5 Powerful Takeaways from NYC Media Companies

I was fortunate enough to be able to spend a week visiting some of the most innovative US companies this past week with the 2014 Local Media Association Innovation Mission (#LMAIM). The trip took us to New York City, where we had face to face meetings with The Wall Street Journal, The New York Times, Simulmedia, Gatehouse Media, RegionalHelpWanted.com, BuzzFeed, Russmedia and CBS Local Media. What follows are some initial themes and insights gathered from meeting with this highly innovative and successful companies.

1. Native. It is here and it works.

Regardless of the controversy this new ad unit has created, all of the media companies we visited in NYC have some sort of strategy for providing native or sponsored content. Advertising revenue is shifting, and focus on advertiser ROI is rapidly becoming more important as metrics and engagement continue to dominate headlines in the advertising world. BuzzFeed is clearly a front-runner in the native ad space:

"We are the newsroom for our brand partners. We are helping them react to events that make sense to their brand." - Matt Trotta, BuzzFeed passionately conveyed during our meeting.

Some strategies involve taking the advertisers content, others are about creating the content as a service. Content quality was also an important topic and resources are being devoted to ensure that this is not viewed as an advertorial play. Concentrating on verticals seems to be a common theme that is yielding good ROI for all parties in the transaction (consumer, brand, media company.)

Native is not a fad. Time to get on board and develop these marketing products in your own local market.

2.Innovation does not just mean creating new digital products.

So much investment and focus is on digital and new technology, but we heard from several companies that are "doubling-down" on traditional media. "There is a risk in too quickly diminishing the value of print," said Kirk Davis, CEO of Gatehouse Media. "Local is a very, very big space."

"Innovation is challenging, " said Davis, "I do not want to let go of the great business we have now nor do I want to accelerate its demise. Print is valuable."

CBS Local is also working hard to integrate its radio and digital products and leverage the traditional brand. "It is important to push the core (news) but we also need to provide what consumers want. We have to take content and put it wherever the consumers are," said Ezra Kucharz, President CBS Local Digital Media, "How do I get a fan arguing with an expert?"

And CBS is doing just that. Great examples includes new video content like the Tailgate Fan or music documentaries on Radio.com. "Take radio and turn it into video," Kucharz said.

CBS has a very clear focus on profitability and ways to leverage content online. "Social media is the pipes of the internet. It moves people around. We want the traffic on our brand sites not Facebook."

3. Journalism needs more than display ads to survive.

Probably the most 'real' or honest discussion we had came from Kirk Davis again:"There are difficult questions I am asked by our employees when I visit different markets like 'When am I going to get a raise?' Well, we are witnessing the liquidation of the newspaper business. In the future, Propel Marketing is going to fund journalism for our company."

Gerold Riedmann, CEO of Russmedia said "Professional journalism can not be financed only by advertising. Something has to change."

News has been subsidized for years by advertising. Classified verticals are probably the most noteworthy in newspaper's past, generating profit margins into the 45%+ range. Those high profit margins attracted competitors, who picked apart the revenue hold newspapers enjoyed for 50 years. GateHouse's Kirk Davis believes that digital services provided by Propel Marketing should eventually fund journalism.

4. Partnering is key to competing locally.

Eric Straus provided the group an entrepreneur's viewpoint. Founder and owner of RegionalHelpWanted.com (for the 2nd time), he provided valuable insight regarding running a business: "We need to get into bed together," said Straus, "Let's make a strong local brand primary over the national players."

His logic is simple, and the success of his business shows that it works. In the markets he operates, local businesses and 'jobseekers' turn to regionalhelpwanted first. Rather than have all the local media players compete against each other in a market and have the national brand swoop in and take or continue to enjoy share, instead create a strong single presence that is #1 in that category. A great example of leveraging the strong brand power of traditional media into a vertical that was assumed lost by the local media industry.

5. Disrupt yourself before you are disrupted by a competitor.

"You should jeopardize the newspaper. Would you want someone else to do it?" said Gerold Riedmann, CEO of Russmedia. "We do not integrate print and digital, and are actively trying to lure money away from print."

Riedmann referenced disruptive innovation theories developed by Clayton Christensen and disruption in the newspaper industry by Clark Gilbert, President and CEO of the Deseret News and Deseret Digital Media. Utilizing the concepts illustrated, Russmedia developed a strategy that leverages the strengths of each media type separately. Russmedia believes:

1. Mobile traffic will exceed desktop traffic in Austria this year. Mobile is our focus.

2. There will be even greater specialization and fragmentation by digital portals.

3. Geography is becoming less and less important.

4. Keep things separate. Integration never works

5. There is not just one transformation inside the company occurring, but several.

Brandon Erlacher is an innovator working as the Publisher for The Elkhart Truth and CIO for Federated Media, a media company serving northern Indiana and southern Michigan. Brandon leads a company that produces a daily newspaper, elkharttruth.com, flavor574.com, digital food magazine and , an AM radio station. This post originally appeared on www.erlacher.com.