Hyperlocal Case Study: Efficiency, Aggregation, and Profit

Ken Hawkins is a guest author. If you would like to contribute a guest post, click here.

There’s one thing every publisher of a local news site knows: making enough ad dollars to get paid is hard. In fact it’s really hard. But it’s been my experience that if we look at why the Web is so dang good, we can make the struggle to keep the lights on merely a stiff hike.

At TheDigitel, which we founded in 2008 to offer a central place for hyperlocal coverage in Charleston, S.C., we’ve managed to carve out a niche among a saturated market (we have several conventional media outlets and a vibrant local blog and Twitter community) by taking an evolving approach to creating content and winning advertisers. It’s an approach that has allowed us to make a profit. Here are some of the lessons that we’ve learned along the way:

1) Focus on core profit areas and link if you can’t lead

Community coverage is a civic service, but it’s also a business, so publishers should keep in mind a basic rule of economics: if you can’t produce a competent article on the fire, new cafe, or council meeting for cheaper than the other publications in your market, let them do it.

We can think this way thanks to the Internet, as it’s a medium whose core principle revolves around linking. Not only does this provide for more connected content but it also allows us to focus on our “core profit areas.”

TheDigitel’s natural coverage areas (where we can produce the strongest content) are local food, tech, and the environment — and they’re where we spend our resources doing primary coverage. Outside of those topics (or if another source beats us to a core area and does a compelling job) we can do something that’s only possible thanks to the Internet: instantaneously connect readers to the coverage elsewhere.

From the traditional publisher’s perspective, sending readers to your ad dollar competitor makes little sense, but in the Internet age there are two truths, I think, a publisher has to accept: 1) The market’s proved there aren’t enough dollars for a single publisher to do it all, and 2) to readers accessing free-to-read content at the cost of merely clicking a link to another site is as close to a free lunch as economists will ever see.

2) When writing stories, ditch the history lesson

At TheDigitel we put a lot of thought into how (and how often) readers engage with us and have experimented with hybridizing a more traditional “top stories” news site and easy-to-browse (and scroll) chronological blog format. Our format works well for us because of the diversity in our topics and the volume of our updating (about eight to 16 posts a day). There is no magic one-size-fits-all news site theme, but if you design around how readers interact with your content you’ll receive more page views (and better ad placements).

But it’s not just about design, it’s also about content. In traditional print newspaper writing a reporter will spend 20% or more of the article’s space summarizing what was told in prior reporting. While it’s still critical to bring readers up to speed, through using links on TheDigitel to past coverage and topic pages we not only get a reader to the meat of a story faster but reduce the time it costs to write content and encourage reading of back coverage — and that means more informed readers, and more ad dollars.

3) Modify your ad approach as appropriate

We’ve experienced a number of models and frustrating scenarios while growing our ad revenues:

A) Consider the client’s cost-benefit perspective: At its base, it’s useful to acknowledge that if you do, say, 100 page views a day, even if it costs just $25 per advertisement an advertiser would spend more time deciding to advertise and approving/designing creatives than they would likely see in benefit. And using the same creative for months just gets too stale for effective reader consumption.

So if it’s not realistic to expect your circulation will get big enough in the near future, look to other independent local publishers in the area (or even modestly popular bloggers) and build an online ad network.

B) Speak the client’s language: We’ve considered both monthly rates and CPMs and found the CPM model is really the way to go for our business goals. But explaining what a Cost Per Thousand is — particularly to mom and pop local advertisers — makes eyes gloss over. So we try to do our best to explain this to advertisers in making that one impression is like being in one copy of a publication. It’s helpful to work through savvy local PR firms — not only is it easier for them to explain your proposition, but the businesses they represent will be more likely to try something new with a trusted recommendation.

But above all else, we’ve found that thinking about these sorts of things is as critical as (and part of) having a business plan. And don’t ever be afraid to adapt your model as your company learns and the market changes.

Ken Hawkins is a founder of TheDigitel, a network of three hyperlocal sites in South Carolina.  Click here to find more about him. 

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