LION-Borrell Revenue Survey Unravels

New Picture (4)A revenue benchmarking partnership between the Local Independent Online News publishers association (LION) and Borrell Associates is coming apart because too few of LION’s independent publishers want to share their information with the the local media research company.

“Only three sites have submitted their revenue,” Borrell Associates CEO Gordon Borrell told me. “We can’t do a benchmarking survey with three sites.” Two-year-old LION’s membership includes more than 90 independent community websites.

LION had been promoting the survey — which would be free for all member sites — with this message: “Borrell, a noted industry research and consulting firm, will survey members on their revenues in various categories to gather data for a private, members-only report on the state of the LION segment of the industry.” But the promotion was removed from the organization’s homepage last week.

LION chair Dylan Smith, who is publisher of the nonprofit Tucson Sentinel, did not respond to questions about the survey from Street Fight. He was a strong advocate of the revenue benchmarking survey when partnership talks with Borrell began in the fall of 2013, and continued to support it into 2014 even as member publishers pushed back on signing up.

Three member publishers I contacted declined to talk about the issue, and a fourth asked me to contact LION Chairman Smith. A fifth, Kelly Gilfillan, co-owner of BrentWord Communications, which publishes four community sites in suburban Nashville, said: ” A true system of follow-up is probably needed with explanations of the value of the survey. Also, having access to the information as the end game would probably help.”

Borrell said:”These guys are probably too busy, or a bit concerned about releasing financial information..or embarrassed that they might make far less than others.”

But the failure of the survey may have been driven in part by the antagonistic feelings that many “indie” publishers have toward the “legacy” media — newspapers and broadcasters — with which Borrell has strong client relationships. Borrell, who started his media career as a reporter for the Norfolk Virginian-Pilot, insists he’s agnostic about local and hyperlocal news platforms, and says his clients include “a fair amount of local independent publishers who aren’t part of the LION group.”

Borrell collects revenue data by category from hundreds of hyperlocal companies, both news organizations as well as commercial ones like Groupon and AutoTrader. Sites that participate in the benchmarking can compare their numbers against Borrell’s national pool of respondents among similar platforms. Individual site revenue numbers are confidential.

Data from more than 6,000 digital local sites covering newspapers, broadcasters and “pure plays” is collected for the annual “Local Online Media Revenue Survey.” This report shows aggregate — non-confidential — revenue data in 513 “Digital Marketing Regions” mapped by Borrell.

Borrell is concerned that too many community news sites continue to build their strategy around the idea that: “If you have great content, people will come.”

“On the Internet,” he says, “that’s not true. Users find a site most often through Google. They don’t care about the source.” The mission for news sites, like other hyperlocals, he says, “should be to serve local advertisers.”

“Local news publishers are starting to understand the nugget of this truth,” Borrell said, “but they need to hear it again and again.”

To do this, he said, publishers have to develop a more comprehensive strategy around social sharing, particularly on Facebook: “The local auto dealer says, ‘I don’t need to pay $10 to $15 CPM on your community news site. It doesn’t get the clicks. When my ad appears on Facebook [at a more competitive price], users pay attention.'”

Borrell said it would be a mistake for “indie” publishers to not to share revenue data because they’re not happy with their number. “What’s important is not what you’re doing now, but what you could be making,” he said. “Your revenue now may be a couple of hundred thousand or even $350,000 annually. Wouldn’t it be great to know that you could do $1 million, or $2 million or $3 million?”

How well community news sites are performing in revenue generation is known only in a patchy way — when sites voluntarily declare their numbers. “The New News” has published revenue numbers — at least in dollar ranges — for many sites it has featured.  Journalist-analyst Michele McLellan publishes the annual Michele’s List, which also has revenue numbers for those sites that disclose them. In a recent report based on a survey in which 60 community publishers responded, McLellan said 62% reported increase in revenue in 2013, 23% no change and 15% a revenue decrease. The average increase was 49 percent and half of the respondents doubled their revenue, they reported. The average decrease in revenues was 20%. Michele’s List covers more than a hundred independent sites, but there are perhaps several thousand sites — covering both independents and corporate platforms in networks — that report community news in one form or another.

