JOURNAL PURSUES CROSS-PLATFORM STRATEGY

Most broadcasters, when they talk about operating more than one station in a market, they mean more than one TV station.

But at the Journal Broadcast Group, they often mean TV and radio stations. The broadcast division of the publicly traded Journal Communications now has TV and radio stations in four markets—Milwaukee; Omaha, Neb.; Boise, Idaho; and Tucson, Ariz.

Which is not to say the broadcast group has anything against TV duopolies. In fact, it currently operates NBC-MNT duopolies in Green Bay, Wis., and Palm Springs, Calif. (Journal is now operating the MNT half of the Palm Springs combo, KPSE-LP, under a local marketing agreement, but it has just received FCC permission to buy the low-power station for $4.7 million.)

Here is the Journal’s 12-station TV lineup:

WTMJ Milwaukee, Wis. (NBC, DMA 34)**
KTNV Las Vegas, Nev. (ABC, DMA 43)
WFTX Fort Myers-Naples, Fla. (Fox, DMA 63)
KGUN Tucson, Ariz. (ABC, DMA 68)*
WGBA Green Bay, Wis. (NBC, DMA 70)
WACY Green Bay, Wis. (MNT, DMA 70)
KMTV Omaha, Neb. (CBS, DMA 75)*
WSYM Lansing, Mich. (Fox, DMA 112)
KIVI/KSAW-LP Boise, Idaho (ABC, DMA 113)*
KMIR Palm Springs, Calif. (NBC, DMA 144)
KPSE-LP Palm Springs, Calif. (MNT, DMA 144)

*Also owns radio stations in the market
**Also owns radio stations and the daily newspaper

But it’s one thing to own cross-media outlets in a market. It’s another to make them work together, make the sum greater than its part.

In this interview with TVNEWSDAY Editor Harry A. Jessell, Journal Broadcast Group CEO Doug Kiel says his group has managed to get its stations to collaborate, for the good of the advertisers and for the good of the company.

Just don’t call it synergy.

An edited transcript follows:

You have at least four markets where you have radio and TV. What degree of cooperation do you achieve in those markets?

It’s the linchpin of our local market focus. It’s what we call our cross-platform strategy. Clearly, there are operational efficiencies when you can leverage the back office and engineering on the expense side. But more important is the ability to build products and brands more quickly.

A lot of big companies have done this traditionally, so this isn’t unusual. I’ll give you an example. When we purchased our TV station in Tucson, KGUN, we made some adjustments, the way it looked and the way its news was positioned. We then used our four radio stations there to market it like crazy so people would know about the changes.

At the same time, we were able to market our market-leading radio stations on KGUN and continue to build its ratings. We’ve found that to be very, very effective.

We’ve also developed a depth in the marketplace, a real awareness among advertisers of what they can expect when they come to a Journal station, television or radio. We have separate sales staffs, but we’ll integrate the stations in a way that gives advertisers a really significant impact in the marketplace.

We’re also tying our stations together with our Web strategy. We feel that that’s going to be a very strong part of our future and that it’s better than just having one Web site for a TV station or a radio station. We’re able to build sites that impact different viewer/listener groups and integrate them where necessary.                                          

In Milwaukee, is the Journal-Sentinel part of your cross-platform effort?

Yes. We have an interactive group in Milwaukee that’s led by Carl Gardner, who’s our vice president of interactive media. He is also part of the broadcast group so he oversees all of the sites that we have in the Milwaukee market. That’s where the newspaper, radio, television and weekly newspapers intersect. We have a whole series of different sites, but we’re able to build them collaboratively.

We’re doing it elsewhere, too. We’ve put together a classifieds site in Omaha called Onow. That’s a discrete site that our radio and television stations promote. We leveraged on the expertise and experience from our Milwaukee newspaper and interactive group.

In many of these markets, you say you maintain separate sales staffs on the radio and TV sides. Is there a place for a marketer or an advertiser to go when he wants to buy the whole package?

We do it depending upon a specific advertiser or need. If we have a creative idea that we think is applicable for either a new category or some existing category that really needs a boost, we’ll get together and find a way that we can put our groups together. The advertisers often times want a converged solution. If so, our folks will get together and try to figure it out.

We use a solution-based selling model where we try to understand what the advertisers are looking to do. Then, it’s up to our folks to creatively come up with a solution that will help drive their business. We have quite a few of the pieces to make it happen.             

A lot of people have tried this synergy thing before. When everybody has their own P&L, how do you get them to cooperate? How do you get the radio people to say, when they’re in front of an advertiser, well, what we really should be doing is getting the TV station involved in this, too?

First, we try not to use the word synergy because it’s one of those words that makes you wonder, does it really advance our business or is it just something we say to feel good about ourselves?

But you’re right. Our sellers are competitive because they have their own P&Ls, but there’s a real emphasis on what will work best to solve a particular problem for an advertiser and to help move our business forward. Those kinds of meetings are held quite often just to brainstorm.

We work hard to build a collaborative culture. You’ll have your ups and downs, but, over the long-term, you’ll achieve a joint understanding of what it takes to move the business forward. We spend a lot of time really talking about that, about the greater business goals for the company.

In Boise, we have the same general manager over radio and TV [Bob Rosenthal], so it’s easier there. They’ve built a culture where they collaborate.

I was looking at the latest earnings for the company. Your third quarter revenues were down 11.6 percent. Is that all due to political comps?

