Kirk Caraway is a guest author. To submit a guest post, click here.
There has been a lot of criticism hurled in recent months at AOL’s hyperlocal news experiment Patch. It seems that some new “dramatic” tidbit is always showing up in the trades about how Patch is failing.
Some of this criticism is deserved. I don’t think the folks at Patch would claim there haven’t been mistakes made. But part of the reason it’s in focus is that the company makes an easy target for those in the news business who are shell-shocked by the changes transforming the industry.
I think there is a lot of value in the network approach to hyperlocal news. Many small startup publishers are challenged by the technical details of web publishing — and by the need to offer the kind of polished, powerful, digital product that online readers have come to expect. Tech and design can suck up huge amounts of time and resources. By centralizing the technical details, Patch achieves an economy of scale, and frees its local editors to concentrate on content.
Putting content aside, though, it seems the big problem for Patch is sales. With only $20 million in reported revenues for 2011 across the 850+ sites, it’s clear that something is missing. This report from Business Insider quoted a Patch sales team member who said that 70 percent of salespeople were not hitting their targets. Another report estimates that the average member of Patch’s 152-person outside sales team is only bringing in $52,022 a year in ad revenue.
Patch’s problem is the same one that affects many other local news operations: in pinning its focus so heavily on display ads, the company isn’t offering local businesses the kind of comprehensive marketing service they really need.
Let’s back up a minute. Before the web, newspapers were the kings of local. If a you had a local business and needed to get the word out, you just called up the newspaper to place an ad. It was that easy. But newspapers don’t have the monopoly they enjoyed in the past. Not only are there many other sources for local news, newspapers also have to battle for readers’ attention against Facebook, YouTube and the entire Internet, as well as 500+ channels of television, Netflix, video games, etc. The days when a local business could successfully market itself to new customers by simply buying an ad in one publication are gone. Yet online news organizations — including Patch — are still by and large using the same old newspaper advertising model.
The mission of any newspaper or other advertising-supported media operation is this: Help your clients communicate. That is what they pay for. In today’s media world, display advertising is just one method of communication. These days social media, public relations, search engines and other online marketing vehicles all play a role as well (in addition to advertising). Those in the local news business might despair at this fragmentation, but they are actually missing a huge opportunity.
If you talk to local business owners about all of these online promotional vehicles, you will find that most of them are confused and frustrated. They know they should be using Facebook and Twitter, or updating their websites, or doing more PR, or sending out email blasts. They are constantly hit up by salespeople promising to put them on the front page of Google, or selling them Yellow Pages listings online, or a hundred of other types of advertising. But they don’t have the time or the knowledge to handle all of these things. Too often they fall for scams, or rely too heavily on one vehicle, only to find that it doesn’t pay off.
Unlike other local start-ups, [Patch] has the resources to build this kind of integrated system, and can use the power of its network to create effective marketing and sales programs to push out to all their sites.
Businesses don’t need more online advertising options. They need a solution. The real opportunity is to offer businesses a service that bundles together as many of these promotional vehicles as possible into a simple, low-cost package that makes it easy for them to communicate with their customers.
The service I envision is one where a business manager can do something as simple as writing an email, and have that message pushed out through multiple channels. He or she can write, “Hey, we’re having a sale today!” and have that message automatically formatted into an advertisement on the news site. In addition, it could also be pushed out to his or her blog, as well as posted to Facebook, Twitter, Google+, etc. In the process, that same message could be emailed out as a press release to all the local news media and/or blasted out to the business’ customer email list.
The next step would be to integrate this message into the news site. Press releases can be automatically imported in the site, and displayed as sponsored blog posts. Those messages that have dates tied to them can be included in the site’s event calendar. Messages could also be marked as coupons or specials, and given different display options, or included into the news site’s email newsletters and social media pages. The service could even create local advertising networks to place these ads on other sites, or allow clients to book and manage ads on Google, Facebook, Bing and others.
If business managers are too busy or not savvy enough to pump out the messages themselves, then a fully managed service could be offered to do it for them. Now, you have something that is worth a lot more than CPM-based banner ads.
There are other services available that try to make it easy for business to update different social networks in one step. But the advantage local news publishers would have with a system like this is the ability to combine their clients’ communications with advertising and content, and present them to a local audience. Just as advertising alone is not the answer, neither is social networking. This is where local news sites like Patch can offer a service that others can’t.
If Patch decided to go this route, the company would be well-positioned to make the service work. Unlike other local start-ups, it has the resources to build this kind of integrated system, and can use the power of its network to create effective marketing and sales programs to push out to all their sites.
But to get there, Patch will have to change its advertising-centric mindset and focus on providing a service with real value to local advertisers. No business can be successful unless what it offers to its target customers is something they need. Solving their clients’ communications needs would go a long way toward patching the hole in AOL’s ship.
Kirk Caraway is founder/publisher of CarsonNow.org, and mother site of the Nowtown Network that includes SouthTahoeNow.com. He grew up in the newspaper business, and is an award-winning writer and editor. He started building and managing local news websites in 1994, and has witnessed firsthand the evolution of local online news. He can be contacted at firstname.lastname@example.org.