Centro, the local and regional media service company, has branched off into Web-based support for ad management. The company today announced the launch of Transis, a new division dedicated to automating the “other 80 percent” of the display industry not served by cut rate ad exchanges and demand side platforms. Specifically, Transis has been developed to make it easier for agencies and media buyers to buy premium display advertising by helping everything in one place. This includes all their research, site selection, negotiation, planning and buying, campaign management and billing reconciliation.

In development since 2005, and built at a cost of $11 million, Transis represents a significant “phase two” for Centro, which now has 11 offices and 115 employees. “First, we were helping advertisers place locally,” notes CEO Shawn Riegsecker. “The second part is build media software that would help scale the business for agencies across the U.S.”

But Riegsecker thinks the risk will pay off big time. He notes that many agencies are currently charging a premium for online ads because, ironically, of all the extra labor involved. “The fact is digital is more complex and the digital budget is much smaller. It doesn’t scale very well when contracts are held in different Outlook folders. It takes a long time to process 15 Web sites. Imagine buying 100 Web sites. It just doesn’t happen,” he says. The addition of mobile,video, social and search complicates things even more.

Riegsecker claims that Transis, which provides full-service information for 50 categories, makes buying “26 [percent] to 46 percent more efficient.” He also says it will eliminate the “double and triple entries” that plague ad buyers today. Transis, very simply, opens the way for agencies “to place more creative buys than any opportunity in the past,” he says. “It moves us into a software supported services model.”

Centro, of course, isn’t the only company moving ads into an automated environment. Google last week unveiled DoubleClick for Publishers, which provides many of the same automated features for publishers on the selling side. It will likely complement Transis’ buy-side solution.

Google VP of ad products Susan Wojcicki told IAB’s Leadership Meeting yesterday that “the display industry is one of the most innovative parts of the Web right now,” and “will be one of the largest ad markets, if not the largest. It has to be,” she added. “Everything is moving online.”

Video, social and mobile will each play a major role for the growth of display ads in Wojcicki’s vision. “Every campaign will have desktop, mobile, video and social elements,” says Wojcicki, a core member of the Google leadership team since the company’s inception, and a leader behind the integration with DoubleClick, which was acquired two years ago for $3.1 billion. She also noted that all display should be integrated with other ad types across the board to boost yield management.

“Video….will be one of the largest industries for us,” adds Wojcicki. “It could be one of largest segments for display. And social too. Over time, everything is social. We haven’t even figured out how social will play in different ad segments across [the] Web.”

Indeed, Wojcicki notes that “ad models aren’t clear in the new online world.” But she expects volume for display to grow astronomically, in part, as Google moves buying to its auction process. Using auctions have boosted display sales by 130 percent, she claims. Ad syndication will also be vital for publishers, as we have seen with projects such as Citysearch’s CityGrid. “Rather than having everyone come to your site, it will be your content and your ads everywhere.”

Google is also working to create a seamless purchase process. “The buying process for display and online inventory is really difficult,” she notes. “Inventory should be frictionless when you are buying it. Everything should be online. All creative should be checked automatically. With these principals in place, “there should be hundreds of thousands of display advertisers,” she says.

Along those lines, DoubleClick has rewritten its buying program for publishers using Google technology. “It is one of the largest integrations between Google and DoubleClick,” adds Wojcicki. “It is faster and fixes a lot of issues.” The program has also been well tested, with more than 500 hours of User Interface time to “get it right,” she says.

The Interactive Advertising Bureau, celebrating its 15^th anniversary, is holding its annual leadership meeting at La Costa in Carlsbad, California. The sold-out meeting, dubbed “Ecosystem 2.0,” has attracted 650 attendees, up 30 percent from last year: a further omen of recovery in the economy. Over the years, we have actively helped IAB develop its leadership tracks in local, so it is good to see the organization on very sound footing.

24/7 Real Media Chairman David Moore, in an opening keynote, noted that 12 percent of ad dollars are now online, but online share remains disproportionately low, considering that 25 percent of viewing time is spent online. The audience’s increasing fragmentation forces publishers to look for new revenue paths, he added.

The clearest path to recovery is to focus on building more premium content, even though it inevitably means that subscriber charges need to be added. “Totally free content is dead,” said Moore. But that isn’t the end of the world. In 1982, cable TV was beginning to add unique networks, subscriptions were $6 per month. Now they may be $100 a month.

