News Leadership 3.0

Posts tagged with: Revenue

September 13, 2011

Patch by the numbers 2: Advertising

By Anna Tarkov
When it comes to advertising, the four Patch sites I reviewed in August all relied heavily on national advertising, while three were also attracting a significant amount of local ads. Patch local business directories also figure in the revenue mix.

Last week we took a look at Patch’s content and audience engagement. Now it’s time to talk turkey, as the old expression goes. In other words, show us the money. After all, content and everything else will be for naught if Patch can’t financially sustain itself. Since Patch content is online only and is free to read for all visitors, revenue comes solely from advertising. Though, as we’ll see, that can take different forms.

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As with content, my approach was to take note of the ads that appeared on portions of four different Patch sites. A California site (Hermosa Beach; launched 3/8/2010), a New York site (Rye; launched 12/22/2009), Florida site (Brandon, launched 12/15/2010) and a Midwest site (Northbrook; launched 9/9/2010).  (Note: I reside in Northbrook.)

I defined “Local” as an advertiser actually in the town that the Patch site covers; “Metro” as an advertiser a nearby town or in the general metropolitan area. National advertisers are national companies. Patch includes house ads promoting advertising on Patch or Patch daily deals. (More on methodology at the end of this post.)

It’s important to note that this was a scan of only four Patch sites out of a network of 861. So draw your conclusions if you must, but do it carefully.

What does Patch offer advertisers?

At first glance, when looking at a Patch site page like this one, it might seem like display ads are the only thing on the menu for advertisers. After talking to Patch President Warren Webster, I discovered that Patch offers more.

Most of the other products have to do with the directory of local businesses, schools and other neighborhood spots that each Patch site has. With its obvious importance to the bottom line, the directory is prominently featured as one of the top level categories on each site (here’s an example).

Webster billed these directories as a vital resource for the community as well as to area businesses. He also stressed that they aren’t purchased from a third party, but hand-built. Webster said that every business or place listed has been visited in person by a Patch staffer and all information such as hours, parking, etc. has been verified. Photos of the business are also taken and in the end, it looks something like this.

Patch hopes to make money on these directories by having businesses claim the listings Patch has created for them. Claiming one’s listing doesn’t technically cost anything. But once a business claims its listing, Patch will pitch the idea of producing a video commercial to appear in the listing like this one, putting the listing on different areas of the site, adding a message from the owner, being added to the Patch directories of neighboring towns and very likely buying display advertising. For many of these local businesses, it will be their first foray into having a web presence and that’s just what Patch is banking on.

How is the sales operation faring?

As with traffic stats, Patch will not release numbers on how it is faring in selling their various ad products or how much they are charging for them. A leaked ad rate card appeared in July, but a Patch spokesperson would neither confirm nor deny its accuracy.

Webster predictably dismissed the disgruntled Patch salesperson who is quoted in the link above. “It’s easy to dig up the people who aren’t happy or they weren’t the right fit,” he said. He went on to add that he considers the person an outlier within the Patch sales organization and not representative of other employees. In other communications with Patch spokespeople, it was hinted to me that the person had already been slated to be fired. Again, there is no way to confirm or deny this claim.

I tried to get a sense of the general satisfaction of Patch sales staff by asking Webster what the degree of turnover is among sales reps. He asserted that it is on par with every other sales organization he has seen and that as it naturally happens, some people are a good fit while others are not. Nevertheless, he seemed to acknowledge possible challenges by citing Patch’s fast pace of growth over the course of the last year. While Webster didn’t link this directly to any specific problems, it’s not difficult to imagine that it may be difficult to effectively oversee an ever growing sales staff.

So how many people are we talking about?  The ad sales arm of Patch employs nearly 300 people. Each individual sales rep is responsible for covering a cluster of sites based on things like population and number of businesses in the area. That means the number of sites per sales rep can somewhat vary, but Webster said it ends up being 3-4 sites on average.

