Reinventing local news advertising: It’s complicated

Industry summit revealed pain points as well as opportunity areas

Gone are the days when advertising supported the local news industry. Since digital took over as the preferred medium for just about everything, perhaps no industry has paid a bigger price than local news. Newsrooms have been gutted. News deserts have appeared in hundreds of towns and communities. Democracy has suffered. And while there are bright spots, including hundreds of local digital news startups, the number of journalists covering news and information is down by more than 70% in the U.S.

 About 40 industry leaders gathered in New York City this week to attend a summit hosted by Google and the Lenfest Institute to discuss the state of local news advertising. It was honest and inspiring but also frustrating and frightening.

While advertising no longer represents the lion’s share of revenue for most local media organizations, it is essential that we reimagine this line of business.

For me, Shawn Riegsecker, founder and CEO, Basis Technologies, provided the thought leadership that was needed in the opening session, which featured a panel of high-level media buyers. He touched on just about everything. Warning – this will surely offend some of you:

• “Every year we see continued degradation – I’ve been on panels like this for the past 20 years and it hasn’t changed. No one is incented to buy advertising on local news sites.”
• “We have an information inequality and news inequality issue – how many people have the money to pay for news? It’s 11%. That’s a problem.”
• “Newspaper revenue has plummeted as has the number of journalists. This has led to fascism, extremism, etc. Putting up paywalls has gated the content for most legitimate news sources while the far-right extremists have made [its] content free.”
• “As for ad agencies, no one gives a sh-- about buying local news. The end of cookies could change that — we should all thank Google. This is the opportunity. When the cookie goes away, who can garner the depth of audience better than local news organizations?”
• “People need high fidelity – who has the opportunity to create a value exchange with first party data? The local news industry and specifically newspapers. Get rid of the paywalls. Start working together. This is the last opportunity.”
• “Why do the exchanges let Made For Advertising (MFA) sites in? As a DSP, we can do what we can, but we can’t police all the MFAs. At our company, we charge higher CPMs because our quality is higher, but ad agencies just go for the lowest cost.”
• “MFAs should be shadow banned from the internet. Google and the others can do it. The news industry has aided and abetted Outbrain and Taboola for years and that must end.”

This session sparked a huge discussion from the audience. Removing click bait/unethical content from news sites is something everyone would like to see. Unfortunately, media companies are relying on that revenue to operate. As one person said to me on the side, if we cut it off who is getting laid off?

The concept of MFAs was new to many in the room. We learned thousands of them are out there taking significant market share away from local news operators. And as an industry, we’re supporting them by running Outbrain and Taboola ads on our sites. That goes against our best interest.

The ad agency executives talked about the challenges they face trying to buy local news sites. Suffice to say, we don’t make it easy.

The paywall issue was controversial, as one would expect. Many defended their company’s strategy – whether that was a paywall or not. Without a paywall, many local media companies would be laying off reporters or even going out of business. It’s complicated. But we weren’t gathered to discuss that thorny issue.

We had the opportunity to showcase two case studies involving Deloitte/Word In Black and General Motors/La Noticia. It was an honor to moderate this panel along with our good partner Fran Wills, CEO, Local Media Consortium.

The Deloitte program with Word In Black is unique. It includes 15 Black publishers: five creators and 10 distributors. The five creators work closely with the research team at Deloitte (about 10 Deloitte staff members are involved, a huge time commitment on their end). Using this research, the creators first focused on financial and health inequities. Soon they will turn their attention to Black businesses in their communities. All of this is housed on The Exchange website. This week a collaborative story produced by The AFRO American was published on heart disease – Black Baltimore’s No. 1 killer.

Deloitte also sponsored focus groups in five Word In Black markets to learn more about what kind of content readers want, which will also serve to inform their own strategy.

“We learned how trusted these news organizations are to the Black community,” said Jeff Pundyk, managing director, Deloitte Insights. “One of our top goals for this project was to learn how to reach diverse audiences. We haven’t done a good job of this in the past. We’re now prepared to go even deeper on our partnership with the Black press.”

“Our team learned so much from this experience,” said Frances “Toni” Draper, CEO, The AFRO American. “Our newsroom is stronger and armed with more research thanks to the team at Deloitte. And we learned things about our audience, through the focus groups, that we would not have known otherwise.”

Deloitte is a shining example of how a brand can interact with local media organizations in a deeper, more meaningful way. Word In Black is working on similar programs with AARP, Wells Fargo and Biogen. They are all different. Wells Fargo, for example, is supporting a full-time finance reporter and a finance newsletter. AARP is focused on aging and caregivers in the Black community. Biogen has brought early warning signs of memory loss disease to the attention of Black audiences through this program.

At Word In Black, we choose to work on these types of partnerships vs. putting much time into programmatic. They deliver premium rates and better results.

Brianne Boles-Marshall, diverse media strategy and investment lead at GM, did inspire us on the programmatic side with GM’s recent buy involving 25 BIPOC publishers. This effort was in collaboration with GNI’s ad lab in partnership with National Newspaper Publishers Association (NNPA), National Association of Hispanic Publishers (NAHP) and Association of Alternative Newsmedia (AAN). “We exceeded our impression goals for this campaign,” said Boles-Marshall. “And we helped publishers get their ad tech stack in order so they can participate in these types of campaigns.”

“Fully executing a programmatic buy for the first time was game changing for us,” said Alvaro Gurdian, vice president, La Noticia and president, NAHP. “It was a lot of work on the ad tech side to get to this point, but so worth it. We can now participate in future opportunities and not miss out.”

Follow-up discussions focused on the complexity of getting the ad tech stack set up for smaller publishers and an acknowledgment that it needs to be simplified.

Scale came up often. The audience in the room was a wide mix from top 10 newspapers in the country to small digital sites. No one has enough scale to do this alone.

The need to work together and collaborate was discussed over and over. Collaboration must include CEO-level involvement. Our industry track record is terrible when it comes to working together. One attendee asked me, “What’s it going to take? How much worse can it possibly get before we start working together on all these important issues?” I don’t know.

One of our action items from the recent LMA board strategic planning is to convene a gathering of local media CEOs to address trust in news, but I would also add the future of advertising to this list. There is power in collaboration. If we don’t make this a priority, it will be at our own peril. 

Did we strike a chord with any of this? If so, fire away with your comments.