Clear Channel, which has 850 stations in the U.S., was the first radio firm to “go really big” after the Telecom Act of 1996 deregulated the market. At one time, it had more than 1200 radio stations.  Clear Channel has had some measure of success but had a number of setbacks tied to various management problems (e.g., excessive expense cutting, endless reorgs, selling too much commercial time.)

After the exit of founder Mark Mays from the family business, Clear Channel has been in  pursuit of a permanent CEO that could lead a company with a lot of legacy media and propel it into its digital future.  Enter Bob Pittman, the co-founder of MTV who cut his teeth at Roberts Radio. After MTV, Pittman was CEO at Century 21, making it the first truly national real estate brokerage; CEO at Six Flags Entertainment; and President of AOL Time Warner, his highest profile position. Recently, he’s been a very active investor in both broadcasting and digital media. Some of his investments include Thrillist, Daily Candy, Group Commerce Inc. and others.

Since joining Clear Channel as an investor and chairman of its media and entertainment platforms, Pittman has focused on iHeartRadio, a Pandora rival.  Clear Channel used the incredible promotional power of its radio properties to bring to market a digital audio product that it believes will surpass Pandora.  The lead up to the event that launched the new service was all that radio has delivered for its clients for years but with a digital hook of their own at the end. 

With Pittman at the helm, Clear Channel now has a CEO that has the street credibility in the digital world that has to be taken seriously by all of Clear Channel’s competitors both locally and nationally.  That credibility should make it easier for Pittman to sell his vision to his internal team, too. 

“The problem is that advertising comes slowly to any new medium or product,” Pittman told The Los Angeles Times in May. “When I was at MTV, we projected $10 million in ad revenue for the first year. We did $500,000 and almost went out of business.”That’s how slow advertisers are to warm up to new media. But over time, it will grow.”

While this news has been out for a little while, we thought it was interesting that a company with powerful TV assets would initiate a deal with a company that provides high-quality, affordable video commercial content for local advertisers. After all, isn’t this what TV has been doing since the ’40s. What gives?

Anyone who’s ever sold or sold against TV operators knows the costs of commercial production can be a deal killer. TV sales executives try their hardest to find ways to bury the costs of production in their schedules, but that doesn’t always work. Other media reps also understand the process and sell against TV by scaring local advertisers about those production costs. It’s been going on forever. 

So, what’s new? TV stations are now involved in many more multiplatform selling opportunities than ever, and Fisher Communications is no exception. Video is a critical and highly seductive element in the minds of most advertisers and an enormously effective advertising tool whether used on air or online. Simply put, local production houses are not equipped to scale to meet the new demand for on-air and online video. The turnaround time and costs associated with doing local production are burdens for both the station and advertiser. The Fisher deal with SpotMixer allows their sales teams to put commercials together on their connected devices right in the showroom of the advertiser, if needed. 

For years, newspaper and radio reps have always been instructed about the power of the spec ad to close a deal. With this arrangement, TV and online reps working for Fisher have the same power at their disposal without costing the station thousands of dollars in time and effort, while providing a video that any business owner would be pleased to have carry his or her brand and identity.

Further, this lower cost option allows Fisher to extend the power of video to a lot of smaller local clients that might have had “video envy” over the years. Other local media companies have also been tying up with video providers over the past few years, but this is clearly local TV’s space to defend.

According to one source, Marquette, Ketchum Directory Advertising and Directory Concepts are among the rival CMRs taking over regional chunks of the TMP business.

In an April 1 letter to its clients posted on TMP’s website, agency CEO Mike Flanagan wrote that, “Unfortunately, an unforeseeable perfect storm of events has hit our company. Industrywide declines in print usage have significantly reduced our revenues. At the same time, we are contending with substantial debt obligations. Unfortunately, this combination has severely limited our ability to refinance — leaving us no responsible choice but to wind down operations.”

Flanagan’s description could apply to many global directory publishers. Of course, publishers’ ongoing ability to generate substantial amounts of cash is one clear difference. Still, this is an uncomfortable reminder that casualties are inevitable in a changing industry, and sometimes very prominent brands are among the casualties.

