NBC, Nexstar Invest Heavily In Station Web Sites

by David Goetzl, Mar 28, 2008, 8:00 AM

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How eager are local station owners to accelerate their Web extensions? NBC Universal could nearly double its digital sales force, while an outsized portion of executive bonuses at Nexstar Broadcasting are derived from online performance.

John Wallace, who oversees NBCU's 10 owned-and-operated stations, said Thursday that the company's 2008 business plan calls for hiring 30 additional sales executives devoted solely to selling the Web sites affiliated with the channels. Currently, NBCU has no more than 40 spread across the 10 markets, with Wallace saying no single station has more than four.

Wallace indicated, however, that he was unsure whether NBCU would fill all the allotted spots because of what he termed a "recruitment" issue. Nonetheless, he said the need to add staff is pressing, since executives selling on-air spots could face an unmanageable workload if they are taxed with double duty. Furthermore, the Web is a medium with different nuances, metrics and other characteristics that require "specialization."

"We absolutely know that our sales team can't be expected to sell both effectively," he said at the Television Bureau of Advertising's annual marketing conference.

At Nexstar (which operates 50 stations in 29 mid-size markets), Chairman-CEO Perry Sook said that although Web revenues last year accounted for about 2% of revenues, 25% of the bonus compensation that station general managers receive is predicated on how their stations do online. Sook--who joined Wallace on a panel at the TVB event--said that although that's disproportionate, it's a signal of how much emphasis the company is placing on rapidly expanding its Web operations.

Sook said that ultimately, Nexstar is looking to turn itself into a multi-platform "advertising services business," not just a broadcaster.

Nexstar reported $266.8 million in net revenues last year, with $5.1 million in new media. Sook said he expects the 2% from online to double to 4% this year. One reason: a third of the political dollars Nexstar takes in could come from the Web.

Wallace, president of the NBC Local Media Division, said that his unit derives about 2.5% of revenues from digital sales, which he hopes can grow to 5% in 2009. But, he added, that requires "investment, whether it's in people or capacity."

NBCU recently said it would sell its Miami and Hartford stations, partly to raise those types of expansion funds. It would still have stations in seven of the top 10 markets.

(NBCU recently acquired LX.tv, a producer of lifestyle programming that can run on the Web and elsewhere.)

The need to bolster revenues for station groups via the Web and other off-air initiatives (out-of-home platforms are an example in NBCU's case) is accelerating, with growth in the traditional station business slowing. "We're feeling it right now, certainly on the broadcast side," Wallace said.

"Broadcasters are at the point now that they absolutely need to dive into (new digital opportunities), not dabble," he added. (Wallace's division does not include the NBCU-owned Telemundo stations.)

While NBCU has focused on turning its recognizable on-air monikers (KNBC in Los Angeles, NBC 10 in Philadelphia) into multi-platform brands, Nexstar has sought to establish separate Web footprints. For instance, the site linked with its NBC affiliate in Little Rock is ArkansasMatters.com, while the ABC outlet in Odessa-Midland, Texas is PermianBasin360.com.

Neither home page carries prominent identifiers "above the fold" of either the station or network brand. It's part of what Sook said is a strategy to establish community hubs, rather than limited station extensions.

NBCU is, however, dipping its toe into that realm with the recent launch of DigPhilly.com, a lifestyle site in Philadelphia with no visible link to WCAU.

Wallace said the site could serve as a template for other markets. "We've built a platform, so it's scalable," he said.

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