If an “EZY pay” system were instituted for content at 10 cents per access, that would be like charging a CPM of $100,” Moore suggested. That would be far more lucrative than what most publishers are getting.

Moore also predicted that digital would be the No. 1 ad medium within the next five years, with online video advertising leading the way. But first, the industry has got to adopt real standards and simplify the workflow for agencies and concentrate on finding new ways to make commercials more interesting to the consumer.

“You can’t be afraid to be disruptive,” added Moore. “You need to be more aggressive. You have to interrupt the consumer experience with ads. But do it in a way that is interesting and targeted.”

IAB President Randall Rothenberg, in his opening comments, said the key to advertiser success was to focus on the year-after-year development of brand building, which is a synonymous effort with charging premium prices, i.e., BMW and Johnson & Johnson. “It is about being a part of, not apart from,” said Rothenberg.

Zvents, the events lister, is reporting 35 percent year over year growth with over eight million unique visitors, largely due to its powering events for 285 local media brands, including  major newspapers and the NBC owned-and-operated TV stations.

CEO Ethan Stock cites Quantcast data showing Zvents Media Network as the 250^th most used net on the Web, ahead of Citysearch (#267) and Local.com (#291). “We’re a very large local property by any measure,” he says.

The company, which has raised $32 million over its five year history, also claims it has been averaging 12,000 monthly event listers. These use the site to promote a wide range of local events and activities, including live music, performing arts, sporting events and community activities.

Of those listers, roughly 1200, or 10 percent, are now boosting their presence by taking out ads via self–serve – a percentage that Stock thinks will climb to 20 percent in 2010. The company also sells regional and national accounts via telemarketing and national sales, with top categories including major concert promoters, sports teams, casinos and  home and garden events.

High end shopping, with its sales-oriented events, such as Williams Sonoma cooking demonstrations, are also becoming more important to Zvents bottom line.  “There is a significant segment of consumers who perceive shopping as entertainment,” says Stock.

The key to the company’s future in local, however, is to stay away from the trap of focusing on directory-type advertising. Instead, Zvents will stay focused on events and shopping, he says, which have the most highly motivated advertisers. “They are also relatively concentrated in terms of the volume of advertising.”

Indeed, the company’s focus on events and advertising puts it most in competition with social sites such as Facebook and Google, rather than local sites such as Citysearch and Yelp, who may be more directory oriented, says Stock. Other events oriented companies include Eventful, and “new city guide” players such as Center’d and American Towns.

In hindsight, the company’s initial focus on teaming with newspapers “look like a very smart choice,” adds Stock. While newspapers are commonly disparaged in today’s climate for their declining circulation and advertising, “they have high repeat traffic. Much more than national partners.” Top Zvents newspaper partners include SFGate, the Denver Post, Seattle PI, Boston.com, the Dallas Morning News, the Atlanta Journal Constitution, New York Daily News, and the Orange County Register.

Stock also sees a major boost coming from renewed efforts in local from national partners such as AT&T’s Yellowpages.com, which has been an investor in the company ; and from MSN, where Zvents listings will be showing up in Bing, and trigger Instant Answers via Silverlight search.

Citysearch officially rolled out its CityGrid publisher network this week. The network moves Citysearch away from an exclusive focus on its individual sites (“Citysearch.com,” “Insiderpages.com,” “Urbanspoon”). Instead, it works on a distributed basis with partners (i.e., “SuperPages”) to marry local content and advertising.

In the short term, CityGrid represents the new face of Citysearch and the next evolution in the local market. It allows the company to leverage its existing infrastructure and content, and reach down into the distribution channel with a more automated and cost-effective option versus a focused business development effort. For its publisher network, and its 500,000 local advertisers — projected to jump to 750,000 by year-end — it also represents a real alternative to Google.

Overall, our enthusiasm for the product is as high as it was when we were first walked through it some 14 months ago. Here’s why we like it. The local market fundamentally suffers from two broad problems. First, it’s hard to make money without a substantial investment in sales. Even then, success is not assured. Second, content is expensive to create. Yes, user reviews can be acquired, but there are still large swaths of categories that still lack deep engaging content.

In theory, CityGrid addresses both problems. It gives small and large developers local content and local monetization together in package. The power of this cannot really be underestimated since both of these are hard to come by, not to mention expensive. Urbanspoon used this to great success and eventually was acquired by IAC (Citysearch’s parent). Nearly every review and ad on Urbanspoon was from Citysearch.

