Stations Get Creative to Find Revenue

Ax-wielding advertisers have delivered a serious blow to TV stations' top lines over the past several months.

But broadcasters aren't meekly watching the devastation from the sidelines. Instead, most have been trying to boost revenue by strengthening relationships with existing advertisers and jacking up incentives for salespeople to bring in new business.

"We're really getting back to basics with our selling," says Constance Gekas, a sales and marketing executive at WLS, the ABC O&O in Chicago. "You have to get to the decision-maker, and you really have find out what a client needs. The way to do that is to ask the right questions and treat it like it's your own business."

That's a common sentiment at TV stations around the country, fueled by the sinking ad economy.

Despite heavy political ad spending, spot TV year-over-year revenue fell 2.8 percent last year, according to TNS Media Intelligence. And even the most optimistic forecasts see it dropping another 10-15 percent this year against the tough political comps of 2008.

Undaunted, smart broadcasters see those numbers as a call to action.

"What we're doing, first and foremost, is making sure that our general managers are out in the communities and talking to major advertisers," says Peter Diaz, executive vice president of TV operations at Belo. "It sounds fundamental and basic, and it is. This is the right time to do that."

The idea isn't merely to have face time, but to craft ad strategies that will help advertisers move product, whether that's traditional TV schedules or multiplatform deals.

Another strategy that many stations are using to bring in ad revenue is to talk to a greater number of prospects than they have in the past.

Stations are drilling down to a deeper list of advertisers, including local businesses that haven't previously advertised on television or who were priced out of TV years ago.

And salespeople are talking directly to advertisers more than ever to ensure that they understand the benefits of TV.

"The spot TV business was very reliant on agencies advocating for spot television," says Kathleen Keefe, vice president of sales at Hearst-Argyle. "As all the new media came along, we realized that the value proposition of local television wasn't being conveyed well to the advertisers themselves."

She says Hearst-Argyle tasked salespeople with talking up local TV to nearly 200 advertisers, both existing clients and prospective clients. Managers are making sure the right incentives are in place for sales people.

"Our compensation has always been set up so that salespeople are rewarded higher compensation for direct advertisers, folks that maybe haven't been advertising on television," says Diaz.

Ed Munson, VP and general manager of KPHO, the Meredith-owed CBS affiliate in Phoenix, used a contest in the first quarter to find new advertisers. "The salespeople were incentivized," he says. "We had hourly prizes and prizes at the end of the contest."

The contest didn't pit salespeople against each other, but instead rewarded each salesperson for achieving certain goals.

"It could just be activity in some cases, like how many new business appointments they got," says Munson. "Sometimes rewarding activity gets everyone's juices flowing."

Part of some broadcasters' new-business strategy is targeting local advertisers that in the past mostly used Yellow Pages and newspapers.

If you look at the local advertising opportunities in any given market, it has been radio, newspaper, local television, Yellow Pages and direct mail," says Keefe. "When you look at some of the competitive media, they're obviously challenged."

TV, when priced right, is a viable alternative to these outlets, she says.

The result of this drilling down is that many stations are seeing increases in spending by law firms, plumbers, trade schools and small retailers that in the past perhaps thought they couldn't afford TV.

While no one is saying these dollars are offsetting cuts by automotive and other major categories, this revenue is making a bad situation decidedly more bearable.

And there's another possible benefit: these advertisers may just stick around when the economy rebounds.

Broadcasters are finding that they can attract new advertisers at lower costs to their Web sites and sometimes upsell them to the station itself.

"We have a series called The Verminator, where one of our reporters is talking about scorpions, bees and bedbugs," says Munson. "There's a huge amount of complementary information on the Web site, like interactive maps with the worst areas for bees, that sort of thing. And guess what? A pest control company may be very interested in that type of thing."

LIN TV is using a sales strategy to get salespeople charged up about bringing in TV and online business. It's called Blue 32, named after the football blitz, according to Robb Richter, LIN's senior vice president of new media.

Half the stations' salespeople in March and the other half in April were tasked with going out and booking at least six figures worth of new business in one 24-hour period.