The fate of TMP’s digital arm, 15 Miles, remains unclear. While TMP’s traditional Yellow Pages business has suffered for some time, the 15 Miles operation has experienced strong growth. This suggests it might find a serious buyer or could even strike out as a stand alone agency.

TMP (founded as Telephone Marketing Programs) was formed in 1967 by Andy McKelvey, who also achieved wider fame as owner of Monster.com, which eventually became TMP’s parent company. TMP was the original Yellow Pages agency that was independent from the then telco-owned directory publishers. McKelvey essentially created what became the national Yellow Pages agency, or CMR, industry.

Monster sold off the TMP business in 2005 to the private equity firm Audax Group. At that time, TMP was in the midst of a long-term decline. A 2001 study from The Kelsey Report cited TMP financial data showing a steady year-over-year decline in publisher commission revenues. In 2008 TMP resigned its membership in the Association of Directory Marketing, a move that was soon followed by the ADM’s merger into the Yellow Pages Association.

So while the demise of TMP is stunning given the company’s iconic stature within the Yellow Pages industry, it is really the end product of a very long process of decline.

Publicar, S.A., a leading publisher in Latin America, announced today a deal with Virginia-based Ya Sabe, Inc. to provide local search for U.S. Hispanics at PaginasAmarillas.com. As part of the deal, YaSabe will operate the U.S. website. The company will offer local businesses and national brands an assortment of digital advertising products and services. In addition, YaSabe will sell pan-regional advertising to global brands that want to reach consumers in Latin America and the United States.

Publicar S.A., based in Bogota, Colombia, is a multimedia content provider for South and Central America with operations in Brazil, Costa Rica, Ecuador, Panama, Nicaragua, El Savador and Guatemala. Among its products and services are phone directories, Internet search services, website production, call centers and other digital products. Publicar’s Internet properties attract more than 10 million users per month and call centers receive more than 1 million directory assistance inquiries a week.

Ya Sabe, Inc. helps both local businesses and national brands connect with Hispanic consumers living in the United States through YaSabe.com, where users can search in English or Spanish to find information about 14 million U.S. local businesses. The proprietary dataset developed and managed by YaSabe makes it possible to aggregate queries from Hispanic consumers searching online at Google, Bing or on other partner destinations like PaginasAmarillas.com and Holaciudad.com.

In the first of many possible partnerships with local media companies, Centro has teamed up with Morris Digital Works to create a network that allows advertisers to place geo- and vertical- based ads across a broad spectrum of local and national sites. Other local media partners are likely to team with Centro on similar networks. The effort echoes earlier efforts of vertical players such as Cox’s Adify, which is now known as Cox Digital Solutions.

Centro’s network enables advertisers to place follow-on ads on other sites after they hit a consumer with an impression on one of the Morris sites, such as Augusta.com. The network can also be used when a local media site’s geo-impressions are sold out, but more local consumers are sought.

The network includes 16 prepackaged geo and vertical categories, such as sports, travel, real estate, seniors, etc. Custom categories can also be created (i.e., hunting, running, military).

Morris, as the local partner, participates in healthy markups in the 60 percent to 120 percent range, said Morris Digital Works President Michael Romaner, who was speaking at the recent Borrell conference in New York. As a secondary effort, Morris and Centro are also creating The Spectrum Network, which is limited to high-quality news sites.

Mobile now accounts for a third of AT&T’s local search, according to AT&T President and CEO David Krantz, who was speaking at the Borrell show last week in New York. “We truly believe that mobile is bigger than the Web,” said Krantz, noting that AT&T has some significant head starts over rivals as a vertically integrated company. For instance, the YP.com app is preloaded on many of AT&T’s phones.

Krantz also noted that AT&T has made big strides in behavioral targeting. It started with Yahoo’s APT system, and quickly sold tens of millions of dollars worth. “We had been very skeptical selling APT to customers,” he acknowledged.

But the APT product with Yahoo was priced at a high CPM and eventually hit a wall. The company has now developed a lower CPM product, which he calls “Display 2.0.” They are ad networks for targeted display,” said Krantz. “We’ve had an initial runup like we did with Yahoo, but it has kept going.”

