In what can be arguably termed the golden age of local media, Local Media 1.0 (the period up to 2005), media companies thrived by super-serving small, loyal audiences. Media companies cultivated a balance of value, where high-quality content was offered to audiences who, in turn, provided unwavering loyalty and a marketplace for local sellers.
However, the transition into Local Media 2.0 (2005 to 2020) brought significant changes. Media companies prioritized the digital scale game to keep up with the digital revolution. The key metric became page views, seemingly at any cost. There was an increased emphasis on generating search traffic, creating social posts and leveraging third-party distribution to meet these targets. The goal was to drive more CPM-based display ads, a key performance indicator for media companies at the time.
This shift in focus displaced the once-loyal audience, replacing them with drive-by, single-page engagement audiences. The industry's digital strategy heavily depended on third-party algorithms for content discovery. The industry recently reached a tipping point when Meta, formerly Facebook, officially pivoted from news publishers to the creator community, further marginalizing traditional news outlets.
Unfortunately, the digital scale game has largely failed at the local level. Evidence of its failure can also be seen at the national and international levels, with large digital publishers like BuzzFeed, Vice and Vox Media announcing cutbacks and layoffs like those experienced by newspaper companies. This trend accelerated as private equity companies, realizing the limitations of the digital media game, became hesitant to back them.
The industry has often attributed its challenges to tech giants like Google, Meta and Craigslist. However, one could argue that WordPress is equally to blame. Before WordPress, creating a news website was a complicated and costly endeavor, providing a sort of protective moat. However, WordPress and other blogging platforms democratized publishing, enabling everyone to become a “publisher,” thus flooding the market and driving down digital advertising CPMs.
The second half of Local Media 2.0 marked a shift toward digital subscriptions, paid content, reader revenue and membership models. These models showed promise initially but were insufficient to offset the substantial declines in print subscriptions and advertising. Even The New York Times’ 9 million subscribers haven't offset its past advertising and circulation revenue.
Introducing Local Media 3.0
Having understood the successes and failures of the previous eras, we can now introduce Local Media 3.0. This new era of local media has been in the making for the past decade, but it's now ready to disrupt the industry with new rules, parameters and tools.
Signals and parameters of 3.0
The media landscape in Local Media 3.0 is vastly different. There are no barriers to entry in local media, meaning newspapers, television and radio are no longer protected by their capital investment moats or FCC licenses. IP or over-the-top distribution levels the playing field, allowing for more competition.
As a result of these changes, traditional boundaries in the media industry, or “swim lanes,” are disappearing. Different media types will cross these boundaries, resulting in a more diverse and interconnected media landscape.
Economic realities dictate that local media will not support the current number of newsrooms, leading to further consolidation and potential dilution of local news and information. Recently Sinclair Broadcast Group shut down five local news markets and replaced them with national and regional news.
In Local Media 3.0, the focus returns to super-serving small, loyal audiences with valuable local news and information. Engagement metrics should be more like your mobile app and digital edition data than your website.
Owning your audience relationship becomes paramount. This means collecting registration data and relevant information from your audience. Media companies must think like B2B publishers, understanding that information is the new currency.
Using engagement data to build audience segments is vital, and every user should be addressable for monetization, either advertising or transactional. Major companies like Google, Amazon, Apple and Meta derive their value from customer data. News media companies, with their longstanding relationships with audiences and abundance of content, have a prime opportunity to leverage this wealth of data.
The abundance of available content calls for a shift in strategy. Instead of attempting to cover everything, media companies should curate local news and data that are scattered around the web. This approach acknowledges that time is scarce and content is abundant. As such, the value of curation is often equal to or greater than that of original content.
Engaging local business owners
Historically, most local media companies have engaged with less than 1% of local businesses. In the eras of Local Media 1.0 and 2.0, publishers targeted the largest companies with the most significant ad budgets. In 3.0, the success metric shifts to owning as many local business relationships as possible and controlling their entire marketing budget. Local media companies must become omnichannel sellers, managing clients' marketing budgets across all platforms and helping local businesses navigate the entire customer journey.
Omnichannel selling has become vital to media companies’ future success. Media companies can alter their trajectory by owning an advertiser’s entire marketing spend. In the past, a media company’s success was capped by its owned and operated inventory. Now, non-O&O revenue could dwarf traditional O&O revenue, provided local business relationships are well-managed.
The future of technology in Local Media 3.0
While discussing business strategy in a technology column might seem out of place, it’s essential to understand that the technology stack will undergo significant changes in Local Media 3.0.
Media companies must prepare for these changes by crafting a new technology stack and staffing appropriately. Technology tools such as omnichannel order management systems or OMS, self-service ad platforms, customer relationship management or CRM, customer data platforms or CDP, analytics and business intelligence platforms, automation tools, and generative AI will all play crucial roles. In addition, all workflows must be revisited and architected for the future.
Omnichannel publishing and selling will become the norm, and media companies must strive to reduce friction in all processes. To thrive in this new era, media companies must transition into data companies, overinvesting in data technology and staffing.
Is Local Media 3.0 the playbook that will restore the level of success seen in the days of Local Media 1.0? Only time will tell. However, one thing is clear: this tectonic shift in strategy carries both immense potential and significant risk. But as the industry continues to evolve, maintaining the status quo may be the riskiest move.
Guy Tasaka is a seasoned media professional with a 35-year track record of leading change in the industry. He has collaborated with renowned organizations such as Macworld Magazine, Ziff-Davis and The New York Times, where he honed his expertise in research, strategy, marketing and product management. As the former chief digital officer at Calkins Media, Guy was acknowledged as the Local Media Association's Innovator of the Year for his work in advancing OTT and digital video platforms for local news organizations. He is also the founder and managing partner of Tasaka Digital, specializing in helping media and technology companies navigate business transformations using his extensive experience and forward-thinking approach. Guy can be reached at email@example.com.
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