Are advertisers happy?

Answering this question is almost as difficult as trying to determine whether Patch is making money on its ad sales.

Advertisers haven’t been extensively sought out for comment so there are few independent accounts to go on. Business Insider cited one Patch advertiser who hadn’t yet seen big gains in his business, but was optimistic.

Meanwhile, optimism is available in abundance on Patch Sales’ YouTube channel, which features video after video of blissfully happy advertisers. All of them state that their business is up as a result of advertising on Patch.  It’s a convenient echoing of what Webster said when we spoke. “Our goal is to get customers in the door,” he stated and according to these video testimonials at least, it’s happening. How many current or former Patch advertisers might not share this view? There’s obviously no YouTube channel for that.

What there seems to be no doubt about is Patch’s dedication to advertisers and local businesses in general. Sure, readers need to be happy too, but it’s clear no one is forgetting who foots the bill. “We want to make the community stronger and we see businesses as a crucial part of that,” Webster explained. He then took it a step further when discussing whether Patch is developing long-term relationships with advertisers and spelled out the commitment to businesses in no uncertain terms: “We see the advertisers’ info as being just as important as the news.”

Truly local?

Some of the criticism laid at Patch’s feet has been that its sites aren’t truly local; that they are “local lite” if you will. For instance, a group of independent online local news publishers call themselves Authentically Local; the implication of course is that companies like Patch are neither one nor the other.

Where ads are concerned, independent publishers like Howard Owens (whose site is listed on Authentically Local as one of the founders) have stressed that they must be local and local only:

“Do you accept only locally owned businesses as advertisers? If you don’t, you should. You should make it part of your publicly known mission that your goal is to help locally owned businesses grow….  If your site currently has ad network ads, including Google AdWords, you need to remove that code from you site right now.  If you’re going to be beat Patch, you need to be all about local and only local.  And beat that drum as loudly and as often as you can.”

With that in mind, I asked Webster whether Patch was striving for a certain amount of local versus national ads on its sites. The answer seemed to be yes and no. “We don’t have a specific mix in mind, but we ideally want half or the majority of our advertising to come from the local community,” he said.

Looking at the four sites I surveyed, we can see that this goal is somewhat being met. If we only look at the local ad percentages (again, they are 0%, 20%, 34% and 43%) then the 50% mark certainly looks distant. However, if we consider both local and metro ads to be “local,” then the picture improves a bit and we would now see percentages of 41%, 56% and 49% on the three sites that have local ads (Note: I am uncertain why I saw no local ads on the Hermosa Beach site as its launch date is not the earliest of the four. There could of course be any number of explanations.)

By the way, I did ask Webster if he was aware of Authentically Local and how he felt about independent news sites in general.

Taking a conciliatory tone, Webster said that Patch didn’t begrudge any of their companions in the local news space. “We want them to succeed,” he went as far as to say, though it’s unclear whether Patch’s definition of success would match that of the indie site operators’.  “We look at everyone trying to solve this [local] problem as a partner. We may just be taking a different approach. We believe that we can serve our markets better by having a large organization behind it while still having the site run by an editor who lives and works in the town. I think there’s room for all of us to help figure out what the model will eventually be that works for local news.”

Independent publishers weigh in

To get an idea of how the ad numbers I collected looked to people who had experience selling such ads, I turned to some independent publishers.
Mike Fourcher of the Center Square Journal and other community sites in Chicago neighborhoods remarked that the Patch rate card seemed incredibly expensive in comparison with his. He wasn’t sure how Patch’s financial picture would work if the numbers I collected were in line with other Patch sites. For example, Fourcher charges $500 (corrected from $400) per month for his best ad placement, a left sidebar on the front page. The most closely comparable Patch placement runs $1,200 per month, a huge difference indeed.

