How a Connecticut Network Helps ‘Indie’ News Sites Bridge Revenue Gap
Networks of independent community news sites are growing up and expanding out, and one of the biggest is the three-year-old Independent Media Network, which provides multiple layers of services — in advertising, editorial, business and tech — to more than a hundred community and other news operations in Connecticut. I spoke recently with founders Lon Seidman and Doug Hardy about how they help entrepreneurial editors-publishers put bread on their table.
Does what you do tie in with a downshift in programmatic advertising toward local and hyperlocal ad buys (and away from publishers with big numbers but not necessarily high engagement)?
SEIDMAN: We don’t think there is a downshift occurring. Big brands are getting results through big data and ad exchanges. They are seeing big engagement through social media platforms like YouTube and other larger publishers who can deliver huge numbers.
For hyperlocals it comes down to focusing on advertisers who find the content valuable and are willing to pay a high CPM. These clients do exist and can be found when you stop chasing big buyers and focus on those who find a community publication valuable and are willing to pay to support it.
HARDY: We are essentially a business incubator trying to help local news publishers generate revenue through any and all available models — so applying big trend concepts to what each of our members is doing isn’t all that effective.
What we do is offer tools and try to fit those into what a publisher is doing, whether it’s through direct display advertising, search advertising, re-targeting, or a combination of those, along with a variety of other revenue models. Some local news publishers may make it on advertising alone, but likely it’ll be a combination of ad revenue, reader support, syndication of content, events, business directories, job listings, and other services like web design for advertisers. There are a variety of ways to generate revenue under each of those areas, so there are plenty of options for publishers to choose from on their way to generating enough revenue to survive on their own.
As an ad network, we’re also trying to supplement their revenue through ad sales that target the whole network or groups of sites within the network.
Ad exchanges say “programmatic” can bring premium CPMs to smaller publishers when they can offer levels of audience engagement that don’t usually come with big numbers. Is that true with IMN? Do impressions from community news sites sell at higher or lower CPMs?
SEIDMAN: We are significantly higher, because the level of traffic hyperlocals receive [under their own power] will not put food on the table for struggling journalists.
In addition to our network revenue share, we also work with our members to help them develop their own local sales initiatives. We believe very strongly that hyperlocals need to be asking for at least a $10 CPM but should settle in at $12.50 or more depending on the placement.
HARDY: Some communities don’t generate enough traffic to start using a CPM-based business model right away, while others can get their traffic to that point relatively quickly. We usually assess a site’s potential and try to help them convert to a CPM-based model if/when it will increase revenue.
But before they get there, the key for local publishers is to avoid being one-dimensional with their revenue. They should be setting up lots of options to receive revenue in either larger amounts, such as big display at the top of their site, or smaller amounts such as smaller display, limited share-of-voice display, directories for local businesses, help wanted, direct marketing email blasts, donations, quarterly events, etc.
More than 70% of your members’ audiences make $50,000 or more, 81% are college-educated and 83% own homes. Do these demographics make a difference?
SEIDMAN: Yes — and this is reflective of audiences of hyperlocal sites. Readers are the opinion leaders of their communities and are attractive potential clients for higher-end local advertisers and those looking to influence local decision-making.
Can you deliver whatever audience profiles businesses want? Isn’t such profiling difficult and expensive to produce?
SEIDMAN: Not all the time. That is why we have been focused on the clients who are looking for the audience we are providing. We made the mistake early on trying to be all things to all people. Focusing on potential clients who fit our profile has dramatically streamlined our operation.
Does the IMN – the two of you specifically – earn anything from the impressions you sell to business?
SEIDMAN: We have other sources of personal income, so at the moment we are reinvesting our profits into the company and our members. We host about a dozen member sites and are also putting sales staff and resources on the ground for members.
We will be incorporating as a “benefit corporation” here in Connecticut as soon as it is legal to do so to help “codify” our social mission in case we ever are in a position to take investment capital.
Do your network partners have to meet any standards in editorial content and reach?
SEIDMAN: We are looking for professionals. We are working and taking with a number of former Patchers looking to get started with their own sites. There is no standard per se, but we are very eager to invest some time and resources into journalists looking to give this a shot.
HARDY: At the moment we’re limited by the amount of hours in the day, but like Lon said, we’re open to helping professionals who are serious about launching or growing their business, but if someone has a site that is generating traffic through less-than full-time work on their part, we’ll certainly take a look at it as well and see if we can help.
What are some examples of strong community news sites among your partners?
HARDY: We have quite a few sites that generate significant local traffic. CTNewsJunkie covers statewide politics and is one of our largest traffic drivers. Our newest additions are MilfordNow, HardenTimes and AllAboutMonroe. Some of our other local news members are NancyOnNorwalk, OnlyInBridgeport, OrangeCTLive, BranfordSeven, Lymeline and ValleyNewsNow.
More and more, we’re hearing about networks being built from independent community news sites. With the possible exception of a few strong, long-established sites, is the “one-off” in general no longer a good way to go in community start-ups?
SEIDMAN: We are very optimistic on the value of a one-off locally for local advertisers. Tremendous potential. Networks can help with supplemental income but ultimately community news sites need to hustle and build their brand so they are a “must buy” for local advertisers looking to reach local influencers.
HARDY: Grouping sites into one-stop shopping options for larger buyers is essentially what we do so that local publishers can get a piece of the regional or statewide ad campaigns that they wouldn’t otherwise ever have on their sites on their own. It’s not easy to close deals of that size, but those larger deals, on a per site basis, aren’t going to be enough to support any given site with their own local ad revenue and reader support.
Will we see networks like IMN in other states? Might you expand?
SEIDMAN: I am sure others will launch networks but few can afford to do what we do. At this point we are willing to help any professional get started wherever they are. We may not provide revenue for a bit but we can take the burden of technical overhead off their hands so they can focus on content.
HARDY: We’re always on the lookout for potential opportunities to help professionals get their businesses up and running. We’ve been talking with a handful of former Patch people and other entrepreneurial journalists outside Connecticut over the last few months. If we find the right publisher, he/she could be the person who builds momentum in a given state and gets a cluster of publishers on board. We’re here to provide the tools to make it work with as little overhead as possible.
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.