We’ve had several very strong political quarters so, for the television group, it was the much lower amount of political advertising in the third quarter that caused that decrease. Also, in some of our markets national advertising was off while our local advertising actually was up.

How’s the political shaping up for 2008? Do you have any really competitive markets?

We are in a significant number of markets that tend to do well when the political season comes around. They, of course, include Wisconsin, where we’ve got several stations; Nevada, which has become a very good political state; Missouri and Michigan; and a couple of others. So we’ve generally been a company that looks forward to the political year. Of course, we also have Olympics because we have three NBC affiliates. That always happens in the even years.

It looks like you have some good markets. Boise is a good market. Vegas is always growing. Have you felt the housing pinch in Vegas yet?

To answer your first question, we have several markets that we’re thrilled to be in. Las Vegas is one of them, Tucson is another, Boise is a third and Fort Myers, Fla., is another one. Those are all markets that have been fairly strong the last few years. But the housing downturn is clearly impacting places where there had been a housing boom like Florida and, to some extent, Nevada and California [Palm Springs].

And how does the housing slowdown affect you?

It affects the general economy where folks obviously don’t feel that their prospects are quite as good as they’ve been. It also trickles down into the building and hardware and other categories that involve people who are building houses and filling them up with things. So that’s why, in a time like this, we go through some difficulties.

You have been a station buyer. You bought three stations from Emmis in 2005 and now you’ve bought an LP in Palm Springs. Are you still in a buy mode?

Well, what we’ve said is that we like the television and radio business, but we’ve always been disciplined acquirers and we’re really focused on building shareholder value. So where we find that something fits exactly with what we’re trying to do, and it builds value for the company, we’ll certainly take a hard look at it.

It doesn’t seem like you’re looking to cluster anything geographically. You’re all over the place. What are your acquisition criteria?

We’ve never necessarily believed that clustering geographically is a way to drive faster growth. We’ve been disciplined about the markets we’ve chosen to go into. We’ve been generally a big market player where the markets have some underpinnings of growth—population growth, retail sales growth—because broadcast travels with that. So that’s what we’ve really focused on rather than any kind of geographic location.

You have diversity in terms of network affiliation. That’s a nice hedge for you.

That’s happened because of the Emmis acquisition. That really helped us because we were very dependent on NBC, which, of course, was a nice thing until the last couple of years. But, as you say, that kind of luck can run out on you. So, when we bought the three Emmis stations, one was a CBS, another was a Fox, the third was an ABC. It really put us in a really nice place when it comes to diversification of networks.

You’re on the NBC affiliate board. All the networks are experimenting with broadband distribution. How do you feel about losing the exclusivity on all your TV shows?

First of all, as owners of network affiliates, our goal should be to control what we can control in the local markets. That’s our focus. And so that means that for us the future of our television businesses will be to be a leader in local news, that’s the linchpin of our strategy. That protects us from time shifting and the other things that are going on.

We’ve started local, community-oriented shows in our marketplaces to diversify ourselves. We have a show that’s called the Morning Blend in Milwaukee and in Fort Myers, where we’ve eliminated a syndication string and we’ve brought advertisers to television that haven’t used television before.

Then, the third piece of it is that we should support our network as much as we can. If the networks are stronger, they can invest in the kind of programming that allows us to have good primetime ratings.

We look at how willing the networks are to partner with the affiliates. I think that NBC is very thoughtful about that and it’s our job to continue to work with the network to make sure that, as we develop projects, that we can both prosper going forward.

We are focused on driving viewers into our Web sites where we can monetize them and a lot of that has to do with offering compelling products so that we can get our page views up. That’s what we’re focused on more than what the network is doing in terms of second runs on their Web sites.

You’re an affiliate of all four networks. Which would you say is the most affiliate friendly now?

Our goal is to work with all of them. They’re all different from each other. We have good relationships with all of our networks right now. You always have those moments where you wish they were more sensitive to the concerns we have about moving around programs or giving you advanced notice so that our sales traffic folks can keep up with the changes. But right now, considering the situation, we have good relationships with all four of our networks.

Television is probably the last standing example of a true mass media. You can see it when the networks come up with great programs in primetime. So that’s why I think it’s important to put all the parochial stuff aside and work together.

You’re also on the TVB board, which is hard at work with its ePort initiative.

I’m real impressed with Chris [Rohr] and the folks at TVB. The ePort is what advertisers need to make sure that television is responding properly, to improve the way that we serve agencies and advertisers. They’re also building the understanding that when it comes to programming, TV stations are still on top. They get the word out about how powerful our medium is as an advertising vehicle, as a viewer vehicle. That’s crucial and TVB does a tremendous job with that.

But TVB’s No. 1 job is to sell national spot, and national spot continues to decline. Do you see that decline as inevitable?

In radio, we saw over the years that national spot as a percentage of overall revenue went down. So, it’s incumbent on all of us who operate television stations to kind of learn from that and make sure that we are absolutely the best that we can be at serving local advertisers and finding solutions for them, making sure that they understand how we’re a part of their business proposition. Coming up with ideas and being creative is really vital.

As far as the inevitability question, I don’t think we can take it lying down. National television advertising is still a very significant portion of what we do. Through TVB and through our national rep firms, we just have to continue to show national advertisers that they can use our distribution model and that it can work for them and be efficient for them.

We just have to work on that really, really hard.