We have seen some reports that this product is a reaction to other companies in the field entering the space. It’s not. If anything, it simply takes the winning strategy of opening up an API to developers and letting them build products on robust infrastructure. Think Google Maps, for example.

To our knowledge, there is no one else doing this model with the same scale and focus. Indeed, 100 developers signed up to work with the API within the first two days of its release. We expect, however, that more people will enter this market quickly. But not before Citysearch gets a major head start, if Citysearch CEO Jay Herratti gets his way.

“My vision is [that it will become] the leading content and ad network for local,” he told us, adding that it is no longer just about Citysearch.com as a destination site. “This is Citysearch,” he says. “It isn’t distributed in one place. It is part of many places, all around the Web.”

The result also provides an alternative to Google. “We look at what Google is doing with local as a major competitive threat,” says Herratti. “It controls access to the Internet.

“Last year, we were building and rebuilding,” Herratti notes. “This year, we are very, very focused on execution.” Still, the current product is relatively primitive and will be rapidly evolving. “Right now, we are talking about version 1.0” he says. “Twelve months from now, there will be new geotargeting solutions, new ways of creating content. We’re taking all of these pieces and putting them together. The next thing is to optimize, and optimize.”

Having been in the trenches for the past year talking about multiproduct selling and how a consultative or collaborative sales process is a key component for selling multiple media, I keep hearing over and over again “I’ve been training on consultative selling for years so why should we rely on it to take us into the next era of selling?” Having been involved in local media sales for more than 10 years, I’m going to take the unpopular stand and say that the current local media sales process is transactional product selling in consultative selling clothes. In short, many sales organizations have embraced aspects of consultative selling but in large it is being used as a sales tacticto get in the door and keep the advertiser talking in order to sell specific media options.

BNET recently featured Harvard Business School professor Ranjay Gulati, who wrote a new book titled “Reorganize for Resilience: Putting Customers at the Center of Your Business.” In his book, Gulati points out:

“In a marketplace like today, customers have more choices and more information, and services start to look like each other, in what we call a sea of sameness. If you don’t have an ability to transcend beyond the features and functionality of my product versus yours, then you have a problem.”

Gulati points out the fallacy of the notion that media companies are currently consultative and customer focused. Many media sales teams feel if they are asking a few questions about the business and their expected ROI from their marketing efforts that somehow this constitutes consultative selling. Put simply, salespeople are saying “I’ll talk about your needs so long as it leads to you only buying my portfolio of solutions.” Gulati’s point of view is “Most organizations believe they are customer centric when they are asking questions, but they’re communicating with customers through a product lens (with a pre-determined end in mind).” Instead, Gulati says “companies must ask deeper questions such as what problems they are dealing with and what issues are happening in the life of my customers regardless of the solutions the sales person is offering.” The goal in asking probing questions is to help the advertiser better articulate his or her needs so sales can get them met.

Consultative or collaborative selling is about transparency and building solutions that fit the customer’s needs and not necessarily the media company’s balance sheet. If a salesperson is aiming to sell a specific product set, and is willing to un-sell other potential solutions, then this version of consultative selling is merely disguised as the same transactional selling of old — all paths lead to a limited solution. Media consultants recognize there are many media options available to advertisers and that at times their portfolio of media offerings has to co-exist or complement other media and at other times they must fight to win budget from media that may not be as effective or is receiving too large of a share of an advertiser’s budget. Being able to counsel local advertisers on media strengths and weaknesses means salespeople must learn about all types of local media to be effective in selling their own portfolio of media options.

Local advertisers are much smarter about where they spend their marketing dollars because they have access to more information than ever before and have tighter ties to peers through social networks who can offer additional guidance. Salespeople used to be the source of information about what was happening in the local marketplace but now they are one of many sources available. If a salesperson cannot deliver value beyond what an advertiser can access on his or her own, then he or she has very little to offer. True media consultancy is the path where more peer-to-peer relationships are developed. Based on BIA/Kelsey’s Local Commerce Monitor study, 48 percent of SMBs want their media rep to help them understand their media options and make the best choice for their budget among the confusing array of new media choices.

