Gannett is putting a local spin on the publisher-as-agency model

“Our partnerships to date have been an advertising one,” said Kevin Gentzel, chief revenue officer for Gannett and the USA Today Network. “We have made three acquisitions that can change the perception of who we are. It helps us evolve from being the newspaper selling selling advertising and being a marketing partner selling solutions to local businesses across the country.”

The evolving pitch comes as Gannett and other local newspaper publishers struggle to replace declining newspaper advertising with digital and reader revenue. In the second quarter of 2018, Gannett’s digital advertising grew 8.5 percent year over year to $108 million, but it wasn’t enough to offset a 19 percent decline in print ad revenue. (Total digital revenue represents just over a third of all company revenue.) ReachLocal, which provides search and social optimization services, was a bright spot, however, growing revenue 17 percent to $100 million.

While advertising in local traditional media is declining, digital is on the upswing. BIA/Kelsey predicted that local ad revenue across the U.S. would increase 5.2 percent in 2018, to $151.2 billion, with significant growth in social and mobile advertising.

Google and Facebook dominate digital advertising, and while local businesses are also putting more of their media dollars towards those big platforms, local media operators like Gannett will have to convince the local businesses to use their agency-like services to help them spend that money instead of doing it themselves. Scaling marketing services at the local level is another challenge for the agency model. But with its recent acquisitions and scale through its presence in 100-plus markets, Gannett sees local being the growth driver for the company.

“We think local businesses will not only catch up but be the lead in driving the shift to digital,” Gentzel said. ‘We believe local businesses who are facing fierce competition like we are as media companies from Google, Facebook and Amazon deserve the type of data-informed best practices, technology and solutions that national businesses received from agencies and consultants.”

The move into agency-like services also lets the company expand beyond the markets where it already operates local media. It already has ReachLocal offices in some markets, but is looking to expand that to new cities, where it will brand its services as “part of the USA Today Network.”