AOL: Patch Remains on Path to Profitability, Expenses Cut 30% | Street Fight

News

AOL: Patch Remains on Path to Profitability, Expenses Cut 30%

0 Comments 06 November 2012 by

Patch saw a 19% year-over-year bump in traffic during September, bringing monthly unique visitors across the property to 11.9 million, according to AOLs second quarter earnings report.  During its Q3 earnings call Tuesday, the company reassured investors that the hyperlocal network remained on track to achieve run-rate profitability by Q4 2013, driven by, what AOL COO Artie Minson called, continued revenue growth and “an expense base that was 30% lower than last year.”

Minson attributed the lower costs to recent efforts by the company to combine towns and “more efficiently [structure] the Patch operations” — likely referring to reported cutbacks to its editorial operations that have come as the company looks to push toward a more user-driven model. Patch released a major redesign to handful of alpha sites in October with a distinct focus on user-generated content as the company looks to mitigate expenses and increase engagement in what AOL CEO Tim Armstrong called “phase two” for the hyperlocal initiative.

Armstrong remained mum on the progress for the alpha sites, saying only that traffic numbers were “comparable overall” to the original sites and that “[the alpha sites] have not seen huge spikes up or down in usage.” Its remains early days in the pivot, but the success of the redesign likely rests on forthcoming revenues models built around the increased engagement seen in the alpha sites.

Part of the reason Armstrong remained hesitant to release specific figures was that Patch, as a whole, saw a big bump in the wake of Sandy. Traffic on the 329 sites affected by the storm quadrupled over the past two days, with social traffic doubling. Last Tuesday, the day after the storm hit, was the single highest traffic in the network’s history — twice as high as the previous record.

It remains unclear to what extent the traffic spikes driven by Sandy, and the elections, will translate into sustained growth, but key actions like mobile app downloads, which increased seven fold after the storm, should help convert news users in brand consumers.

Steven Jacobs is deputy editor at Street Fight.

Related: Patch Redesign Emphasizes Social as Path to Revenue Growth




Newsletter

Get hyperlocal industry headlines in your inbox every morning. Subscribe to the Street Fight Daily newsletter.

Follow Us

Get the latest Street Fight news, information and analysis via Twitter and Facebook.

The Local Merchant Report

Learn how to better target this important-yet-elusive market. Key insights, case studies, and strategies make this a report you can't afford to miss.
Get your copy today!

Free eBook

How Mobile Location and Behavioral Context Skyrocket Conversion Rates: Location personas increase the value of ad inventories and give publishers a way to better target content. Learn how it works and improve your ROI now. Get the ebook produced by:
Download here

The $20 Billion Mobile Marketing Opportunity

Strategies and insights into the landscape of targeting options and how they deliver foot traffic and sales for SMBs.
Get your copy today!

Why Local is the Future of Commerce

The local marketplace is under renovation and four layers of disruptive technologies have emerged. Siloed early on, these industries are starting to coalesce, working together to form layers in a coordinated stack. Read the introduction to "The Local Stack" special report, underwritten by Yext.

How Back-Office Innovation Is Transforming Local

In this new report, Street Fight takes a look at the impact of supply-side technologies on the local marketing industry, detailing the opportunities and risks that these emergent services present to existing solutions providers.

Twitter

© 2014 Street Fight.

Powered by WordPress. Hosting by Page.ly