The aforementioned Howard Owens, publisher of The Batavian, was unsure if the numbers showed any strategic vision on Patch’s part far as ad sales were concerned. “To build an advertising business you need to know what you want to accomplish, which is more than ‘sell a lot of ads’ or ‘become profitable’—those are by-products of solid strategic business goals, not the goals themselves,” Owens said.  He also sharply questioned the selling of national ads alongside local ones and asserted that one is not compatible with the other. “They’re trying to serve two masters—one that is entirely metric driven and another that is much more about relationships and the contextual environment.”

Methodology

As with my earlier post on Patch’s content, I studied ads on the four sites I tracked on four weekdays each in August. I counted ads on the homepage, the other top-level categories that have ads on their main pages (News, Events, Places, Marketplace, Q&A) and also the Local Voices and Announcements sections under the News heading.
Since each viewing of a given page doesn’t necessarily display the same ads each time, I refreshed each page I looked at five times. If an ad appeared on more than one refresh, it was only counted once. However, ads for the same advertiser appearing on more than one category page were counted separately each time.

If you have a question about the methodology or anything else is unclear, please feel free to leave a comment and I’ll be happy to address it.

Previously: Patch by the numbers 1: Content

Anna Tarkov is a blogger and journalist obsessed with media and politics and especially passionate about reforming the news business. Find Anna on her blog and on Twitter.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

January 12, 2012

At local online Cary Citizen, multiple revenue streams create profits

By Julia Scott
One secret behind the profitable local news site Cary Citizen is that none of the four founders has a journalism background. But what they lack in news sense they make up for in business acumen.

imageInstead of launching a solo online news site, the foursome, including KDMC Boot Camp alum Lindsey Chester, added Cary Citizen to an array of thriving revenue streams.

As the most visible arm, Cary Citizen has become a digital calling card for its parent company, Goodtree & Co.

“When we’re selling people [website services], we can show the best of what we do and how effective it is,” Chester said during a phone interview.

The pairing of a news site with website design services is what makes Cary Citizen viable. image

Because of its news content, Cary Citizen shows up high in search engines, getting 36-54% of its traffic from organic searches. Once on the site, links to its business services are prominent.

Would a clickity-clack journalist create such a wide range of revenue streams, let alone boldly promote them? I haven’t seen it.

Cary Citizen publishes two dozen stories a week, certifiably light news items, including upcoming events, business listings, and job opportunities in Cary, an affluent suburb of Raleigh, N.C. The site was founded in July 2009. A print edition is not a priority, partly because of cost and partly because it won’t necessarily drive traffic online.

“What we think we’d rather do is get out to community events and create awareness,” Chester said.

One unusual way the site has gained awareness - and made money - is by hosting the annual Cary Scavenger Hunt. The second annual hunt in July drew 133 scavengers and 30 sponsors, despite 103 degrees of heat. The event represents 16% of the company’s revenue.

Here’s a breakdown of Cary Citizen’s revenue streams:

     
  • Website creation and design - 55%
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  • Banner ads and advertising - 25%
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  • Annual scavenger hunt - 16%
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  • Photography services - 4%
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  • Hiring out bloggers - less than 1%

Chester said the lesson of diversification was the big takeaway from an interview to get into KDMC’s Boot Camp. “Don’t be just that website because you’re not going to make enough money from that,” she said. “You have to have several irons in the fire.”

Cary Citizen supports three full-time employees, including Chester, associate publisher; Hal Goodtree, publisher; and Leslie Huffman, editor at large. Everyone else is paid as a contractor, if they are paid at all. Cary Citizen relies on more than 20 volunteers, including seven photographers.

Cary Citizen has been profitable from year one, supported by the existing revenue streams under the Goodtree & Company umbrella.

Cary Citizen gets about 1,000 hits a day and 26,000 to 30,000 unique visitors a month, Chester said. The site has 1,400 Facebook fans, 530 Twitter followers, and 800 email subscribers.

Long term, the team hopes to take the business model to other markets.

