News Leadership 3.0

September 07, 2009

Growthspur: Help for revenue-challenged journalists?

In a guest post, news entrepreneur Michael McCarthy takes a look at Mark Potts’ new effort to help small local sites and blogs be financially sustainable

Michael McCarthy is editor of Seattle/LocalHealthGuide, which covers health care issues in Washington. McCarthy is a KDMC news entrepreneur fellow this year. I asked him to post occasionally on what he’s learning as he works to make his site a going concern.

By Michael McCarthy

Recently, an advertiser called me and asked if she could advertise on my site. And, frankly, I didn’t really know what to say. Since I launched 10 months ago, I’ve been concentrating on creating content, establishing credibility, and building traffic. My plan was to go to advertisers when my monthly uniques hit 20,000, which it should do this month. But right now, I don’t even have a rate card.
Pathetic, I know.
So I may well be the ideal customer for the services of a new company called Growthspur, which was launched a few weeks ago. The company aims to make small local sites and blogs financially sustainable by providing training, tools, and a network that will allow them to sell ads and develop other revenue streams.
“Ad sales is not your area of expertise,” Mark Potts, Growthspur’s CEO, said diplomatically in a phone interview, “you’re a journalist, you know how to be a journalist, and you’ve stayed away from that dirty side of the business that was ad sales.”
“But now you’ve to learn about it if you want stay alive. And you’ve got to know about ad serving, you’ve got to know about coupon technology, mobile technology, analytics.”
This, I’m afraid, is true.
Pott has put together a team with considerable experience in developing Web sites, in particular local sites.
* Potts, Growthspur’s CEO, was co-founder of Washington Post Digital and and is now a consultant who blogs at Recovering Journalist.
* Dave Chase is a former marketing and management executive at Microsoft including its early local effort, and now a partner at the consulting firm Altus Alliance and owner and publisher of the local news site SunValleyOnline. (Chase is also a contributor to the Knight Digital Media Center’s Online Journalism Review.)
* Tom Davidson, who advises start-ups and academic institutions on digital strategies and a former VP, Tribune Interactive, became a program consultant for the Knight Center for Specialized Journalism this summer.
* Mel Taylor is a Web ad sales consultant and trainer, who develops online revenue strategies for broadcast, print and online-only publishers.
There is a wealth of news content being produced by small local sites, Potts said. “Any good-sized city you could mention now has 20, 30, or 40 interesting blogs covering everything from sports to parenting to personal injury law” but most are struggling to survive. Many new media journalists have “have plunged in without fully realizing what it takes to do it on a sustainable basis,” Potts said. “And that’s the opportunity we’ve identified.”
Pott believes there are local advertisers who want to reach the local audiences these sites attract and he estimates that a well-run local site in a mid-sized city should be able to bring in more than $100,000 a year in revenue from advertising, e-commerce and other sources.
The challenge is to bring these advertisers and Web sites together.
Growthspur will provide the training, tools, and networks that will make that possible, Potts says.
The training will include an operational manual, a “cookbook that explains everything you need to know about monetizing a site,” Potts said, and seminars “to teach people what it is to sell ads, how you identify prospects, how you develop your rate card.”
Growthspur will also provide access to an advertiser-management platform and other tools, such as applications that allow advertisers to create and place their own ads automatically, greatly reducing the cost of ad production for the Web publisher.
Finally, Growthspur will develop metro-wide Web networks creating a one-stop shop, where advertisers can easily buy ad space across the network’s sites with one transaction.
While one local site might have relatively few visitors, a network of sites could provide the kind of exposure many advertisers would be happy to pay for, Potts said.
And what will Growthspur charge for its services? That’s yet to be determined, says Potts, but it will be based on a percentage of the Web sites’ ad sales and there’ll be no up-front charges.
“Our belief is if we can significantly increase their revenue, they’ll feel our service fee is very well justified,” says Potts.

