LION-Borrell Revenue Survey Unravels

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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.