Julia Scott writes the money-saving blog, BargainBabe.com. She is an alumna of KDMC’s 2009 News Entrepreneur Boot Camp.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

February 24, 2012

A few lessons for foundations as the Chicago News Coop hits the pause button

Chicago News Coop, a two-year old nonprofit news site, has announced it is suspending publication Sunday and reevaluating its future.

While some of the factors in play are complex and not particularly well explained by the CNC (read editor James O’Shea’s letter to readers), what we know so far about the suspension does appear to put into focus some key lessons for funders who are stepping up and into the news and information space:

Lesson One: Demand a significant focus on revenue development from day one.

Funders need to insist on a business development plan as a condition of funding and set aggressive benchmarks for progress in diversifying revenue. Make sure business development is in the budget and a development expert is retained.

One rule of thumb is that a news site should be spending equal amounts on content and on revenue development. Many journalist-led sites are skewed heavily toward spending on content.

But that is changing across the field. MinnPost and The Texas Tribune, for example, are among those that have invested heavily in revenue development and are showing results.

In his letter, O’Shea said the “CNC never raised the resources to make investments in the business side of our operation that would have generated the revenue we needed to achieve our original goal - a self-sustaining news operation within 5 years.”

That’s a choice. With over $1 million investment from the MacArthur Foundation alone, certainly CNC had the option of investing more in revenue development and less in content.

Lesson Two: Experiment with revenue diversification.

News startups do need a runway of at least several years to stabilize and foundation support is critical in the early going.

But they must also expect to create multiple revenue streams that enable a reduction of foundation funding.

Donors large and small are one source. Sites that are successful in engaging their communities in ways that include and go beyond traditional journalism may have an edge in raising donations. That seems to be the case for the St. Louis Beacon.

Don’t overlook earned revenue. New Jersey Spotlight, also about two years old, focuses public affairs reporting in state government. It is raising nearly a third of its $600,000 annual budget from earned sources - mostly by staging conferences about important topics it covers—according to Hans Dekker, CEO of the Community Foundation of New Jersey. Unlike the News Coop, this site is not a nonprofit. It is an LLC owned by the foundation, and Dekker says that helps underscore the importance of it acting like a business.

That foundation, with matching funds from the Knight Community Information Challenge, provided seed funding. And the New Jersey foundation has insisted from the outset that the staff focus on revenue.

Dekker is quick to note that the Spotlight isn’t yet financially stable or sustainable. But its progress suggests one blueprint for other public affairs journalism sites.

Getting Local,” a recent report from the Knight Foundation (I co-authored it), underscores the need for sites to wean themselves from foundation funding.

“Most sites relied heavily on foundations or large donors or both to get started, but have since experimented, with varying degrees of success, with multiple revenue streams, including membership, advertising, events and sponsorships.”

In addition to its foundation funding, the CNC was deriving revenue from a content partnership with The New York Times. On Monday and again on Thursday, I asked O’Shea how much revenue derived from that and other sources but I did not receive a response.

It is safe to say the content partnership is a small amount - The Texas Tribune and The Bay Citizen have similar agreements and they reported less than one percent of total revenue from the Times in 2010.

Lesson 3: Understand that failed experiments have value and require documentation.

The McArthur Foundation stepped up in a big way to support CNC and I commend that.

We all knew a lot less about what would work just a few years ago, when McArthur and other foundations decided to place big bets on experiments in public service journalism.

Even when individual projects don’t succeed, we learn more about what won’t work and what might. That’s an important contribution to the field. Making detailed documentation a grant requirement may be in order.

MacArthur has been a significant funder of journalism and it may well have imposed some of the requirements I suggest here in funding the CNC.

Despite CNC’s problems, Elspeth Revere, Vice President, Media, Culture, and Special Initiatives at MacArthur says the foundation “is committed to continuing our 30-year history of support for non-profit journalism because informing the American public matters as much now as it ever has.”

Another factor for the CNC was questions about its status as a 501c3 nonprofit institution. The IRS has been scrutinizing applications for nonprofit status for some news start ups.