August 06, 2009

Entrepreneurship 101: Making money as a blogger

In a guest post, entrepreneurial journalist Julia Scott of, asks seven questions bloggers need to ask themselves when they decide to pursue revenue

Julia Scott is an entrepreneurial journalist, professional speaker, and blogger at, which helps people save money on everyday expenses. She just launched a second site,, which helps Angelenos save money using Google maps. Scott was a fellow in Knight Digital Media Center’s News Entrepreneur Boot Camp in May and I’ve asked her to write an occasional guest post about her adventures in creating

By Julia Scott

The first question I get when I tell people I am a professional blogger is, how to you make money?

More and more journalists are grappling with this question as news gathering professionals leave mainstream news organizations and start their own blogs and websites. But the question we should ask is, are niche sites viable?


In theory, niche news websites make money by cultivating an audience that is the polar opposite of a typical newspaper audience. Newspapers offer advertisers volume, while niche sites offer passion. That means niche sites have fewer potential advertisers, but they deliver access to a highly targeted audience, which advertisers, in theory, will pay more to reach. Advertising is not the only money-maker, but it is one of the easiest ways to produce revenue.

In practice, the viability of a niche site starts with these seven factors.

1. How do you define profitability?
If you have a lavish lifestyle or are used to six-figure, old media salaries, your expectations may not jive with the reality of online sites.

2. How big is your audience? Even niche sites need a critical mass of readers. At the minimum, you need a few thousand eyeballs daily to be taken seriously.

3.  How passionate is your audience?
Comments, bounce rates, forum posts, average time spent on your site, and tips gauge how passionate your readers are about your site. The more involved they are in your site, the better off you are.

4. How commercial is your subject?
A site devoted to knitting will never have the advertising potential of one devoted to shopping. Subject matter is particularly important to journalists who cover weighty subjects that get little traction with the public. Advertising revenue may not be a reliable source of income for some sites, which need to be even more creative about revenue streams.

5. How creative are you with your revenue streams? Diversity is not just good, it’s crucial. In addition to multiple types of ads consider white papers, speaking gigs, sponsors, books, donations, events, freelancing, syndication, email lists, membership drives, and product referrals. Don’t bank on paid subscribers.

6. How much time does the job take?
Are you able to keep your site fresh and your audience happy in 4 hours a day? 16 hours? Is your site popular enough that aspiring writers will share content for free? Are you technically savvy enough to do basic maintenance? Do you have friends or family to help with technical meltdowns and crises?

7. Is the site your main gig or a side gig?
Having time to build up your site while not needing it to pay your bills is ideal. On the other hand, being under the gun to make it work provides motivation.

There are no black and white answers to these questions, but answering them is a good start to figuring out whether your niche site can be viable.

More guest posts by Julia Scott:
Entrepreneurship 101: Use the free stuff
A news entrepreneur lives her obsession and makes it pay

June 29, 2009

At, an advertising experiment

The Minneapolis online news start up brings a Twitter sensibility to serve small, local advertisers

As Paul Gillin pointed out, local news organizations can do much more to serve small local advertisers—a $24 billion market nationwide. So it’s exciting to see experimenting with a new service that enables small local advertisers to post short feeds on all pages of the Minneapolis news site for a modest weekly fee.

Here’s how Kramer describes the goal of the service, Real-Time Ads, in his blog:

Very simply, our goal is to create a fast-paced marketplace, full of advertisers’ messages that are newly posted and thus up-to-date, so that readers will want to keep coming back to check out what’s happening.

Imagine a restaurant that can post its daily lunch special in the morning and then its dinner special in the afternoon. Or a sports team that can keep you up-to-date on its games and other team news. Or a store that could offer a coupon good only for today. Or a performance venue that can let you know whether tickets are available for tonight. Or a publisher or blogger who gives you his or her latest headline.

Real-Time Ads looks like it offers a few things that have often been missing from the advertising portfolios of news organizations:

- It’s easy to post. Anyone who is already sending out promotional messages on Twitter or via RSS can push them out on MinnPost.
- It’s cheap. The service is free during a four-week beta test. After that, MinnPost Editor Joel Kramer expects to charge each advertiser under $100 a week for the service.
- It likely will not require a great deal of labor on the part of the news organization if it catches on.