While many media sales organizations are looking at incremental changes to their sales processes, those that are savvy and understand that local advertisers have changed and that the sales role must change are the ones that will thrive. The reality is the market has already changed and it is up to each media company to understand how to recraft its sales strategy and put together a consultative media sales team that understands local media and can be the media guide local advertisers are seeking. It’s time to stop making consultative selling a sales tactic for getting the advertiser to talk and use it as a means for building a relationship, creating value and developing media plans that work for the benefit of the advertiser and leverage their existing marketing activities. If consultative selling fantasy can be turned into reality, media outlets stand to make significant revenue gains and gain a larger, more loyal base of advertisers.

Aaron Finn of AdReady and Michael Barr of iPromote discussed the opportunity to serve advertisers interested in display advertising particularly in the self-serve environment. Finn noted that there are roughly 1.4 million businesses participating in search whereas there are only 44,000 businesses participating in display. He believes that there is scale for display and that it’s the next big opportunity for self-service advertisers. Both Finn and Barr noted the importance of easy-to-use automated advertising controls, access to creative tools, and the ability to produce the ad in many display units/sizes and file types.

Fellow panelists Victor Wong of PaperG and Warren Kay of Fox Audience Network echoed some similar sentiments, indicating that self service is here, but it needs to be nurtured. Kay, however, who has been in the local sales environment for years, most recently at Yahoo, simply stated “local sales is difficult.” He said that anyone who thinks he or she can provide a self-service solution and think advertisers are going to flock to it is misguided. While Kay believes that self service is a way to attract customers, he notes that its not the end all be all and that essentially feet-on-the-street options are still critical to local sales.

\

Yahoo has announced the addition of The Boston Globe and St. Petersburg Times to its Newspaper Consortium, which now has 37 media companies with 796 newspapers. The announcement was timed for The Newspaper Association of America’s  MediaXChange meeting this week in Las Vegas, where Yahoo holds a bi-annual summit.

The consortium was initially envisioned as a “one size fits all” platform when it launched in November 2006. But newspapers had conflicting issues in terms of existing contracts, commitment etc. Consequently, many newspapers are participating on a pick n’ choose basis.

Currently, 120 newspapers participate with the Apt ad management behavioral targeting program (100 of which are “live”). There are also 300 newspapers participating in the “referral” program, in which Yahoo sends users to newspaper sites for specific content; and 600 newspapers participating with Yahoo’s HotJobs recruitment site.

If any company had the local and regional footprints to build a local editorial network, it would probably be Gannett, with its 85 newspapers. If Gannett were to go that route, I always thought the conduit would be USA Today.

USA Today, however, has traditionally steered clear of integration with the local papers. It has waded in a little, with classifieds and regional news clips, etc. But clearly, it wasn’t going to be Gannett’s connector service.

Now Gannett has gotten much bolder with the development of ContentOne. The new service, which debuts next week with coverage of the presidential inauguration, uses USA Today as a foundation for vertical and horizontal content, but not as the body of the service itself. All the ContentOne material will be branded with the logos (and ads) of the local papers.

ContentOne incorporates content from Gannett’s local vertical properties such as MomsLikeMe and the Metromix entertainment guide. It also adds Mogulus, the live video feed provider in which Gannett invested $10 million last summer.

The service also has the ability to add special features on a customized basis. For the inauguration, it will feature student essays, and news-related advertising and items for sales, such as Inauguration Day coffee mugs with various Gannett front pages on them.

By serving both national and local users, Gannett thinks it has a national/local network that may reach 50 million unique users, which would be quite a threshold. As Jim Hopkins at Gannett Blog points out, it would be double Gannett’s current take of 25.4 million.  Hopkins provides a lot of additional information in his piece.

Gannett itself is in an interesting situation as the only major newspaper company with lots of cash right now. To date, it has used its money to shore up its PointRoll agency, buy out its partners in ShopLocal and buy a larger piece of CareerBuilder. And as noted above, it has also developed Tribune’s Metromix for its own markets, and launched a number of vertical sites, such as MomsLikeMe, plus and a high school sports site. It’s also a partner with Tribune Co., Hearst and The New York Times Co. in the QuadrantOne national ad network.

The company’s efforts, under digital chief Chris Saridakis, have boosted online revenues 6 percent in the past year, while other newspaper companies are seeing flat results. But for all that, Gannett still only gets 4.5 percent of its revenues from online (if I read the online statements correctly). That’s considerably less than many other companies, which are typically getting 7 percent to 8 percent from online.