O’Shea cited this factor in his letter to readers but did not explain it.

“The decision to suspend operations was motivated by some complex factors and unresolved questions regarding our tax status and a change in circumstances that triggered questions about the economic wisdom of commitments between the CNC and the New York Times. Frankly, the situation is too complex to discuss in any detail in a note like this,” he said.

Be that as it may, the tax status problem and any issue with the content partnership may simply have precipitated the inevitable.

A two-year-old site that is still highly dependent on a single funder probably isn’t destined to grow legs and march into sustainability.

It’s important to remember that the start up sector has a high failure rate - the demise or downsizing of a site does not mean the broader field is failing. The timing could be poor. It might be the wrong market, it might be a failure of execution rather than of an idea. It helps the field comes when failure is turned into learning.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

March 14, 2012

Public interest news start ups: Few answers but the right questions are coming into focus

In experimentation with online public service journalism, there are few set answers about how news providers can be sustained. But a new report from the Investigative News Network goes a long way in detailing what we have learned and in defining the questions that start ups - and funders - need to ask as they shape and launch their ventures.

Audience Development and Distribution Strategies,” is a rich source of information about engagement, distribution and revenue tactics of INN member sites. (Read the section titled “What will you find? on pages 9-10 of the pdf for a summary.)

The report describes a highly challenging environment: “Our movement has become a viable force in the production of independent reporting focused on the important stories that commercial media cannot. In fact, INN members are 100% focused on consistently producing this important and expensive content. That said, these are tough economic times and the models to support journalism - in both the commercial and nonprofit sectors - are in flux.”

Against the backdrop of flux, hundreds of news innovators are trying to figure out how to marry a mission of public service news and information with a business model. I encourage anyone who is operating, thinking of operating or considering funding a news start up to read this report. For a more general understanding of the landscape, I highlight these points:

- While foundations have contributed heavily to launching many of these experiments, continued foundation funding is far from likely, at least not in the amounts that will be needed to assure a robust public watchdog function. I think we may see increasing definition and understanding of what types of news operations the market will support - small, local, advertising based news sites, for example - and what types will need continued foundation support - probably the high-end investigative sites whose work generally is highly consistent with the work of foundations in driving civic improvement. image

- From the outset, it is critical to assess different revenue streams and funding models. The report describes four types of sites (Start-Up Shop, Topic Specialist, $ Million Plus, and Community Driven) and how they might tap into funding streams including distribution deals, donations, membership programs, education programs and advertising or underwriting. See pages 29-32 of the pdf. The graphic shows   how the “Community-Driven News” model starts, like most others, with heavy foundation support and then grows revenue from memberships and donations with smaller streams from underwriting and distribution deals. (I am very skeptical about the potential for significant revenue streams from membership for most sites, even in five years.)

- Data and topic expertise may pose revenue opportunities for news organizations. As well, organizations may be able to do a better job of packaging their content for wider distribution. “The next phase of report once, publish everywhere is optimizing your content for the right distribution channel. Whether that means localizing a national story to a region or creating a video presentation of a 3,000-word investigative piece, journalists need to become more willing to take charge of the packaging and bundling of their content for different channels.”

- People who are planning a site need to look beyond producing journalism, starting with an assessment of the marketplace. “You shouldn’t start one of these if you are just a journalist looking for a job,” one interviewee told the report’s authors. Steps include identifying stakeholders, defining audience and developing a value proposition. “In consulting with journalists looking to build new news organizations, we often try to pull back the lens, coax out the distractions of important stories and product features, and instead focus on the broader mission of the journalism they do and its desired impact,” the report states.

This report makes a significant contribution to understanding in a highly dynamic and confusing field. At the same time, it underscores a key challenge: There are numerous, highly diffuse models and missions being tested each with different implications for revenue strategy and tactics. My own list of promising news sites (currently off-line for a site rebuild) started two years ago with four admittedly broad categories of independent online start ups (New Traditional, Community, Micro and Niche) and I’m adding at least three more, including Investigative, as the field grows and becomes more diverse.

