'Indie' Local News Now Finds Profitability in Affluent-but-Challenging D.C. Market | Street Fight

‘Indie’ Local News Now Finds Profitability in Affluent-but-Challenging D.C. Market

‘Indie’ Local News Now Finds Profitability in Affluent-but-Challenging D.C. Market

Washington DC skyline in watercolor background

2015 was a big year for independent community news publisher Scott Brodbeck and his Local  News Now sites in metro Washington, D.C.  First, he acquired and re-launched a site that went dark in 2013 after a promising start covering popular inner-core neighborhoods five years earlier. Second, Washingtonian magazine named his sites the “Best News Blogs” in the region. And, most importantly, his company returned to profitability after several quarters of investment in technology and other capital projects.

Significantly, all this good news occurred in the same year that the Washington Post closed its huge-but-money-losing community news operation in suburban Maryland whose roots went back to the pre-digital 1960s. And Brodbeck pulled off his performance in a region whose premier position in affluence attracts a lot of community-based news competition.

To see what makes Brodbeck succeed in the tough business of community news, and as a self-financed independent, no less, I put these questions to him:

In the five years since you began your first site, ARLnow, in the Northern Virginia suburb of Arlington, you’ve expanded to three sites, both new and acquired, that serve multiple communities. Your market is affluent and growing at a good clip. Do you plan to add more sites in 2016?
Probably not. This year we’re focusing on growing per-site revenue. Looking to 2017 for another growth spurt. We’re self-funded so our growth is dependent on increasing revenue.

Describe your “pure-play” editorial model.
A hyperlocal hybrid of print and broadcast news styles. We’ll do relatively deep reporting on county government issues followed by a quick crime or weather story. We add in a touch of personality to keep things interesting.

How many stories — as a percentage of total editorial content  per site — do your sites share?
Very little, less than 1%. Hyperlocal means that there’s not much overlap of interest. We don’t do “regional” stories.

Scaling can be the curse of “pure-play” community news sites. How have you avoided that — what’s your “secret sauce”?
Work hard, have a great product. Keep readers happy with lots of interesting content they can’t get elsewhere (until Patch inevitably rips us off the next day). Keep advertisers happy by giving them affordable ad and innovative sponsored content options. It’s not an easy balancing act, you’re essentially serving two customers. And you can’t breach ethical boundaries to make advertisers happy, then you violate the trust of your readers. Those are some of the most difficult conversations, when you have to tell and advertiser no.

I honestly don’t know if we have a “special sauce” beyond hard work and making smart decisions. We haven’t found a way to scale quickly, probably because there are no short cuts in this business. But we are committed to growing at whatever pace we can, because we believe in the brand of community news we’re producing and want to spread the love. There have been bumps along the way, but the more we learn the better we’re getting at this.

ARLnow stats, 2015What kind of news do your readers want most? Do they like short or long or a mix?
I believe in the value of a mix. A mix of types of stories, of lengths, etc. Generally, breaking news, crime news and business openings and closings are our most consistently well-read articles. But we also get big readership numbers on quirky community stories and on certain politics and government pieces. (See chart of Local News Now traffic by site at right.)

Does the size of your network help attract more advertising?
It helps, but D.C. is a big area and we don’t have regional coverage. We have a nice case to be made about reaching certain Millennial-heavy areas, but so far local advertisers haven’t been beating down a path to our door to reach Millennials specifically. I understand that a regional print advertising network has been hurting after the Washington Post closed down the Montgomery County Gazette, punching a big hole in their claim of being regional. I would rather focus on local, I think that’s where the opportunity is. We’ve made some cross-site sales but it isn’t a huge part of our business.

Do display ads still rule?
They’re still more than 50 percent of our revenue, but I wouldn’t be surprised if that drops below the 50 percent mark by the end of the year as sponsored content continues to be popular with advertisers and as we ramp up another business line or two.

You offer varieties of sponsored or promoted content to advertisers. Are they buying into it?
So far so good. The biggest challenge is educating our clients on the product. Even though advertorials have been around forever, our brand of sponsored content is different. We need to get clients out of the mindset of just promoting themselves and into the mindset of delivering value to readers with their content.

Do you get involved with programmatic advertising?
Zero percent — the downfall of programmatic is coming. Ad tech is on the verge of a big shakeup. I think the focus is finally going to shift back to quality ads vs. shear quantity and automation. Advertisers — especially brand advertisers — will find that targeting content works better than trying to target readers via intrusive ad tech voodoo. I love the general concept of what the Washington Post is trying to do with PostPulse.

I’ve avoided programmatic because I don’t believe in the value. We similarly avoided the daily deal space because I didn’t believe it was benefiting most of the businesses doing the deals.

Advertising is most effective when it works on an emotional level. Programmatic strikes me as an effort to try to pave over the emotion and the art of advertising with science and technology. It was doomed to fail.

How many advertisers, overall, do you have who are regular clients?
Around 50. Lots of other advertisers who advertise more sporadically.

How important is social media to your success?
It’s a key distribution channel, for sure. The immediacy of Twitter helps to get the word out when we have breaking news coverage. I hope Twitter doesn’t screw that up with their product updates. The world is better off with both Facebook and Twitter in its current incarnation, not Facebook and a new Facebook-like Twitter.

How big is technology for your network?
I’ve invested a lot of money in building our site, to make it attractive, mobile friendly and give us plenty of ways to monetize it. For an online news outlet, your website is your businesses’ public face. If it looks cheap, that’s how both readers and advertisers are going to value your product. That said, there are plenty of publishers that are overdoing the tech thing, and just bogging down their websites in the process. Keep your site light and don’t go too heavy on the bells and whistles. Let the content stand out on its own.

Your Arlington site has much more traffic than your other sites and also appears to have much more advertising. Are those numbers beginning to balance out, or will ARLnow always rule?
Arlington has a population size advantage over all of our other sites, so it will probably continue to rule the roost traffic-wise. But readership for our other sites, particularly Borderstan and Reston Now, grew nicely in 2015. I expect that to continue in 2016.

What about outside investment?
I have taken no outside investment, ever. I’ve had discussions with those who have expressed interest but nothing too serious. I’m not opposed to outside investment, to help spur growth, but don’t have any plans to actively seek investment this year.

What’s the biggest and best lesson you’ve learned through your expansion?Don’t stretch yourself too thin. Make sure you have adequate time and resources to devote to a new publication.

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.