We’ve been starting to see the signs of recovery for the past few months. Companies that have been cutting costs and back office expenses are now realizing they need to get the sales end of their businesses moving again. Throughout the recession, salespeople who could at one time demand higher base salaries, fringe benefits, signing bonuses and vacation time suddenly found themselves under-employed, unemployed or struggling to find a better job. Many simply hunkered down and accepted lower pay and scaled back commission structures because they did not want to be searching for a job in a down economy. Employers that were hiring salespeople suddenly found themselves in a favorable position with more prospects in the past 12 to 18 months than ever before.

Now we find ourselves in 2011 with all of the economic signs pointing to a slow recovery. Our view is that the need for new salespeople or people with enhanced skills will begin to ramp up much like we saw prior to the economic downturn. A recent Sales Gravy survey indicated “75 percent of sales companies plan to increase their sales force and 23 percent plan to maintain their headcount.” Having worked for a media sales company myself, these figures indicate that through attrition and salespeople trading up to larger or more attractive sales organizations, there is a battle brewing for qualified salespeople. It is unrealistic to think attrition won’t increase in a strengthening economy.

Another trend continuing to heat up the battle is the move away from transactional single product selling to consultative multiproduct selling with a focus on online and mobile products. As more local media companies seek to move toward multiproduct portfolios filled with digital products, they will inevitably be seeking the same types of prospects in their hiring process. Salespeople who understand how to integrate traditional media with online and mobile media continue to be highly sought after, leading to a shallow pool of candidates who can and will demand higher salaries and benefits. According to the SalesGravy survey, “77 percent of media companies surveyed expressed moderate to significant concern about the availability of sales talent to meet their hiring needs.”

We recently spoke with Robert Hawthorne of Hawthorne Executive Search, a firm specializing in media sales and sales management recruitment, about this subject and he relayed some additional challenges looming for sales recruiters. “With the elimination of relocation benefits, it’s extremely difficult for candidates to sell their homes quickly and move to a new location,” pointed out Hawthorne. “With home values slipping, many candidates are locked into their local area for jobs, which further shrinks the labor pool.”

Hawthorne is also seeing that “candidates who weathered the economic storm are starting to see the advantage of exploring the marketplace creating unexpected turnover in media sales teams.” One new challenge in the hiring battle is that online and mobile companies are moving toward creating their own sales teams rather than relying on partner organizations, thus creating increased demand rather than just replacement hiring. “The increase in new products and the opening up of new markets is creating new demand for sales talent and putting pressure on legacy sales companies,” Hawthorne said.

Those sales organizations that have not increased their investment in recruiting and training or retooled their hiring process and candidate profiles, or have relied on front line sales managers to make hiring decisions, could find the battle even tougher. Traditional media companies in particular may be even more challenged by what Hawthorne describes as the three Cs, “You aren’t cool, you don’t offer enough compensation, or you can’t help the career climb.”

Media companies that are perceived as “hot” will have the advantage including online and mobile media companies that have traditionally been more aggressive in leveraging their “cool factor” and compensation models to steal or win talent. Hawthorne believes “that local media is still a good bet for salespeople because the unemployment rate in this sector is relatively low and the products being sold are from recognizable brands.”

BIA/Kelsey has been investing time and resources in understanding how this battle will play out. In the coming weeks, we will be releasing an Advisory on this topic as well as offering continuing coverage of new approaches and success stories from traditional, online and mobile media companies. We welcome feedback and case studies from our readers, which may be featured on our Local Media blog.

Centro, a pioneer in local online ad placement for national marketers, has received $22.5 million in equity financing from FTV Capital. The money will go toward expanding its regional sales presence and also toward software development.

CEO Shawn Riegsecker tells us that he anticipates adding six to eight regional offices to its existing roster of 18 offices, and doubling its sales staff from 40 to 80 personnel. “We’re helping bring the regional medium tier to the Internet,” he says, noting that the Chicago-based company works with 350 agencies and 1,100 advertisers.

Indeed, Centro’s largest growth has been among regional advertisers, including banks, hospitals, telecom, and oil and energy companies, he says. While the company has made a big push toward getting its agency software for non-local online media adopted, Riegsecker notes that 90 percent of the company’s revenues still come through Centro Media Services.

“We’re seeing three things happen in the next five years,” he says. “First, we’re seeing the movement of brand advertising to the Internet.” Secondly, Centro sees premium display ads doubling in the next five years. The third thing is that local advertising, including regional and local-local, will boom as combination of display, brand and local placement.