Kramer notes that other sites are trying similar models, including Chicago’s news

The service is very Twitter-like, with the most recent ad appearing at the top of the list. It does not look like it will lend itself to comparison shopping the way a good online classified service might.

Still, it’s a promising piece of the advertising puzzle. Perhaps most importantly, the service recognizes that small is the new big. Local news organizations are unlikely to a return of anything remotely resembling the traditional advertising portfolio dominated by relatively few very large accounts. Instead, news organizations must build portfolios of small local accounts and give them diverse ways of reaching the public.

Bill Mitchell at Poynter Online discusses Real-Time Ads and Zachary Seward has a video interview with Kramer at the Nieman Journalism Lab.

Do you think this model would work for your site? How are you capturing local advertising dollars online?

June 17, 2009

A new revenue agenda for news organizations

Paul Gillin urges news organizations to re-invent their business model by becoming more service-oriented, seeking more small, local advertising accounts, and changing the game on Craigslist

Paul Gillin provided a hopeful - and challenging - revenue agenda for money-starved news organizations during his KDMC/NewsU Webinar “New Revenue for News Organizations.”

It is hopeful because Gillin believes local news organizations can use their local ties and expertise to serve residents and businesses and get paid for services.

It is challenging because news organizations must first give up the notion that advertising will come back in a big way or that they can charge for non-specialized content that’s available for free.

People who ask how to monetize their Web sites need to change their approach, he said. “Your opportunity really is monetizing your audience, monetizing your brand.”

Here’s a pdf of Paul’s presentation slides. A replay of his presentation, including audio, will be posted at NewsU by the end of the week and I will add the link to this post. UPDATE: Webinar replay ($24.95 at NewsU).

Focus advertising efforts on small, local accounts

The advertising market has become more efficient with the Internet and institutions that relied on inefficient mass advertising are hurting because of that.

“The advertising world will never be the same again,” Gillin said. “The question is not ‘How do we get it back?’ It’s not coming back. The question is how do we change the model?”

News organizations can better serve a $25 billion local advertising market that relies heavily on primitive means such as Yellow Pages advertising, signage and fliers. “Whole classes of business are not now effectively reaching their customers and need help in advertising more efficiently,” Gillin said.

“You’ve got to change your sales model away from large national contracts towards much smaller but more numerous local contracts. I’m not saying this is easy but this is where the opportunity appears to be right now.”

Do more than Craigslist with classifieds

Gillin cited the work of Reinventing Classifieds, saying news organizations cannot beat Craigslist at its game, but it can reinvent classifieds to provide more services than Craigslist.

For example, Craigslist does not enable users to compare offerings side by side or to rate products. It also doesn’t offer customers advice on effective advertising and marketing.

“Craigslist is not the be all and end all of classified advertising. I think there’s a lot Craigslist doesn’t do very well. So you can tap into classified with an eye to Craigslist’s weaknesses.”

Diversify the revenue stream by taking a service approach

Gillin says opportunity also lies in developing relationships with local consumers and businesses and figuring out how to save them time and money.

That might mean helping businesses organize and market events to sell their products, facilitating transactions (such as ticket sales) in exchange for a cut of the transaction, developing databases that save users time and money when they make consumer decisions such as buying a house in the local market.

News organizations also might offer memberships that entitle members special access to events and services.

If consumers are unlikely to pay for comment, they will pay for value-added information, Gillin said. That’s why the Wall Street Journal, Consumer Reports and Cooks Illustrated can charge - they save people significant time, energy and cost to research issues that are important to them.
Consumers will only pay for content with a “high level of perceived value.  You can’t sell subscriptions to a commodity” that is widely available and often free.

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Exploring innovation, transformation and leadership in a new ecosystem of news, by journalist and change advocate Michele McLellan.

Get in touch with Michele at .(JavaScript must be enabled to view this email address).

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