consultant calls “an unproven model”—risky and lacking in many successful precedents to copy.
But as many see broadcasting as a mature business, stations have little choice but to drastically rethink and revamp their operations to focus on the Web. “It demands a whole new shift in thinking to reengineer the process from top to bottom,” says Steve Ridge, president of television at media research firm Frank N. Magid Associates. “If you're writing a new play, you need to cast new characters.”
Stations' increased focus on the Web has given rise to new job titles and descriptions throughout the industry. At WJAR Providence, Kim Reis took over as general manager of the station site in May. At WNBC New York, President/GM Frank Comerford is hiring a VP of digital operations, at the same level as the news director and general sales manager. The Fox O&Os typically have three to four Web producers apiece sitting “within earshot of the assignment desk,” says Fox Television Stations Digital VP Ron Stitt, while KPIX San Francisco made waves when it hired Brittney Gilbert to be its full-time blogger. (CBS O&O digital chief Jonathan Leess says all the CBS-owned stations will eventually fill a similar post.)
Hearst-Argyle, which revealed its new-media priorities by putting broadcast executive Terry Mackin in charge of its digital operations a year ago, has 22-year-old Web veteran Joel Holland heading up “Your Fate '08” on New Hampshire station WMUR's Website, and is considering having him report from state primaries throughout the station group. Holland says his youth makes for a fresh perspective, a grasp of viral-marketing media such as YouTube and Digg, and a way to reach younger viewers who perhaps don't watch the news. “As so many eyeballs are moving from the TV screen to the computer screen, the media model has to change and adapt,” he says.
With the new job titles popping up, they seem to have laid to rest a position that smacks of Web 1.0: the jack of all trades/master of none “Webmaster.” “We eliminated the position two years ago,” says Meredith VP of Broadcast Solutions Tom Cox. “It's an antiquated title that reflects a different era.”
Stations are frequently looking outside the TV business for their hires, a move that might've been seen as blasphemy a few years ago. KPIX's Gilbert ran the popular Nashville blog Sparkwood & 21 before being hired to run a blog aggregator at WKRN Nashville. (Former WKRN general manager Mike Sechrist says the project “wouldn't have gotten anywhere” had a traditional newsroom person been in charge of it.) Prior to becoming KTVZ digital director, Lerten toiled at wire service UPI, a daily paper and a Web startup. Holland produced children's educational Web videos as a teen.
In many cases, GMs would prefer a new hire not have broadcast experience. “I love to see people coming out of newspapers, magazines, etc.,” says LIN Interactive VP Robb Richter. “You don't have to have worked for a TV station to work here.”
BEEFING UP SALES
Stations are also readdressing their online sales needs. In its 2008 Outlook, Borrell warned against relying solely on traditional broadcast salespeople: “There is increasing evidence to support the idea that a greater investment in an independent online sales force will be necessary to continue the growth these properties have enjoyed for the past few years.”
Several station managers speak of a philosophical shift—moving away from throwing in the Web as value-added for advertisers, a practice Leess says the CBS-owned stations broke from two years ago. When Sechrist was running WKRN, he sent a clear message to the staff by shifting one of his most veteran salespeople to sell solely for digital. At LIN, regional Internet directors work with an Internet sales manager in each market.
Increasingly, managers say, the Web is sold in every deal, and every salesperson takes part in selling it. “Online revenue will continue to grow as sales catch up to consumer usage,” says Lebow. “Some stations see it as a brand extension, but the smart ones see it as product.”
As stations brainstorm new growth plans, these Web-savvy wizards will only be more in demand. Like a restaurant company adding more outlets, several managers say adding standalone Websites, often with dedicated staffers, is a promising way to grow revenue. KPIX's Gilbert will unveil a blog aggregator, featuring the best of hundreds of Bay Area blogs, in the coming weeks. WTTG introduced MyVoiceDC.com, featuring blog entries for affluent African-Americans in Washington; WNYW New York will roll out a standalone site to join its sports-themed MyFoxLocker.com in 2008; and KNTV San Jose recently launched the hyper-local community news site NBC11hometown.com.
This past fall, KTBS Shreveport rolled out KTBS Network—a series of highly targeted, sponsored sites about topics of local interest, such as football, politics and nightlife. “There's potentially a big pile of [Web] money there, but you don't make it from one site,” says Sechrist, now consulting for stations.
To be sure, station managers are approaching new media with extreme caution. Many recall this same talk about the digital revolution just before the dot-com bubble burst, and are apprehensive about investing significantly in it again. And while tales of double- and even triple-digit growth in Web traffic are common, online still represents a single-digit percentage of a typical station's revenue; one general manager in a Top 5 market says the Web represents less than 1% of total revenue among stations in the DMA.
But the smarter stations are increasingly thinking of themselves not simply as TV outlets with Websites, but local media companies offering one-stop media shopping for their market. Toward that end, NBC changed the name of its broadcast group from the NBC Owned-and-Operated Stations Group to NBC Local Media Division in November, with president John Wallace stressing that stations “produce local content for a multitude of platforms beyond their primary channel.”
Such broadcasters are thinking long-term, but many are seeing the returns already. At LIN, online revenue was up 58% in the third quarter of 2007, compared to Q3 2006, and 73% year to date—thanks largely to the new Web hires. At Meredith, two Web-only editors and an account executive per station has translated to a 187% increase in revenue year over year. The CBS-owned stations have seen “phenomenal growth,” says Leess, since adding staffers and tweaking their philosophy, boosting Web traffic 300%-400% from 2006 to 2007. Traffic grew 40% on KTBS.com after it launched KTBS Network.
But achieving such growth is not as simple as slapping “Web” on staffers' business cards. “It's not about having a box that says 'Internet' and just adding people to the box,” says Stitt. “It's retooling the entire organization for digital media—and getting everyone involved.”