Dallas Morning News dives into digital agency business

The Dallas Morning News
The Dallas Morning News will start reselling marketing services to small and mid-sized local businesses, Terry Maxon writes. A.H. Belo, the Morning News’ owner, is putting $3 million into its plan to sell LocalEdge’s suite of services, which include SEO, social media and targeted advertising, to small advertisers.

The company will be named 508 Digital and will employ 50 people on its sales team. The Morning News is the first non-Hearst-owned paper to partner with LocalEdge, a Hearst property. Readers of the paper’s website, a press release says, “will also benefit from a local search directory of the area’s businesses that will be integrated into the news site. Businesses can be featured by category through premium placement and attractive profiles.”

Maxon quotes a Belo announcement saying the company expects the LocalEdge deal “to bring in $2.5 million and $3 million in revenue in 2012, growing to $18 million to $20 million by 2014.”

A recent Project for Excellence in Journalism report about the cultural divide among newspaper sales staffs, which I summed up when it appeared, quoted a newspaper executive who said sales to such businesses are “where the game will be won.” Another executive told the study’s authors he worried about whether his current staff knew how to sell digital products.

The report found “digital agency” approaches worked for a few newspapers — including one that was making millions — and were underwhelming for others. One executive told the study’s authors “he thought newspapers are not in a good position to compete with local ad agencies.” The bet here seems to be that a scaled-up operation would be a stronger competitor.

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