An earlier survey of Michele’s List showed that 52% of respondents grossed less than $50,000 counting all kinds of revenue.  Among other respondents, 18% reported revenue of $101,000 to $250,000 and 14% more than $250,000.

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of the in-development hyperlocal news network Local America that rates communities on their performance across a broad spectrum of livability — Local America Charleston launched earlier this year.

  1. Indie Publisher in NJ
    June 23, 2014

    I am asked to do a survey a few times a month for it now. I don’t have the time. This interview, the quotes, and the info. shared reaffirms I made the right decision not to participate.

  2. West Seattle Blog
    June 23, 2014

    Yes, and great content gets you great placement on Google. And Bing. We’re not part of LION so I didn’t even know about this but Borrell has been quoted here in ways so dismissive to our type of business, I wouldn’t have wanted to talk to them. The quote also shows that they have no clue what local advertisers really need. It’s not clicks. Local advertisers don’t sell on the Web and many can’t even keep their websites updated. They need awareness. Display advertising is part of that and that’s what we and many of our counterparts focus on. Sorry, you are wrong – the kind of engaged relationships that local community members have with this type of news publication means that they have a different relationship with ads and advertisers, too. – Tracy

    1. Doug Hardy
      June 23, 2014

      Could not agree more, Tracy

  3. Indie Publisher
    June 23, 2014

    Did only three publishers participate in the survey or did only three provide financial information?

    How can the author cite an individual as a “strong advocate” for survey without talking to that person? The organization has a full functioning board, perhaps an inquiry to its admin seeking a statement was in order.

    FYI, the “Borrell offering LION members free benchmarking survey” is still on the LION Publishers’ website – it’s just on a members-only page.

    Interesting how Borrell has no problem drawing conclusions about the industry – without collecting the data he claims to need in order to do so.

    1. TomGrubisich
      June 23, 2014

      To answer your questions:

      Three publishers provided revenue numbers for the survey.

      The “strong advocate” is LION Chair Dylan Smith, who did not respond to my queries.

      As for the FYI, the promotion about the revenue survey was featured on the homepage until it was removed last week.

      1. Me
        June 23, 2014

        Actual facts apparently don’t matter to you.

  4. June 23, 2014

    First, Nothing I say should be construed as speaking for LION.

    I will disclose that I responded to Gordon’s survey.

    I respect Gordon and support what he’s trying to do. I think it’s valuable data and wish more indie publishers would participate.

    That said, I’m also taken aback by Gordon’s remarks in this story and it’s long been an area were we strongly disagree. Without qualification, I disagree with his statements on local news and local advertising.

    The Batavian dominates its local market because of our news content. We’re the #1 source for news in our market and the market leader in total number of advertisers.

    We would be in that position without Google or Facebook. Combined, those two sources generate less than 20 percent of our traffic. The majority of our traffic is direct to site.

    As for advertising, we’re the place to be locally. The site sells itself and most of our new accounts these days come from local businesses contacting us, not outbound sales calls, because we’re so effective for local businesses. I’ve always feared Facebook as a competitive threat, but it’s just not materializing that way. In the past two years, we’ve lost one account to national media company placement.

    I believe the successful local indie publishers would tell much the same story or acknowledge that their growth trajectory is putting them on a similar path.

  5. Doug Hardy
    June 24, 2014

    Like Howard Owens, I don’t speak for the LIONs either – I’m just another member of the group who finds the tone of this piece to be … puzzling.

    A “revenue benchmarking partnership” … that is quite a mouthful. It was just another survey and there will be more to come. Calling it a partnership is a big stretch. I think the survey was offered in good faith, for whatever that’s worth.

    Some members of the LION group filled it out while others opted not to do so for a variety of reasons. Or they partially filled it out. The survey arrived at a point where I know for sure that some folks hadn’t even finished totaling their expenses for the previous year and/or had yet to file their taxes. Just based on their nature, reporters don’t want to provide guesstimates. In some cases they have the numbers. In others, they will tell you they haven’t missed a mortgage payment yet, so things are fine.