The report also offers sobering context about the fragility of any new ventures, including the emerging news organizations:

The explosion of nonprofit news sites bodes well for innovation in the industry. But it’s unlikely that all of these organizations will find a path to sustainability. For some perspective, approximately 75% of nonprofits registered in the United States fail in the first year. Although many reasons are cited, some of the most common include: * Lack of planning * Over-expansion * Poor management * Insufficient capital * Poor diversification of funding These factors are similar to new small businesses, 50% of which fail in the first five years, according to the U.S. Small Business Association.
This blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

April 24, 2012

Why the mobile web is slow, and your mobile site must be FAST!

By Amy Gahran

Take out your cell phone, look at it and count to nine. That’s just slightly less time than it takes the average web page to load on a mobile web browser over a U.S. wireless carrier’s data network. It feels painfully slow. And unfortunately, the widespread rollout of carriers’ faster “4G” networks probably won’t help that situation much.

Which means that if your news or community site isn’t optimized to load very quickly on cell phone web browsers, and be easy and fast for mobile users to navigate, you’re facing a major and growing disadvantage to building your digital audience and business…

For lots of reasons, a mobile-optimized website should form the core of any news or community site’s mobile presence. Even NPR recommends that in order to grow their mobile audience, news sites should focus resources on the mobile web, rather than on building platform-specific mobile apps.

Last week Olga Kharif of Bloomberg reported that “twice as many mobile-phone users abandon a website for reasons such as sluggishness than their desktop counterparts.”

The Bloomberg article was focused mostly on e-commerce sites, which lose sales when mobile users get frustrated and leave. However, the same principle can apply to any type of website.

According to Kharif, the typical webpage currently takes 9.2 seconds to load on a mobile browser over a U.S. carrier’s data network. (Wifi load times are usually faster, but carrier networks are far more ubiquitous than wifi connections.) Also, “Almost half of mobile users are unlikely to return to a website at all if they had trouble accessing it from their phone.”

Kharif reported on new efforts by Google, Microsoft, Akamai Technologies, and other major internet companies to improve mobile web browsers, offer new mobile performance optimization tools for website owners, and to change how some basic internet technologies function.

Google’s goal is to make the overall mobile web experience twice as fast as it is today.

...OK, take out your cell phone again, look at it, and count to four-and-a-half. That’s better—but compared to the desktop experience it still feels a bit long to wait for a webpage to load.

Why is the mobile web so slow? Sometimes it’s a combination of where the mobile user is and how strong or congested the carriers’ network is in that location. But the servers where websites resides, browser technology, and other internet software also play a role in slowing down the mobile web experience, despite faster carrier networks. All of this is beyond the control of web publishers.

But Kharif notes: “Often it’s because the webpage wasn’t designed to load quickly on a wireless device.”

That’s where news and community site owners can take action to turn mobile media to their advantage.

Where’s your mobile site?

Many news and community sites lack a simple mobile-optimized layout. Instead, they display a miniature version of the full website in the mobile browser—which then requires more time and effort to pinch, zoom, and scroll merely to see what’s on the page.

For instance, the Bay Citizen (a nonprofit, well-staffed local news site in the San Francisco Bay Area that has attracted millions of dollars in funding) apparently lacks a mobile-optimized version. Try loading BayCitizen.org in your phone’s web browser and see what happens. (Note: On Apr. 25 The Bay Citizen tweeted: “We’re working on a mobile site as we speak!” Stay tuned.)

For contrast, try loading MinnPost.com (a smaller nonprofit news site) in your phone’s browser. That’s how a mobile-optimized site can look and perform. See the difference?

I’ve heard some smaller digital news publishers say they don’t offer a mobile-optimized layout for revenue reasons: the ads they run on their full site won’t display well or at all in a single-column layout on a small touchscreen.

