Q & A with Bill Caudill

By Deb Shaw, Editor, Suburban Publisher

Bill Caudill, Vice President of Sales & Training for Borrell Associates, developed and now manages their sales training division which has generated millions of ad dollars for their clients during his five-year tenure. In the last month alone Caudill’s digital sales training program has generated a quarter million dollars for their clients in local ad sales.

Suburban Publisher recently sat down with Bill to learn more about his recent experience with the zip2save mobile advertising experiment and garner his valued thoughts on mobile advertising overall.

This is the complete Q&A with Bill, portions of which were also published in the November issue of Suburban Publisher.

1. So, what’s this I hear about you cramming into a car and driving all over the place to conduct a test on mobile marketing with local newspaper partners - what was that all about?

Not just cars, it was in fact trains, planes and automobiles! We met and trained more than 100 sales people at nine newspapers in a two-week period. At each location we came in with a team from zip2save mobile, SNA, Shooger and Borrell Associates. We worked with newspapers in Bloomington, IN; Long Island; Bristol, RI; Chicago and Lake Tahoe. The management and AEs were great. In some markets we held mobile advertising educational seminars for local businesses.  After a series of training webinars we push the AEs out of the nest, so to speak, to put the training and local market research we provide into action. It’s a great program and the test markets responded well.

2. We keep hearing that now is the time to get into mobile. What’s the urgency? Outlook?

This is a space race. Local business investment in the United States in mobile advertising is projected to increase over 2,000% to $2.4 billion within the next 5 years. Particularly we see tremendous growth in the SMS/Text category. That being the case, we feel those media companies that secure keywords and short codes for local businesses early on will be the big winners. It is my belief that once a local business settles in on a keyword and short code they are less likely to change providers. Think about it, once you become the text provider for a local business that keyword and short code is advertised everywhere. In the newspaper, outdoor, POS, tabletop tents, the list goes on. Over a short period of time a local business has a substantial investment in their keyword and short code and they are less likely to change providers. Why not get out in the market early and provide these services now?

3. What exactly is mobile marketing? Are there different forms? Can you give us a real example of mobile marketing in action? 

Yes. Let’s tackle mobile marketing first -- as most of your readers already know, marketing is the combination of advertising + promotions.  Promotion examples are coupons, money off, “buy one get one free” type of offers. Mobile marketing combines the components of advertising, promotions AND targeting. SMS/Text is the simplest form of mobile marketing. As an example, a consumer sees an ad to join a loyalty club for a local business. To do so the consumer must text in a keyword and short code and they now become an asset in the business’ database of numbers.  Business owners can then send offers back to consumers that have granted permission to be contacted via text. Consumers respond and walk in the door showing the local business the offer they received on their phone and the sale occurs.

A good example is Scotty P’s restaurant chain in Dallas. Scotty P’s has six locations. Over a year’s period, they have collected about 2,000 mobile phone numbers in their database. They can fire out a” buy one get one free” offer to their SMA/Text database at 10 in the morning, and by 1 o’clock, usually 40 people will walk in the door, show their phones with the coupon on it, and buy a hamburger.

SMS/Text is just one form of mobile marketing. There are four others -- Apps, Browsers, Email and In-Game.  All have rich media like qualities and can be just as effective if not more so. The key is to engage the user and ask them to do something such as join your loyalty club, download an App, or enter a contest.

4. Who is the target market for these messages and how do you obtain permission to send them alerts?

As it pertains to SMS/Text the target audience is consumers that are interested in a particular businesses product and/or service. In other words, via SMS/Text a business invites one to become a member of their loyalty club. A consumer responds via SMS/Text. When one does so they are giving permission for that business to contact them with offers via text. In other words, by consumers opting in and giving permission for a business to contact them via SMS/Text they become a part of a targeted database for that business. A business is thus advertising to people that want to obtain information about a business’s product or service; what better form of targeted advertising can there be?

There is a best practice in the industry called double opt-in. What this means is that when a consumer initially opts-in and responds to the first SMS/Text request then they are immediately sent another verification text. It may say something like “Thank you for responding to our offer. To redeem this offer, simply show your phone offer to us when you come into our store.  To receive more offers like this simply reply “Yes.” When one replies “Yes” they are giving that business permission to contact them anytime via SMS/Text. However, it is important that businesses know that they should only text their database four or five times a month. And when they do so they must provide appropriate and compelling discount offers to drive consumers into their store. When a business violates those rules they will lose text subscribers as many will opt-out.

5. Let’s say I’m a local publisher and I want to begin a mobile initiative in my market. Where do I start? What’s the process?

Call Nancy Lane, President of SNA at (843) 390-1531. Nancy and her team are behind the Zip2Save mobile project. They have developed a mobile platform that is turnkey for local media companies. Their experience will help a local newspaper get out of the gate quickly in this space. The third-party platform they selected is terrific and easy for local media companies and businesses to use.

And, local media companies need to put together a marketing and sales plan. They need to understand how much local mobile ad revenue is in their market. Borrell can help provide that information. Once that is determined, then set a percentage goal of local mobile ad revenue in the market. Train your sales people on how to position and bundle mobile into their portfolio of advertising products. Define a target list of business categories to speak to first such as restaurants, gyms, auto repair and the like. Host mobile advertising seminars when launching the product and promote it heavily in your local paper.