    But if they didn’t have the numbers ready, they likely passed on the survey. Not to mention the fact that there weren’t a whole lot of guarantees about where the information would end up.

    The LION group is only a few years old and even if every one of us filled out the survey we would represent only a small sample of the indie news industry at this point. There are a huge variety of people and skills in this business. No two publishers are the same, no two communities are the same. Maybe that’s why critics & pundits are failing so miserably in their efforts to quantify whether this whole thing is going to work. There is no single model that’s going to work everywhere. But there are lots of models working in lots of places, and they’re doing just fine – and they’re developing revenue in areas other than advertising.

    I’m mildly irritated by the insinuation that because publishers didn’t fill out the survey, there’s a loss of legitimacy of some kind. I don’t see it. That reads like a promotional tool for Mr. Borrell’s organization.

    As far as news publishers expecting an audience to show up simply because the content is good . . . that era ended around 2004 or so. If you’re operating that way, you’re not likely going to bring in enough revenue to cover the small cost of joining LION or any professional association for that matter. Why is that question even being asked? In 2014, it’s ridiculous to suggest that anyone is operating a business that way.

    Years before LION was formed some reporters did expect readers to just show up simply because they built a website, focused their efforts on reporting, and made sure to use Harvard commas. Those who never developed a business model are long gone.

    We all do a lot to push our content out to our readers with a variety of methods and tools – and those are continually evolving. We lean on each other for best practices in everything from reporting to technology to sales to bookkeeping to how to handle a difficult interview … etc.

    But that’s the value of groups like LION – shared expertise, shared frustrations, shared successes. We’re a buddy-system of small companies across a bunch of time zones.

    Local publishers are meeting people face to face in their communities every day. There is no better marketing than that. That’s why more and more independent publishers are staying in business longer and showing steady growth in audience and revenue. A lot of these publications are operating just about 24/7 – and no one does that for the money, they do it because they love the work, they believe in the work, and their readers know that, and support it. How much “benchmarking” is needed to meet the social mission of covering the news for one town?

    I know there is value in survey data – we report on surveys all the time. But it seems like Mr. Borrell is dangling some giant revenue figures (“Wouldn’t it be great to know that you could do $1 million, or $2 million or $3 million”) in an effort to get more survey customers.

    In a town of 10,000 households with *maybe* 60 small businesses… does anyone think $1-$3 million would be a realistic revenue goal for a website staff of one reporter and one ad sales person?

    Let’s say you get all 60 businesses to advertise at $200-$500 per month – that’s $252,000.

    If you got a $75 annual subscription payment from every single household in town, that would get you $750,000 and put you at a little over $1 million. . . at an unheard of 100% marketshare in any medium. I don’t really need a survey to tell me that’s not realistic. What’s realistic is bringing in one full salary with benefits per person in the operation and covering ancillary expenses, and that’s the world we live in.

    Look I’m glad someone is trying to use data to illustrate what’s happening. As long as they’re not trying to tear us down, I’m all for it. Survey companies also need paying customers and there’s nothing wrong with that. But the suggestion that we don’t know what we’re doing, because some of us didn’t hand over proprietary data for a survey, is off the mark.

  6. Gordon Borrell
    June 24, 2014

    The infamous Mr. Borrell here, crawling out from under my rock. First off, we have a fairly solid basis to assess the local online publishing industry. Of the more than 9,800 entities we track, 77 are local independents who’ve been interested enough in helping both themselves and the industry by sharing their info. Second, we routinely conduct benchmarking reports for local media associations (3 this year for the Radio Advertising Bureau, the Television Bureau of Advertising, and the Local Media Financial Managers Association, and 1 later this summer for an association of independent yellow pages publishers.) In each of those reports, we’ve been critical — “look where you are. you can do better, by X amount.” Those who look at the data and nod tend to wind up doing better. Those who become offended tend to keep on doing the same thing. Hiss over, I shall now slither back under my rock.

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