Meanwhile, I’ve noticed that the mobile versions of mainstream daily news sites often offer few ads, and these are generally supplied through mobile ad networks—which typically provide relatively lower quality, less relevant ads and less revenue per ad. This, combined with a “shovelware” approach to the mobile web (which replicates the worst digital missteps of the news business from the 1990s), signals to users and advertisers alike that the mobile site is a less-valued, lower-priority product.

That’s just plain bad for business.

However, since mobile devices are fast becoming the most common way for people to access the internet in the U.S., failing to figure out how to place and sell relevant mobile-optimized ads because you believe this might undercut the ads on your desktop site seems shortsighted, to say the least.

So far, many news publishers have developed mobile apps which deliver ads as well as content. Since apps store many design elements on the phone, they have to download relatively less data each time they’re used compared to a mobile webpage. So news venue apps often perform faster and display ads and content more uniformly and reliably than the mobile web.

...Which is really nice—except that apps don’t always support inbound links that people encounter on search engines, around the web, in social media, or in e-mails or text messages. Plus you need to build and maintain separate versions of your app for each mobile platform (Apple’s iOS, Android, etc.). And finally users must download, install, and remember to launch your app. (According to research by Localytics, over 75% of mobile apps don’t get used more than 10 times.)

So until typical U.S. mobile web pageload times improve substantially, the best strategy to grow your digital audience and build your business is to offer a mobile-optimized version of your website. Today.

How to make your site mobile-friendly and fast

This can be accomplished by offering a separate mobile layout (“theme”) that gets served when a mobile visitor is detected by your server—you can use cookies to give individuals the option to display the full site on return visits if they prefer.

Or, if you’re building a new site or doing a total site redesign, you might adopt more advanced web design strategies—notably responsive web design, which reflows and changes dynamically to best suit the type of device a user happens to have, from a large computer monitor to a tiny mobile web browser.

Smaller and newer sites often have an advantage on this front—their websites typically rely on newer content management system technology that makes it easier to deploy mobile themes and responsive design.

Regardless of how you deploy your mobile web presence, if your site is ad supported it’s crucial to learn about, and to educate your advertisers about, mobile advertising. The Mobile Marketing Association has compiled detailed, useful mobile advertising guidelines.

Eventually mobile web speeds will catch up with the desktop web experience—but when? Lelah Manz, chief strategist for e-commerce at Akamai, told Bloomberg this could happen by 2014.

That might be true for the average e-commerce site focused on direct sales, since they have the strongest motivation to optimize. But for content-focused sites, including news and community sites, I’ll bet mobile users will still be waiting, and waiting, and waiting, for a while past that.

Which means that publishers who start taking their mobile web performance seriously right now have a window of opportunity to gain a competitive advantage not only with the fastest-growing part of the digital audience, but also with advertisers.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

The Knight Digital Media Center at USC is a partnership with the Annenberg School for Communication & Journalism. The Center is funded by a grant from the John S. and James L. Knight Foundation.

August 15, 2012

Ad rates, events, and crowdfunding: Community news sites get innovative about revenue

By Amy Gahran

Community news is a challenging business; which is why making money is a key theme at next month’s Block by Block Community New Summit. And there’s growing room for optimism: as Groupon’s business model crumbles, more local advertisers may now be smarter and more willing to work with community news venues.

Here’s a roundup of some ways that community news publishers have diversified their revenue streams beyond display ads and grants…

Recently on the Block by Block resource network website, Sally Duros discussed how hyperlocal sites are rethinking their approach to local online advertising.

According to Duros, some hyperlocal sites are changing how they price and position online ads.

For instance, David Boraks, founder and editor of two hyperlocal sites in North Carolina, discussed how his sites simplified their ad value proposition and pricing by selling all ads across the entire site. Previously they’d offered separate rates for section-specific runs such as ads on the front page, the inside page, the health and fitness page, etc.