6. What are the costs associated with entering this space? What’s the revenue potential? How is it priced?

I am not a fan of local media companies such as newspapers going it alone in this space.  In other words, there are plenty of third-party vendors like zip2save mobile that a local newspaper can partner with on a revenue share basis. Certainly there is something to be said for a local media company keeping all the ad revenue in this space, however mobile platform development may not be your newspaper’s strong point. Why not partner with a third-party mobile provider and get into this space next week rather than next year?  With a revenue share agreement usually the launch costs are minimal. It does need to be said however that each third party provider will have different terms but in general most offer at a minimum, a 50/50 revenue share opportunity for local media properties.

The revenue potential is enormous. As I alluded to earlier, mobile advertising revenue is forecast to be the fasted growing form of advertising revenue in the history of advertising. In my home town of Louisville, KY, alone, mobile ad spend from 2009 to 2010 is projected to grow from $9.7 million to $37 million.  Although the growth numbers are huge, this is most certainly a numbers game for local media companies. A local newspaper needs to set a target for 5% of all local business in your DMA to be on your mobile platform in year 1.  In Louisville that is 2,500 businesses. Why?  Mobile adverting costs are even less expensive than traditional online advertising. Below is the initial pricing model that zip2save Mobile is experimenting with. You can see that the ad rate metrics are low. That means one needs to shoot for volume and bundle mobile advertising into other more traditional forms such as print. Is not only a good idea to bundle in newspaper advertising into your packages from a sales standpoint it is good for the advertiser.  I mean, how effective is a keyword and short code SMS/Text campaign if no one knows about it? In other words, “Build it and they won’t come!” An advertiser must promote the keyword and short code not only in the newspaper but in all other formats of advertising they invest in.

Mobile App Only

• $19.95 p/mo. - $239.40 advance pay – App only, unlimited coupons
• $29.95 p/mo. – month to month – App only, unlimited coupons

Mobile App and Text subscriber packages 

• $50 p/mo.-App package, up to 500  text subscribers, unlimited coupons
• $50 p/mo.-App package, up to 500  text subscribers, unlimited coupons
• $100 p/mo.-App package, up to 2500  text subscribers, unlimited coupons
• $250 p/mo.-App package, up to 10,000  text subscribers, unlimited coupons
• $500 p/mo.-App package, up to 25,000  text subscribers, unlimited coupons

7. What are the elements of success?

• Take this seriously! Get involved now.
• Partner with a third-party mobile advertising provider.
• Know that mobile advertising is more than making your newspaper content easily accessible on a mobile device. You need to consider advertising such as coupons and offers as content, rather than news as content in the space.
• Train, train, train. Equip your sales people with the knowledge and tools to do this effectively.
• Be patient and flexible. Remember this is a new line of business for you and your organization. Be sure to let all involved know that in year one this is a work in progress and mistakes will be made and you are fine-tuning your platform and sales approach as time goes on.
• Control the expectations of local advertisers. If you embark with an SMS/Text ad product let the advertiser know they may collect a hundred or so text subscribers in a month, not thousands.
• When positioning this to local advertisers, stress that fact that collecting a mobile database of people interested in their products and services should be important to them even though it may not be at this moment.

8. Can you give us some examples of ‘best practices’ in this arena?

From our mobile advertising test market tour we learned several best practices, such as;

• If your mobile advertising provider offers an app as well as SMS/Texting, like zip2save Mobile does, consider offering app only pricing to open up your service to potential advertisers. Not all advertisers need to collect a mobile database of phone numbers. For example, attorneys, which may be more of a one-time purchase for consumers, so depending on the practice a database for an attorney may not be productive.
• Bundle your mobile advertising offering with other forms of advertising such as print and online
• Control expectations of the advertiser. As mentioned previously local businesses are not going to collect thousands of SMS/Text subscribers in the first month. Let them know if they do this correctly their SMS/Text subscriber database will be built over time.
• Convince a local advertiser that building a mobile SMS/Text subscriber database is a smart thing to do.
• Partner with the local advertiser the first 3 months they sign on. Position it as follows: “The ad campaign we are showing you today values at $750 a month. It includes mobile, the ability for you to collect a mobile SMS/Text database, print advertising and online advertising. We are only going to charge $350 for the first 3 months. We want to help you build your database. Once the initial 3 month period is up our campaign will revert to full rate.” This says to the local advertiser that you are willing to partner and help grow their mobile SMS/Text database and hence their business.
• Hold their hand. Ensure that they are offering compelling offers and that the keyword and short code are always advertised in other forms of media. Make sure that they do not forget about the power of social networking on Facebook, Twitter, etc. Also make sure they use their email database to promote the offer or to join the text base loyalty club. A lot of hand holding is necessary in the first 3 months of any new campaign or one could lose that advertiser for lack of expectation control.

9. Final thoughts?

This is a fun space to be in! It is profitable and when managed correctly the renewals are easy. Advertisers see results -- people walk in with offers on their phones. It becomes tangible for the local advertiser. Additionally, it is a terrific way to reinvigorate print advertising with a local business. Furthermore, newspapers need to position themselves as digital marketing agencies helping local businesses not only brand but provide true lead-generation ad products.

Lastly, you need to remind local businesses that collecting a database of people interested in their product or service is not a new thing. Local businesses have been collecting information on customers for decades. It’s just that now we have a way for them to not only do this but most importantly provide tools and technology for businesses to do monetize their database to help grow their business.