More Thoughts on the Latimes.com’s Hyperlocal Strategy

I was doing more thinking about Rob Barrett’s Latimes.com presentation I heard at the Kelsey conference last week. The decision to re-center their online strategy around hyperlocal is one of the sanest, most courageous and possibly most difficult strategic decisions I’ve heard come out of a traditional media group in a long long time.

Why? I was re-reading this blog post conclusion I wrote 15 months ago, “In a few years, you might find only authoritative international newspaper brands (New York Times, Le Monde, The Guardian, La Stampa, The Globe & Mail, etc.) and strong hyperlocal newspapers. All the ones in the middle will either have evolved or died.”

I suspect that building one of those big international newspaper brands is perceived as the holy grail of the newspaper industry and you can easily imagine that, for many years, the Los Angeles Times management team believed they would be one of those. Moving their online strategy to hyperlocal wasn’t a very sexy and exciting decision but it’s exactly what is needed to make the LA Times brand succeed online.

Highlights from Kelsey’s Drilling Down 2008: The Kelsey Team Intro and the Latimes.com Strategy

Very interesting first half-day yesterday at the Kelsey Group’s Drilling Down on Local ’08. The theme of the conference is “Marketplaces”. It regroups products such as classifieds, auctions and vertical sites. Here are highlights from the first two sessions:

As an introduction, the Kelsey Group’s team provided us with some background information on “Marketplaces”. Neal Polachek first described the local end game as “better search, discovery, and engagement”. He even quoted the Cluetrain Manifesto’s “Markets are conversation”. He also talked about their latest global ad revenue forecast for 2007-2012, stating that the biggest category winner would be Internet and the biggest loser would be newspapers. As I wrote last week, the Kelsey group believes that Verticals will capture a large chunk of online advertising by 2012. Matt Booth then talked about three specific verticals (travel, automotive, home services) that have had a tremendous impact on offline/online business and media spending. For example, Matt showed two juxtaposed graphs showing the decline of newspapers’ automotive revenues vs. Autotrader.com’s revenue increase. Peter Krasilovsky finished the intro by stating that it’s now time to “uncouple” print and online media bundles. As print revenues decline, you need to have online-only ad products to compensate. Peter added that you also want to “verticalize” your offer to expand your revenues.

Kelsey Drilling Down 08 Neal Polachek

The second session “Remaking the Los Angeles Times (Online)” starred Rob Barrett, Senior VP of Interactive Media, GM, LATimes.com. He started by mentioning that most of what he’s currently working on is not very visible online now. He spent the first couple of years at the LA Times refocusing the online business. His main focus has been to build the display ad business (as opposed to classifieds). It’s going to generate $25M in revenues this year. Barrett says it’s now “time to finally break the newspaper paradigm online”. The LA Times’ online strategy needs to be local as opposed to national as it will allow them to differentiate their offer versus other “national” newspapers like the New York Times. They’ve realized that local users are key to online revenues as they generate more monthly page views and twice the display revenue per page views. Their product approach is “we want to own Los Angeles”, i.e. be integral to life of Angelinos, be the source of news and information about Los Angeles to the world and be an information retailer by creating, aggregating and curating LA content.

Los Angeles Times - News from Los Angeles, California and the World

The Latimes.com web site is slowly transforming itself into a hyperlocal social network. All content pieces are going to be tagged and indexed by category and geography. By targeting on demographics and on geo, the LA Times is hoping to raise their average CPMs and improve ad effectiveness. They are creating the best targeting machine for the LA DNA. Barrett then showed us pilots of various new vertical sections that are very promising: