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 Backfence.com 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 Sidewalk.com, 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 BargainBabe.com, 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 BargainBabe.com, which helps people save money on everyday expenses. She just launched a second site, BargainBabeLA.com, 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 BargainBabe.com.

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?

Maybe.

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

May 28, 2009

In search of an inner entrepreneur

Here are five steps to finding and cultivating potential entrepreneurs in your newsroom. Step 1: If you’re the boss, recognize that it’s not you.

KDMC’s News Entrepreneur Boot Camp focused on journalists who want to start news and information businesses, for the most part one-person bands at least initially. As I noted earlier this week, journalists can indeed be entrepreneurs. The follow up question: Can traditional news organizations support entrepreneurs in their midst?

Here are five things that will help that happen:

1. Recognize that top bosses are not likely to be entrepreneurs, as worthy a goal as that may be. An executive can be entrepreneurial, and the job entails many of the same visioning and organizing roles that the entrepreneur must play. But the executive is unlikely to be in a position to assume the significant risks of entrepreneurship, especially if the she is heavily involved in the day-to-day operations of the organization, as many editors now are in their newsrooms.

2. Identify the entrepreneurs in your midst. Here’s my favorite definition: “A risk-taker who has the skills and initiative to establish a business.” Look for the early adopter who is passionate about ideas, willing to buck conventional wisdom - perhaps even annoyingly so -  and has the commitment and discipline to see an idea through.

3. Dedicate time. Give the newsroom entrepreneur with a promising idea time to work on it. Schedule regular but not overly frequent check-ins (weekly). Be clear about timelines and expectations. As long as there’s sufficient progress and the premise is holding up, think of the effort as you would a potential Pulitzer-level investigation. No dawdling. But give it time to pay off.

4. Allow room for failure. Of course, not every idea will pay off. Most won’t. Recognize that you are investing in a learning curve as much as in a specific idea. The better and faster your inner entrepreneur can fail, the better and faster she will create the next big thing. So when something doesn’t work out, ask the entrepreneur what she learned rather than what went wrong.

5. Learn how to foster innovation in your organization. Create an atmosphere in which people support entrepreneurship and want to be part of it. Here’s a great list of tips to get you started.

I’m sure this list is incomplete. How can news executives foster entrepreneurs in their organizations? Please share your ideas in the comments.

May 26, 2009

Can journalists be entrepreneurs?

Knight Digital Media Center’s News Entrepreneur Boot Camp brings demonstrates that journalists have skills that will help them adapt to entrepreneurship. But the risk-averse culture of the profession also poses challenges.

Can journalists be entrepreneurs?
If last week’s KDMC News Entrepreneur Boot Camp is any indication, the answer is a resounding “Yes.”
The center brought together 15 journalists who are putting together news and information start ups for an intensive course of training and coaching in business, marketing and product development. There is no telling how many of their projects will succeed. But if willingness to march up a steep learning curve is a factor, these entrepreneurs should do well. (See Robert Niles’ ideas on the Boot Camp on the OJR blog.)

The sessions brought into relief some of the advantages that journalists bring to entrepreneurship along with a couple of drawbacks.
Here’s my short list (with apologies in advance for some broad generalizations).
Advantages:
1. Brains. Many journalists are smart and creative.
2. Persistence. Good journalists are persistent. The entrepreneur needs persistence, a lot of it. Virtually every entrepreneur who spoke to the Boot Camp mentioned at least one previous failed start up or years of wrenching twists and turns on the road to success.
3. Networks. Journalists may be able to tap into a wide array of useful contacts. Shoba Purushothaman, Chairman and Co-Founder of The NewsMarket, said that losing touch with her sources when she left journalism for business was one of her biggest mistakes.  “We don’t recognize the power of the network,” Purushothaman told the fellows, “Network, and network outside your own sector.”

Disadvantages
1. Traditional thinking. Journalists tend to have trouble thinking outside the box of journalistic convention (the rules, not the princples, as Geneva Overholser recently pointed out).  Either way, the tried-and-true holds most journalists in a firm grip and, as we have seen in the news business, perfecting the familiar gets more attention than re-inventing the model. Breaking away from that grip requires a willingness to take risks, something that is not well developed in the culture of a typical news organization.

It’s especially challenging because no one knows what the new box or boxes are going to look like. Discussing the business model for news, media analyst Ken Doctor told the fellows: “We have some idea of the elements that are going to be part of it. We don’t know the proportions of each or how they’re going to fit together. ... It’s an ecosystem that we can’t see yet because it doesn’t exist.”

Another piece of traditional thinking is the idea that only newspaper newsrooms as we have known them can deliver good journalism. Most of the new ventures will start very small and build on success.

2. Business phobia. Journalists are squeamish about business. The attitude that news and information is a public good for which people should pay will hold many would-be journo-preneurs back. They must recognize instead that the job is to create a service that will sell.

3. Math phobia. Journalists are math-challenged and that weakness will cost them in entrepreneurial roles. As Doctor said: “A problem we have here is that if we don’t do math, other people do it for us.”

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ABOUT THIS BLOG

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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