Thursday, October 15, 2009

Google Needs A Local Sales Partner

One of the initially compelling synergies of the AOL-Time Warner merger was to use Time Warner Cable’s 1500-person local ad sales organization to sell geo-targeted AOL ad placements to their local clients.

The idea made a lot of sense. Local cable advertising was becoming a force to be reckoned with, quickly building share at the expense of newspapers, radio and broadcast TV. The typical cable system at the time was inserting advertising on 50 or more national cable networks creating an environment where sales executives were comfortable packaging and selling a broad collection of properties. Local advertisers wanted to better understand emerging online marketing opportunities and AOL was the biggest player.

Unfortunately, as it is well known now, AOL had very little ad sales infrastructure at the time. Cracks started appearing on the national side and there was very little attention left for local. The project was disbanded just a year or so after being introduced in 20 markets.

Time Warner Cable quickly built their own digital offering, an automotive dealer listings service called that today is an important revenue driver for the company and a key source of differentiation from the other local traditional media outlets.

Comcast, with a sales organization twice the size of TW Cable’s, has had similar success with their own automotive offering,

At both companies, the local ad sales executives, most steeped in the world of 30- second commercials and other traditional media formats, were quick to embrace a new media platform that enhanced their business opportunities and professional development.

More importantly, both initiatives showed how large local traditional media ad sales organizations could leverage their relationships and coverage to introduce new digital media offerings.

The largest radio, newspaper, yellow pages and local broadcast companies all have massive local sales organizations supporting core products that are in decline. Look for them to start aggressively adding new digital offering to their portfolio just like Clear Channel’s recently announced ad sales partnership with Pandora.

Earlier this week it was reported that Google has its sights set on the local market with a new fee-based search model that dramatically simplifies search advertising for local businesses. (Most local advertisers have been reluctant to engage in Google's traditional bidding and optimization process.)

Gordon Borrell, an infuential local media researcher, was quick to note that infiltrating the local market will not be easy for Google. As he said in Paid Content, “Local media is sold, not bought.”

Will Google go it alone or partner with a big traditional media company?