NCI’s Shopper Pubs Fully Integrate Web Offering

With the onslaught of online, fragmentation and new advertiser models, newspapers and other local media could have it tough. But perhaps no one has it tougher than the free shopper publications that are distributed at grocery stores, vending boxes, libraries and coffeehouses.

One of the oldest and largest shopper companies, Network Communications Inc., aims to turn it around for the digital era. The publisher of such titles as The Real Estate Book and Apartment Finder, the company distributes 13 million books every month and has more than 45,000 advertisers.

The company is owned by a unit of CitiGroup Venture Capital and led by Dan McCarthy, a directional advertising veteran who had previously held top jobs at PRIMEDIA Enthusiast Group and Cowles Business Media. (Personal Note: Back in 1992, McCarthy and I teamed up with Gary Arlen to write a couple of reports together on the future of electronic directories when he was a VP with Communication Trends Inc. Roughly 60 percent came true.)

One of McCarthy's first decisions, when he came on board in 2002, was to bring the burgeoning online business in-house. Previously, NCI's real estate efforts were managed in conjunction with Citysearch. While the partnership brought in $2.5 million a year for NCI, the system was never customized for real estate and NCI’s other verticals. Moreover, Citysearch was moving away from classifieds at that time.

Another early decision was to hire Glenn Goad, the real estate agent turned Citysearch executive who had been handling the venture/partnership. Goad has been steadily promoted throughout the organization and is currently NCI's executive VP, consumer strategy, where he works to leverage the strengths of print and online in reaching consumers.

Goad, who is speaking at Local '07 on our Vertical panel, had an extended phone conversation with me from the company's Lawrenceville, Georgia, headquarters. “Less than 10 percent of our revenues come from online,” he says. “But it represents 30 to 40 percent of the value” because consumers start their searches online and rely on the integrated strength of the online and print services that are provided.

“If for some reason, we decided to abandon online (which we would never do), it would have major, major repercussions well beyond the existing revenue. Some brokerages and Realtors don't want to share listings online because they think they can keep it all to themselves. But we see that their results go down significantly. It just works better to integrate the whole experience of print and online.”

Goad marks the evolution of online within the company and the industry. “Basically, we've had three stages. First, we had Web sites. Then we created a Web 'environment,' where we saw the Web as sales tool, and developed partners. But the third stage really represented the dawn of integrated marketing, where we are really connecting engaged consumers with our advertisers.

“We're providing more value all the time to advertisers,” he adds, noting that NCI is collecting all kinds of data on individual properties that it can pull up every time it hits the market. “We weren't doing that five years ago. We were just putting our listings out there.”

NCI also developing a “Web ID” feature that provides related Web information with every ad. The company expects the Web IDs will eventually get 300,000 to 500,000 references per month.

“But we noticed something,” says Goad. “The (pricing) elasticity of advertisers is very set. They may pay us $500, but even if we double their business, they won't give us $1,000. They need to spend there marketing dollars on multiple media to help satisfy the sellers.”

Goad feels the path to reinforcing their value, and winning upsell dollars, is to keep pushing on the value. One effort has been the introduction of dedicated, measured phone lines. In a recent test in multiple Real Estate Book markets, “we learned that our ads don't bring in 20 calls per month like we have talked about for years. They actually generated 111 calls in three months”  85 percent more. This continues to prove that the print product creates tremendous value for NCI’s advertisers.

Direct connections to consumers are also vital. It is the home seller who insists that Realtors put an ad in the newspaper,or in the book, he says. “They can see the value. We're having more conversations with consumers than we've ever had. The home owner is helping drive the marketing decision. The more we can do to help Realtors understand consumer behavior the better off our advertisers will be.”

The company's next big initiative centers on video. “We want to bring video to the real estate space in a new and exciting way,” says Goad. The company envisions an archive of 400,000 to 500,000 videos.

As part of the video initiative, the company is providing free virtual tours for apartments  something that until just a couple of years ago cost $150. “Video has three levels,” says Goad, who is being advised by a team at Brad Inman's TurnHere, a company with deep real estate roots. (I recently did a profile of TurnHere. Inman is speaking at Local '07 on the video breakout.)

“The first level is corporate quality videos, with big budgets,” he says. “This will not work in the real estate space since the shelf life of a property for sale is not that long.” The second is a mid-quality video that can be used for Realtor bios and branding, or neighborhood tours, etc. And the third is user-generated video, which are effective enough for basic home shoots.

To Goad, all these efforts will mean the preservation of NCI as a leading provider of real estate, apartment and home improvement information. “Right now, we might have the sole listing for 101 Main St. Five years from now, one of our goals is to have the best version of 101 Main St.” This will keep consumers using our product and advertisers getting the value they expect from advertising with us.

Appearing with Goad on the “Focus on the Vertical Revolution” panel on March 21 are Matthew Berk, Marchex; Lem Lloyd, Oodle; Chad Schott, R.H. Donnelley; and Lockhart Steele, Curbed.

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