By SUSAN LAHEY
Reporter with Silicon Hills News
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What drove Andrew McFadden, Director of Innovation and Business Development at Press Enterprise crazy, was that the Riverside County newspaper company he worked for only saw the downside in readers’ shift to the Internet. The publishers couldn’t see the tremendous opportunity that the shift afforded.
“I’ve been in startups,” he told them. “The hardest thing is to get the door open. You guys already have that. You can open any door you want. There’s money lying around the floor here.”
The newspaper company was already an 800-pound gorilla as far as Google’s search metrics were concerned. It churned out content and directed SEO traffic. But it wasn’t leveraging that position to sell ads. McFadden hooked up with one company, Local.com, that connected the newspapers’ advertisers to websites and social content. But the Press Enterprise was too small to get top tier service from that company. So, McFadden switched to Austin-based OwnLocal. That company, started in 2009, has four products that help leverage the newspaper’s presence to become more valuable to advertisers. AdForge software converts print ads to SEO and SEM optimized online ads. Local Hero is a business search optimization platform that includes maps, directions, coupons and more in a local directory. Web Builder helps small businesses create mini sites linked to the paper since up to 30 percent of the print advertisers they serve have no website. And Daily Deals is just that, complete with distribution and professional writing.
“Every day newspaper reps get calls for print ads, which are worth of a tenth of the price of an online listing,” said OwnLocal founder Lloyd Armbrust. “But online ads are hard to sell because people don’t understand the value.” Part of that value being that online ad ROI is trackable. Print ads’ ROI is much less so.
In smaller markets, advertisers don’t always recognize the value of online ads. They’re not trying to reach a nationwide marketplace, just penetrate a local one. Armbrust talked to a music store owner in Somerset, Pennsylvania who owned the only music store in town. Why would he need an ad? Because, Armbrust explained, when someone new came into town and Googled “music store Somerset, Pennsylvania” another store popped up as the top store. And that store had been gone 10 years. With an online ad, optimized both for SEO and SEM and linked to a heavyweight like the local paper, rankings are bound to rise.
But from McFadden’s standpoint, OwnLocal’s biggest advantage isn’t its software, it’s the company’s customer service. Newspapers buy this process from OwnLocal. They don’t control it or the software. So if something changes, or goes wrong, they need to know they won’t get left behind.
“I’m an (OwnLocal) advocate,” McFadden said. “Every software will have problems. It’s technology, that’s the nature of the business. Everything changes, the search engines change…. The difference I felt with going with OwnLocal is that when have I have a problem and mark an email urgent, I get a response right away. That has nothing to do with technology. That’s how you run your business.”
Armbrust had been in the newspaper industry several years before founding OwnLocal and had seen that print ad revenue was shrinking, and digital revenue was not rising to meet it.
He started his newspaper career as circulation call-center manager for the Duluth News-Tribune and moved to online sales in 2001. He became the expert at building newspaper websites, creating several from the ground up. In 2007, he was working for Morris Communications when the company sold more than a dozen of its small-town newspapers and a commercial printing operation to GateHouse Media. GateHouse was a huge organization with more than 400 publications at the time and it was difficult to get the company to pay attention to Armbrust’s efforts to bring small, community papers into the digital world. So he decided to go out on his own, starting with software that would digitalize print ads.
One of his brilliant strokes was that the paper’s ad reps don’t have to know anything about digital advertising. When they send out information about advertising, there’s a box that says “call your rep to upgrade” or “click here to upgrade.”
“It’s sort of a CRM for ad reps,” Armbrust said, “it adds to digital revenue but you don’t have to hire digital reps. That would be a problem because your print reps would be pissed ‘I’ve had that account for 20 years.’ It aligns everybody’s incentives.”
Armbrust launched OwnLocal in 2009 and in 2010 received funding from Y Combinator, Baseline Ventures, Lerer Media Ventures,the Knight Foundation, Automattic, Paul Buchheit and several other Angels.
Now, OwnLocal is used by more than 400 publications and continues to grow with 12 full time employees in Austin and nearly 40 contractors. The company hopes to get into countries like Japan and India. While the technology is easy to scale and software does a lot of the work, humans have to look over what’s been done because, as Armbrust said, “Computers do weird things.”