Hey Incumbents: While You Were Sleeping Your Business Blew Up

h-bomb

As a frequent conference session moderator I hate when people use the phrase (er, cliché) “early days.” Most of the time they might as well be saying, we’re complacent or we’re afraid of experimentation or we’re all just gonna ride this puppy into the sunset.

Many “incumbent” local media organizations (directory publishers, newspapers) watched from the sidelines as the internet and digital marketing world developed momentum over a decade. In fairness, some took risks and experimented. However, because revenues were speculative or small by comparison, most did not and accordingly are now fighting for their lives.

Gannet is just the latest media company to jettison its print assets. Later this month Gannett will become two publicly traded companies, one with the majority of its broadcast and digital assets and the other will include the company’s publishing properties and their affiliated digital sites. I guess broadcast TV is still considered a valuable asset (but for how much longer?).

The challenges of innovating as a public or established private company with a legacy revenue stream are well documented. I don’t mean to minimize them. Changing the culture of organizations is next to impossible.

Facebook beacons

But when you see something happening in front of your eyes you need to act or be ready to say goodbye. This is what struck me about Facebook’s Place Tips and beacons rollout, announced yesterday. David Mihm and Mike Blumenthal have called this a “Trojan Horse.” I won’t say that exactly but it’s representative of a threat to traditional and even digital media businesses that don’t attempt to embrace new technologies and, in this case, connect online to offline.

It’s possible that the Facebook effort won’t go anywhere and local business owners won’t request their free beacons. But Facebook’s plan is a bold one and could result in millions of beacons in local businesses around the US and later around the globe.

Most people opining about beacons are thinking of them entirely in the context of enterprises and large retailers. Facebook is the only company to my knowledge targeting the SMB market in a systematic way. Let’s assume the effort goes well. Facebook will be able to provide data to business owners on how many people visited, for how long and when. (There are other offline/indoor analytics companies; this isn’t the only methodology.)

The point is that Facebook will have data that will be incredibly valuable for ad targeting and analysis and valuable to local business owners. Most local businesses still have considerable trouble determining digital ROI. Google is hoping to get there with Store Visits.

Imagine the conversation in which a local sales rep tries to pitch a business and says we track, clicks, impressions, visits to your site and calls. Facebook will be able to say, hypothetically, something like: “we can tell you how many people came in and when.” The power of that information is self-evident.

Publishers and sales channels of all stripes need to be experimenting now with new methodologies and technologies, such as beacons, to provide more value to business owners. Even if Facebook can’t directly connect online or mobile ad exposures and in-store sales the offline visitation data still has enormous perceived value.

Competitors that wait and then undertake “me-too” initiatives much later are almost always too late. So while some technologies can be immature or not ready for adoption often that rationale is an excuse for inaction, with disastrous consequences later on.

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3 Responses to “Hey Incumbents: While You Were Sleeping Your Business Blew Up”

  1. Scott Barnett says at

    Great points Greg. I had conversations with a few hyperlocal publishers in the past week that left me feeling the same way. They want to keep running things “status quo” but magically have different results.

    You mention “Facebook’s plan is a bold one” which is exactly the point. In order to create sustainable value, it helps to try some bold experiments. If this one fails, they will try another one. Local publishers (and SMBs) have to be willing to try things – they don’t even have to be as bold as Facebook, but try (and measure) some new initiatives. Drop the ones that don’t work, and double down on the ones that do. We have tons of thoughts/suggestions for local publishers to be leaders in this exact area – because they have the one thing Facebook (and the other large IT platforms) don’t have – LOCAL PHYSICAL PRESENCE.

  2. Street Fight Daily: Verve Mobile Buys Beacon Startup, MindBody Files for IPO | Street Fight says at

    […] Incumbents: While You Were Sleeping Your Business Blew Up (Screenwerk) Greg Sterling: Many “incumbent” local media organizations watched from the sidelines as the […]

  3. Greg Sterling says at

    The local sales force is a clear asset but not necessarily as effective as it appears “on paper.” I think on the ground there’s wide variability in terms of ability to sell digital and retention.

  4. Scott says at

    I’m not talking about a local sales force for ads. The next generation will be about engagement. And that requires a truly local presence, since every market is different and the way they cater to their audience is different. Understanding that local flavor is critical and is what’s been missing from initiatives to date.

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