Mobile and video will come along with that, adds Riegsecker. “The problem with video is that there isn’t enough inventory,” he says. Search also plays a factor, and is very useful, but it is a “very mature market in respect to display,” he says.

The ability to track retail inventory has been on the retail wish list for years. Retailers advertise goods, and then disappoint customers when they don’t have them in stock. Or they have loads of stock in the store, and don’t know they need to promote it to deplete it. Or they have a lot of inventory in one location, but can’t steer customers to the right store.

Solutions have been in the works for some time, for various functions and purposes. Some have been telecom-oriented. McDonald’s, for instance, started keeping track of Big Macs and Double Cheeseburgers in 1990 via ISDN. Most, however, have been relatively primitive phone-in efforts.

In 2006, for instance, StepUp, which is now part of Intuit’s Homestead, showed the way for online inventory management by letting stores fill out inventory on a spreadsheet. A sophisticated, contemporary effort has been mounted by Krillion, which provides inventory for computers, electronics, cameras, appliances and other goods, while selling advertising around it.

More recently, we’ve also seen Milo.com develop an inventory solution for both national and local players. Wishpond is pursuing a similar strategy. The timing for both companies appears to be ripe. Milo.com was purchased two weeks ago by eBay for $75 million.

Milo has integrated with various media partners, such as The Sacramento Bee. Today, Wishpond announced a partnership to do the same with PaperG, which builds display ads on the fly for a large list of newspapers. In this case, PaperG will be able to spec out a display ad based on inventory availability (i.e., “denim hats at Davey’s Army Navy store”). Customers of its PlaceLocal service can utilize the service.

PaperG CEO Victor Wong tells us that Wishpond’s solution lets PaperG and its media partners get down to the product level for both national chains and for local stores. Roughly a quarter of its advertisers are local SMBs, he notes. Using Wishpond, “toys are ads,” he says.

“The next natural evolution to local display advertising is to show what stores and products are available within driving distance of the consumer,” Wong added, in a statement. “Ad units that allow consumers to find information on local product availability can dramatically improve the offline conversion rates of shoppers.”

While 2010 has been lauded as “the year of local,” it has also seen an influx of interest and spending by national brands to drive neighborhood-level store traffic. These initiatives have taken diverse (and sometimes highly publicized) forms: Gap’s deal-a-day offer through Groupon, Best Buy’s mobile check-in experiments with Shopkick, and a host of real-time inventory providers (Google Product Search, Milo, NearbyNow) allowing retailers to engage customers at the apex of purchase intent.

Geomentum VP Casey Squier told the ILM:10 audience that, as a byproduct of this hyperlocal focus, national brands are “turning to large agencies to put together a local program that can be understood by C-level execs that resonates throughout the entire organization.”

That’s exactly what Geomentum hopes to do for its clients when it officially launches the new technology in March 2011. Spawning from traditional agencies, it allows its client to do store-level planning by layering their sales data on top of Geomentum’s 2,000 data points about local neighborhoods. Retailers can then alter their media mix accordingly to better reach customers where they live and buy.

Ultimately, this should foster higher-quality lead generation, which is exactly what Marchex is touting to agencies through its performance-based pay-per-call platform. Scott Greenberg, Marchex senior VP of strategic development, stressed that as online and mobile advertising becomes more complicated, merchants of all sizes still demand the simplicity and measurable quality of phone calls.

Marchex’s platform allows resellers to create and distribute ad content for its clients across a pay-per-call network. Because performance governs the business model, businesses pay only when the phone rings. While Greenberg reports that the platform is largely being sold to larger brands to enable them to track store-level leads, he also hopes that it continues to move down market to SMBs.

Marchex is placing its bets on calls, but Reply.com CEO Payam Zamani thinks that search and display can still be effective as long as these clicks, or leads, are “enhanced” to account for consumer intent and location. Otherwise, driving targeted traffic is both expensive and imprecise.

The pledge to businesses through the Reply Marketplace is simple: “sign up and receive locally targeted and intent specific prospects” based on particular customer actions being sought. Echoing Marchex, he noted that two-thirds of the company’s business comes from bigger businesses looking to locally target.