We’re out with our predictions for 2009. But what’s the final word for 2008? Truly, it was a very stimulating and thoughtful year for our local media and commerce industry. But speaking for myself, it’s hard to say whether it was a good year, especially with fresh layoffs that we are hearing about every day. In fact, the year was kind of Dickensian (“best of times, worst of times”).

On one hand, there has been an explosion in local content with YouTube, Twitter and StumbleUpon, and omnipresent local reviews with services such as Yelp and Angie’s List. Online video has become a real medium, aided by $100 video cameras and the emergence of HD standards, and mobile is starting to be a real channel, aided by GPS and iPhones.

On the small-business front, search has gained wider acceptance in key local segments and has become mainstreamed in many ways, adding a useful channel to the ad mix. And the percentage of SMBs with Web sites or personal profile pages has crept up to 61 percent.

But what about the business? For traditional media, it was especially bad. In 2008 we had a perfect storm. Massive debt and declining circulation hit the newspapers hard — and the Yellow Pages in the same way. Sharp hits to retail, auto and real estate advertising sealed the deal. The decline in auto has not only hit traditional media. Online ad networks that aggregate local media, such as Centro, relied on auto for 30 percent of their revenues.

The result: Tribune stands bankrupt, while McClatchy and Lee and others are near bankruptcy. It even appears possible that Idearc and R.H. Donnelley — the two public YP companies in the U.S. — could file for bankruptcy (although we are not betting on that).

At the same time, old-line products such as Valpak coupons have been put up for sale, and we don’t see clear replacements for them yet. Vertical products remain compelling, but with the economic slump haven’t proved to be the hedge for which traditional media have hoped (at this point).

Moreover, third-party auto sites such as Autobytel have been put on the sales block. And vertical stars such as Zillow have begun to lay off workers, even as they form broad sales arrangements.

Local-oriented start-ups also got hit. Credit has tightened up. The only companies that are likely to get funding are those that can get to cash flow positive with as little money as possible. Social-oriented services seem especially poised to get hurt.

So, we have to change the conventional wisdom. The old CW: “If we just tweak things, and gradually switch advertisers over, everything should work itself out.” In fact, with the emergence of new, highly targeted ad products, we could see advertisers spending much more on marketing than in the past.

The new CW? It isn’t so simple.

We’ve learned that hyperlocal doesn’t live in a vacuum, and that there isn’t ready demand for block-by-block coverage. But it is a useful add-on. Content platforms have become a commodity but can be improved with navigation, tagging and geotargeting.

We’ve also learned that mapping is a feature that can be greatly enhanced with personalization and advertising, and could be the basis for a new portal (but there are lots of new fronts for portals). And that mobile content shows real promise, but is still kept “closed” by the carriers, which manage 90 percent of it behind their firewalls (although Google’s Android might begin to open things up).

Classifieds have taken a huge hit by free providers such as Craigslist, which continues to gather steam. But it is encouraging to see classifieds get extended by aggregators such as Google Base, Vast and Oodle, which actually started working with MySpace, Facebook and Wal-Mart (a new local player?) — a truly interesting development.

On the “national-local” front, geotargeting has become so widespread that it actually has put a crimp into CPM rates for local publishers, which have come down from $10 to $6 or $7 in many cases. But we’re seeing organic adoption by regional advertisers such as supermarkets, banks, furniture store chains and lotteries. As Centro CEO Shawn Riegsecker has noted: “They’ve been spending 1 percent to 10 percent of their revenue on the Web, with no strategy.” In 2009 they’ll get one.

For “local-local,” the bottom line remains the engagement of the small business. It is greatly encouraging to see the wide adoption of free online tools by real estate agents, for instance, and ad building templates and planning by companies like AdReady, which has deals with companies such as The New York Times.

It is also encouraging to see the evolution of leads-based services, where ServiceMagic, for instance, has moved the continuum from simply providing leads to delivering jobs (i.e., installation of flat screen TVs bought at Target). Angie’s List’s “two-sided cash register” from premium subscriptions and advertising also represents a new model.

In the end, we are in an environment where we are absolutely climbing over bodies to get ahead. But the opportunities seem stronger than ever, as is the relevancy of the products to consumers. It is an important and meaningful thing for all of us to work on, isn’t it? Happy new year to all our friends, and thanks for your support. We’ll see you in 2009.