I was surprised — shocked, actually — to recently discover that the regional community news network Daily Voice has average ad sales of only $38,000 annually on a current basis at each of its 41 sites in suburban Connecticut and New York. But then I calculated Patch’s per-site ad revenues, based on this TechCrunch analysis, and it was even worse at the much bigger community-based network.
TechCrunch, which is also owned by AOL, had only high and low revenue estimates, so it settled on a mid-range number — a total of $23.5 million annually. That sounds like a lot, until you divide it by Patch’s 863 sites. What you get is $27,231, which is more than $10,000 below Daily’s Voice’s per-site number.
Is this the new normal for ad revenue at community news sites? I went to four other community news publishers-owners, all independents, to get their reaction:
Howard Owens, founder of The Batavian,in upstate New York:
“Last year, The Batavian’s gross revenue was more than $160,000. In our third year, we did about $120,000. If you can’t do at least $100K in the kind of markets the Voice and Patch target, your entire model is seriously flawed. Those markets should be easy $200K annual markets.
“Even if I wanted to live as cheaply as I could — crappy apartment, one car, old computers (you get the picture) — $38K annually wouldn’t keep us in business. One could survive, but you would have no money for promotions, no money when equipment breaks (and it will break), no money for help when you needed it (even if you don’t have staff, you still need freelance help at least sporadically). A regular job at $38K would be good for a lot of people, but it’s not enough to run even the smallest news business on, especially in a chain ownership situation where the mother ship has an insatiable appetite for revenue. I imagine every LION [Local Independent Online News] member with at least three years in business is making substantially more than $38,000 a year.”
Ben Ilfeld, co-founder of the Sacramento Press and CEO of its offshoot AdGlue:
“I can tell you that for The Sacramento Press, even in the very worst of times, we had much higher revenues that that. Of course, we were spending more too. We made a real and significant investment in our community and it shows.
“Right now, I’d consider The Press in bad shape revenue-wise and we are doing over $10,000 a month in revenue on almost entirely display advertising. But that’s not nearly enough. And during better years we were generating over $300,000 a year.”
Scott Brodbeck, founder of ARLNow in Arlington, Va., and BethesdaNow in Montgomery County, Md., both suburbs of Washington, DC:
“I would be very much in debt if I was only making $38,000 in Arlington, Virginia, let alone paying two full-time employees and office rent.
“It’s a completely unscientific benchmark, but from personal experience I’d say generating $1 in annual revenue for every resident of the community you cover should be achievable after three years. For those in a ‘strong market,’ I would echo Howard Owens in saying that six-figure revenue should be do-able. It’s not necessary, though, and that’s part of the beauty of being independent: you can decide to run your site as you wish, and if you prefer to focus on in-depth reporting or work-life balance instead of maximizing revenue or profit, you can, while still making a good living. That said, you don’t really have to sacrifice quality in order to maximize profit — I think Patch will soon learn that lower quality means fewer readers and less revenue.”
Gordon Joseloff, founder of WestportNow, with which Daily Voice competes in the tony Fairfield, Conn., suburb of Westport:
“No, we would not be in biz at 38K. Fortunately, we are doing much better than that.
“Hard to say what kind of ad revenues a community site at three years in a strong market should be generating. So much depends on many variables. But it all comes back to having timely content that attracts eyeballs. Fortunately, we are able to keep our costs under control and are prepared to spend when necessary.
“For example, when the Westport Little League last month won the state championship, went on to the New England Regionals, and eventually the World Series in Williamsport, Pa., we were able to have a photographer along for the entire journey that covered almost four weeks. Ditto when they were honored last week at Yankee Stadium.”
Looking at all these numbers, I think it can be said, safely, there’s no new normal of $38K or $27K for ad revenue at community news sites. I’d go further and venture that numbers in that low range are actually abnormal.
Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.