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Centro - News: Classified Intelligence: Last chance to level the playing field? Centro tries to help build local revenue - Centro in the News
 
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Classified Intelligence: Last chance to level the playing field? Centro tries to help build local revenue

February 7, 2006
By MARY HUNT

Local publishers are still the most trusted sources of news and information, but if they can’t find ways to attract ad dollars soon, will it matter? Shaun Riegsecker, president of Centro and founder of Intégrent, is doing what he can, even if it means banging his head against the wall of what he sees as local publishers’ inadequate preparation for an online future.

Riegsecker started Chicago-based Integrent in 2001 as a rep firm for online newspapers, but soon realized that the industry “needed a holistic media buying service a lot more than it needed yet another rep firm. We’ve seen the value that buying services have created in the YP world, the print world, in search engine marketing; the online industry has needed one, and we’re the first to come out.”

The year 2005 was spent developing the database, technology, and systems to accommodate it, and Centro was launched just after Thanksgiving 2005, with Integrent (which itself now has “zero-brand equity in the marketplace,” according to Riegsecker) existing as its holding company. The core aspect of Centro is geo-targeting.

“The portals have made it much easier to geo-target through them,” Riegsecker told CI. “We know that it’s a much better experience for national advertisers to geo-target on locally based publishers, but in the last 10 years clients have not utilized these sites because it’s way too difficult to plan and purchase advertising on that level. A national advertiser can call up any of the portals and do a compelling, rich media creative on their home page and reach millions of people every day. That’s why the money is going to the portals. Until this community can offer similar opportunities, they will continue to suffer from a revenue standpoint. It’s just common sense.”

Probably the closest thing to a national network up until now has been Knight Ridder’s RealCities, which recently topped 100 members. But it still has some major markets missing entirely (five of the top 25), and can only offer second-tier publications in quite a few markets.

What Centro has done, on a national level not attempted before, is create a database and indexing site of more 1,300 local publishers – with their brands, ad sizes, ad specs, owners and contact names – and built media-management tools on top of it. The local sites in its database so far cover the top 425 markets in the U.S., and include online newspapers, TV and radio sites, alternative weeklies, business publications and some IYPs. While Centro management has reached out to introduce itself to what it considers to be premium sites, most of the database has been put together by what Riegsecker characterizes as “heavy lifting” – a lot of research, supplemented by local knowledge. Among the publishers with which it has “established relationships” are Advance, Belo, CBS-TV, Cox, Hearst, McClatchy and Media General.

Most ad agencies, Riegsecker said, are not staffed enough to handle a major campaign through, for example, 300 different local publishers nationally – and with the portals making it easy for them to reach a national market with one call, they lack the incentive to do so. Centro was created to make buying hundreds of local publishers “easy, fast and cost-efficient” and it takes care of everything from putting the media plan together and making the buys, to tracking, reporting and billing.

“When someone (an agency) calls us, we can do a plan in two days that would take them maybe a month to do,” said Riegsecker. As an example, he cites an airline whose agency calls on a Wednesday with a fare sale that needs to launch on the Friday in 15 markets and wants to go two publishers deep in each market; the agency sets the budget, and Centro does the rest. “We shave off 80 percent of the media planning, regard to specs, contacts, inventory, all those things; the only thing the site has to do is approve the plan. There’s still a lot of e-mail approval activity, but we are quickly eliminating that through some technology we’re putting together to make it a lot more automated for everyone.”

“I always tell people, it’s a simple concept to grasp but it’s extremely difficult in execution,” said Riegsecker. “There are thousands of moving parts to keep track of. If we do a 120-site plan with three placements per site, we’re talking 360 line items. And most of the time they are placing three different ad sizes on three different sections, so there are nine different ad tags per site. And we track delivery – if you buy a million impressions in the sports section you may buy only 100,000 in the business section, we track sports vs. business so we have the ability to optimize the campaign.”

Centro’s reception has been warm, to put it mildly, at least according to Riegsecker. “The welcomeness that this industry has given us has been nothing short of a full embrace, saying ‘Where have you been?’ It seems like there’s 10 years of pent-up demand for a full-service local media buying company.” Among the major clients who have already used Centro’s services are Allstate, American Airlines, Dell, E-Trade, MasterCard, Mercedes-Benz, Northwest Airlines, SBC and United Airlines.

Not that you’d expect them to do otherwise, but the Centro folks are strong advocates for local publishers. The company’s Web site, www.Centro.net, emphasizes that local Web sites are the most-visited destination sites in their market and that local publishers are the most trusted and respected sources of news and information, producing the best in-depth, vertically targeted audiences on the Web.

While the Centro plan may be a win for everybody, Riegsecker is all too aware that it’s a drop in the bucket compared with what’s needed to keep local publishers, especially newspapers, viable. When we asked if Centro was open to contacts from publishers who want to be added to the database, he said, “One of the most important things for local to keep in mind is that there’s not enough revenue flowing into this segment of the industry to support publishers on a small scale – there’s not even enough to support big publishers. Local right now only gets 3 or 4 percent of all online spending. Until this industry, through us and their own efforts, can move that to 10 percent, it’s going to suffer financially.”

Riegsecker, whose own background is in newspapers (he started in ad sales at the Akron Beacon-Journal and became the Internet advertising director for its online edition, Ohio.com, later moving to the Web site of The Cleveland Plain Dealer), spends a lot of time thinking about how to keep local publishers afloat. Not surprisingly, one way is the Centro model: “In any industry that is highly fragmented, with disparate entities difficult to purchase, a middleman or buying service must exist in order for that industry to do well. Newspapers can remain independent and we can supply the revenue.” But the onus falls on local sites to give themselves a fighting chance, and Riegsecker wishes he saw them fighting harder.

There are two levels on which the hard work needs to be done, he posits. On what he calls the “high level” is the need to recognize that local news is the competitive advantage of local sites – “They have to not only maintain but increase what’s important to the local community.” – and a hard look at their branding: “Their only other asset, other than the ability to create local news, is their brand, they must make their brand relevant for today and in the future, because those brands are losing relevance.”

The other level where work is needed is, as Riegsecker calls it, “where the rubber meets the road.” He’s identified five nitty-gritty areas where local publishers simply cannot afford not to be competitive:

  • They must accept IAB-approved ad units
  • They must accept standard forms of all rich media (point rolls, eyeblasters, streaming video etc.)
  • They must accommodate a text-link program where call-to-action text links support graphics.
  • They must continually adopt video.
  • They must offer advertisers at least one of the three major homepage advertising opportunities (introductory message, rollup, pointroll foldover).

“We’re trying to standardize compelling creative across the entire industry,” Riegsecker said. “People have to understand this in terms of their competition. You can buy out the home page on MSN but there’s no way to buy out the home page on local properties. Imagine how incredibly compelling it would be if you woke up in the morning and every local outlet had the same campaign on its home page; then the local industry would be competitive with the portals and the national competition.

“As the saying goes, expect the best but prepare for the worst,” he added. “Newspapers are all sitting around expecting the best, expecting that circ and readership won’t decline, expecting that they won’t reach the tipping point where advertisers pull out of print, expecting their costs not to significantly increase, but this industry is so inadequately prepared for the worst.”



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