I recently was surprised while browsing through “Michele’s List,” the guide to the independent “emerging local news ecosystem” continually updated by researcher journalist and researcher Michele McLellan. Most of the sites were in the two lowest tiers of revenue — “below $50,000” and “$51,000-$110,000.” The majority have been around for a while, some as long as five years. Are they doing something wrong?
Are these publishers doing something wrong?
In most cases, absolutely not. Some will eventually grow out of those tiers, especially as advertisers continually adjust to the idea of buying ad space online, and these journalists-turned-entrepreneurs develop strong sales skills and loyalty in the community.
But let’s talk about the reasons publishers might actually stay in those lower tiers:
One, it’s part of a larger strategy. Some indies, like Deb Smith at Jersey Bites or Krystal Knapp at Planet Princeton, do significant social media work on the side. They act as something more akin to an agency rather than a publisher/publication, and the website is an important part of the toolset. I actually see this as a serious model for success (Jeff Jarvis does too).
Two, it’s not a full-time thing. Some publishers are talented hobbyists, and either have other full-time careers or are simply retired and use it for fun and to supplement income. Look at Justin Auciello, who obviously runs Jersey Shore Hurricane News because he loves it, but is a city planner by day. $50-100k would be a nice part-time income if it can be achieved, so for some folks there may not be much motivation or time to keep aggressively expanding.
Three, there’s a real upper bound on potential income for a geographic area. This is where reality sets in. Some publishers, not necessarily on Michele’s List, just won’t be able to make it in the town they started up in. What is the average amount of marketing dollars available from an advertiser in town, and how many of them are there? In these types of places, the publishers with the best of ad sales skills wouldn’t be able to make it. There’s a fix for this though.
Four, the publisher is not very good at, or dislikes, sales. You can have a great product, but if no one is selling it, you aren’t going to make money. Indie publishers got started because of passion for their community, and probably not because they like knocking on doors. This is a major hurdle, and something training programs like Community Journalism Executive Training (CJET) and organizations like New Jersey News Commons are trying to correct.
Points three and four can be fixed by getting publishers on a simple platform for direct ad sales — like an ad exchange.
The ability sell digital ad space efficiently is, in general, becoming an absolute necessity to compete for advertiser dollars. Local ad inventory cannot be an exception. More importantly, the ad inventory of beloved community news sites has a special value that isn’t being optimally exposed to buyers, big or small.
If I were a marketer for a community bank that wanted to advertise on five indie sites in the area, I can’t do it without talking to five different publishers, sending the same creative five times, and writing five checks. Broadstreet is helping solve that problem, initially in New Jersey. Talk to one publisher, write one check, go live on five sites.
The ad exchange concept is key to helping publishers band together for bulk sales. It also opens the door for individual publishers who want to sell more than their own ad inventory. It makes the indie publisher the king of ad sales in town.
Another interesting note is that in New Jersey we have publishers partnering with school districts to sell sponsorships in the form of ads on the district website. We believe this is all the very start of a much more dramatic change.
So the indie publishers who need or want to get out of the lowest revenue tiers can do it?
Absolutely. Like I mentioned, many publishers are going to break out of that tier simply because advertisers are becoming more accustomed to buying digital ads. They’ll also move up to higher tiers as they increase their ad rates to reflect growth in traffic. And finally, some will naturally get better at the ad sales game.
Alongside that, platforms like Broadstreet will make the buying and selling process more efficient, and bring it more up to speed with what is available on the national stage. It’s going to unlock revenue streams that had been blocked up by several layers of inefficiency, and bring the costs of ad sales down. I don’t believe it’s a matter of if, just how soon.
Tom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of the in-development hyperlocal news network Local America that will rate communities on their performance across a broad spectrum of livability. He will present the site’s new demo on Charleston, S.C., at the DIG SOUTH 2014 interactive festival in Charleston on April 9-13, 2014.