TVSPY: What is one sales skill that local television broadcasters possess that would transfer over to online?

BORRELL: I don't think there is much that really transfers other than the basic ability to close a sale or the ability to read the buying signals of a potential client. Those are really skills anyone could have.

The big problem however, is the web is not a broadcast medium. In most cases we are not talking about a $1 million or even a $100,000 contract for advertising. We are only looking at several thousand dollars per contract. Broadcast sales people don't have the time or interest to focus on those types of deals. The current compensation structure and incentives also don't motivate broadcasters to focus on web advertising.

TVSPY: You are a huge advocate for generating online sales, but why should broadcasters care if the revenue opportunity is still relatively small?

BORRELL: Well that's the conundrum. Eventually it will be a medium that commands $100,000 or $1 million contracts in a local market. It may not be today, but what broadcasters need to be doing is creating those relationships and seeding the market.

All of their effort today should be focused on where advertising dollars will be a few years from now. Five years from now advertisers will be shifting significant amounts of money out of broadcast and into online. It will require much less effort for broadcasters to change their course today by small increments, as opposed to playing catch up five years from now.

TVSPY: In the sales process, is there still a lot of time spent educating potential clients on the benefits of advertising online?

BORRELL: Yes, but much less so than it was two years ago. We have found that since the end of 2003 and early 2004, the Internet pretty much hit critical mass. It has been about seven or eight years now of a steady stream of information into local markets about online advertising. Local businesses were finally educated enough by 2004 and had their appetites whetted enough by their own trade associations that the Internet can provide something valuable to their businesses.

Today online advertising is much more about fulfilling the sale rather than being purely educational and convincing someone to test it out.

TVSPY: According to your report, almost 35 to 45% of all television broadcast revenue comes from autos, but only accounts for 18% of television website revenues. How can that gap be closed?

BORRELL: This goes back to the argument that if I'm a broadcaster, why should I make adjustments for my online sales if my largest advertiser is spending a relatively small amount of money there? Broadcasters need to pull back from tactical decisions to strategic decisions. A tactical decision is basically a knee jerk reaction, developing a response only when someone is in fact spending money in a particular area.

From a strategic point of view, when you take a look at the bigger picture and see that 40% of your ad dollars are coming form the automotive sector and they are spending more and more of their money online, you have to ask yourself, "Where is that going to be five years from now?"

TVSPY: Which advertising category is most willing to spend money online right now?

BORRELL: One thing I'm concerned about is the mindset of constantly worrying about what all the other television stations are doing and then trying to be the best. Why set such a low threshold as your goal? There is so much more that can be done out there.

In terms of television broadcast websites, they are finding the most success with the medical and healthcare categories. Particularly with elective surgery. These particular advertisers feel they have a mandate to explain what their procedures entail. In the past, they have done this through brochures distributed in their offices, in newspapers or via direct mail.

They are very focused on providing lots of information about their services and the Internet provides a great way to offer that information. Online video also provides an electrifying way to provide that type of information. We are projecting that this category alone is going to spend around $200 million on local online advertising this year, roughly 5% of local online ad dollars.

TVSPY: What are some short-term goals broadcasters can be working on as they move toward the long-term vision you've described for local online advertising?

BORRELL: Probably the most important asset that a television station has in this game is its ability to promote.

Their brand doesn't mean squat in the marketplace when it comes to online. We see a lot of GM's wince when we say that, but it's true. The television brand is a wonderful brand and in some markets a very, very strong brand, but it's a television brand, it's not an online brand.

The web is a completely new medium. The brand is not as important as everyone thinks and neither is the content. The type of content they do have online, like weather, has been commoditized. The news is in such an abbreviated format on television sites that newspapers have a much stronger edge online.

A few years ago, we had done some analysis on traffic reports from WorldNow in all of their markets. As we reviewed the data, we saw very clearly that there were enormous spikes in traffic in some markets. They attributed those spikes to a weather or news event, which heavily drove traffic to their sites.

We compared this data with newspaper website traffic, which is 10 times greater, in those same markets, on those same days. There were no traffic spikes, nothing! We made sure it wasn't a specific promotion unique to those television stations, but rather it was in fact because of a news event.

The response to television is just huge compared with newspapers. If you marry that up with what the advertisers are telling us they want, it's a perfect match, particularly with classifieds. You go to any auto dealer, real estate agency or businesses who heavily recruit and they want traffic for their websites. If you have the ability to drive that traffic with your television station through your website, then the strategic play becomes building up traffic to those specific vertical areas.

The promotional capability that the station has to build up a new brand, to create a new brand online or to create specific verticals through their website is probably the biggest asset that they've got.

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About the Author

Stephen Warley has made a career out of assessing the future direction of television, working at CBS News, CNBC, ThirdAge Media and most recently as General Manager of TVSpy . He completed his MBA at Fordham University with concentrations in media management and finance in 2004. Stephen is no longer writing Next Generation TV for TVSpy, but he continues to write on his Broadcast Web Ideas blog. You can email him at stephenwarley@gmail.com.