“We had four dozen ad slots across the site and about as many prices. It just got so complicated,” Boraks told Duros. “Most advertisers wanted to be on the front page.”

Now Davidson.net and its sister site Cornelius.net sell ads by size and page position, not by section. According to their media kit, “Ads run on every page of the site and will rotate within like ad slots. A minimum of 30,000 impressions guaranteed per month.”

Boraks said their ad are prices are determined by working backward from how much revenue the site needs to earn each month, in order to meet operational expenses. “If we sell 60% of ads on the site then we are at break even. Everything above that is profit and below that we are in the red a little bit,” he told Duros.

Duros also discussed how the Connecticut-based site CTNewsJunkie is taking a different approach, by offering advertisers more premium options—including site takeover, a “big block” 300600 banner slot, geotargeted ads, and exclusive advertising in their e-mail blasts. But like Davidson.net, they also sell ads on a run-of-site basis.

Meanwhile, Nieman Journalism Lab recently covered how Technically Philly (a news startup covering the Philadelphia tech and startup scene) is earning substantial revenue from events and other elements in a diverse revenue strategy:

Technically Philly’s flagship event is Philly Tech Week, an eight-day conference that’s free for tech companies to participate, and for attendees. According to Nieman Journalism Lab, all revenue comes from event sponsors. In April 2012, the second Philly Tech Week drew more than 10,000 attendees—more than double the inaugural 2011 conference.

Technically Philly cofounder Brian Kirk told Nieman that he estimates this year about 40% of their revenue pie will come from events. Consulting will supply a further 40%. And advertising and grants will supply only about 10% each. In contrast, in 2011 events delivered only about 12% of Technically Philly’s revenue.

Technically Philly also partners with local institutions and organizations for this conference, such as Temple University’s new Center for Public Interest Journalism, the Wharton School of Business at the University of Pennsylvania, and the Science Center (which provides lab and office space for local businesses). Several partners provided venues for conference events and other services, in addition to funding.

Technically Philly is a niche site with a geographic slant, which may position it better than more typical hyperlocal community news sites in terms of running events. However, community news publishers might consider partnering with local niche news sites on events. In most cases there’s probably enough common interests and potential mutual benefits to make it worth trying.

Crowdfunding for specific hyperlocal coverage has received mixed results, but it can be a revenue stream worth pursuing. For example, Charlottesville Tomorrow recently ran a successful Kickstarter campaign which slightly exceeded its goal to raise $7000 to fund development of 3D online models to help local residents understand the implications and impact of a planned major highway project.

But crowdfunding isn’t easy. Homicide Watch DC is a community news site that decided to turn to Kickstarter to fund a one-year student reporting lab. Editor Laura Amico recently explained on the Block-by-Block Facebook page what this sort of effort requires:

“It took us about six weeks to get from ‘let’s pitch on Kickstarter’ to having a pitch up. I think it’s a much longer, more involved process than many people realize,” she said. “It took us several rounds of edits (on rewards and the video) to get approval. We tried a Kickstarter campaign to fund our year-in-review package but couldn’t get approval for it, so I went ahead and did the package without funding.

“In short, my advice is this: plan early, plan often, submit early and be prepared to revise. We launched our new campaign at 6:30 p.m. last night and so far have raised $7,581, which is 18% of our goal.”

Mobile: the next revenue frontier. So far few community news sites have experimented with revenue from mobile ads or services, beyond running ads on their mobile sites or apps supplied by networks such as AdMob. There’s ample potential for community publishers to capitalize on the mobile market, and I am currently researching that topic to for my session on mobile monetization in at Block by Block 2012 next month. If you have ideas or examples of mobile revenue options for community publishers, please e-mail me.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

The Knight Digital Media Center at USC is a partnership with the Annenberg School for Communication & Journalism. The Center is funded by a grant from the John S. and James L. Knight Foundation.

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

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