“Local doesn’t scale.” That truism was coined at the turn of the century, in the Stone Age of digital, when content management systems were Rube Goldberg contraptions — before newsrooms could plug into scores of public and private community information sources, when reporters had to keep scribbling away at meeting after meeting that might turn out to be a waste of time.
The truism was spectacularly confirmed in 2015 when AOL finally gave up on its Patch network of community news sites, which it had grown from five to 900 in five years, and sold a controlling share to private-equity firm Hale Global, which specializes in turnarounds. In its years of often-frenetic trying to disprove the truism, AOL lost between $200 million and $300 million.
Now, Warren St. John, who has led Hale Global’s Patch since the takeover, says the network is a model for scaled local news – editorially, financially and as a community asset. In this Q & A, he presents his case:
What new about today’s Patch?
The short answer is the whole thing. We have a new platform, a new CMS [content management system]. We have a new content-sharing engine that helps us send content around our network efficiently. We have a new iOS app that will get a pretty radical update within a month, a new Android app probably in November. We have integrated with Google AMP [“Accelerated Mobile Platform” to speed up page loadings], Facebook Instant Articles, Apple News and the Amazon Alexa platform.
We’re trying to solve a big, complicated problem at scale. One of the things we realized early is that a lot of costs and a lot of energy are consumed by the maintenance of silo-ed systems. There’s also an accumulation of technology that needs to be maintained and developed against. We realized that with one homogenous platform powering all of our local content, we could be a lot more efficient and scalable.
Where did you get the technology to do all this?
We built it ourselves with an unbelievable in-house engineering team. We built our platform to integrate with other platforms. We architected ourselves to flow content to every possible channel.
How long did it take you to make everything operational?
We’ve been working on it for three and a half years, since the spin-out from Aol. During year one, we basically tried to re-assemble some of the pieces from the old Patch into a new thing. The second year was, “OK, we’ve pieced everything together into a modestly well-functioning vessel. Now, let’s really work hard on developing a content strategy for scalable hyperlocal content.” That took us down the path of a lot of notifications to users and lots of breaking-news alerts, which are about 20% of our traffic.
What are your essentials for developing editorial content?
We make sure all our reporters are deeply plugged into all local public agencies, like government agencies and school systems, that issue information that could affect the daily lives of people in their communities. Number two, we avail ourselves or technology and tools for social media listening and use other strategies to make sure we have the digital equivalent of the old police scanners in all our communities. We have built out an information-gathering infrastructure to digitally monitor all the communities we follow.
When you acquired Patch in January 2014, what did you do about traffic?
Just before the transaction, Aol did about 20 million unique visitors monthly. After we took over, we bottomed out at about 8 million. What happened was that Patch went from 700 editors under Aol to 50. We also had to migrate off the Aol platform and launch a new website in four months. That website did not have a lot of the functionality that the old Patch had.
In year two, we started to rebuild our editorial infrastructure, hone our strategy, understand what was working and build out social and news gathering in all our communities. Traffic started to turn around — not radically, but it was going up. People weren’t quite rooting for us yet, but they were checking out what we were doing. While we may not have started getting “better,” we stopped getting worse.
It helped that we could pick up a lot of editorial talent. We have reporters from the Boston Globe, Des Moines Register and a Polk Award winner from the Baltimore Sun. The reporting and writing got better.
Talk about what happened in year three — 2016.
We started rolling out major technological innovations that helped us do things much more efficiently. We built an internal content distribution system that allows us to share relevant stories across multiple Patch communities.
We also started doing some pretty radical things in new communities. We tested Boston and Chicago Patches to reach people who didn’t live in Patch towns within those urban regions. That worked and now we now have metro Patches in the top 100 DMAs [designated market areas] in the country.
How many reporters and editors do you have in your 1,200 communities?
We have 1,200 communities, but we actually cover 800 to 850 with some form of daily local coverage. In new communities, like Chattanooga, we’ll open a site with an event calendar and boards. The old way was people would type in their ZIP Code, and probably 80% would be told, “Sorry, there’s nothing for you to see.” Now, users can register, post and we can update them when we put editorial resources in their communities.
There are about 50,000 communities with a population of at least 15,000. Do you plan, over time, to be in all of them?
Absolutely. Our stated mission is to have a Patch everywhere.
We started with a hub and spoke model. We open with a metro Patch, and then go to four to six, maybe seven, local Patches around that metro. We hire an editor, maybe a deputy, for that cluster. We build audience and then add resources as we grow audience. We’re not making big, reckless bets. In 2017 so far, we’ve hired 34 reporters, and they’re all top-notch professionals.
What’s your total editorial staffing right now?
We have a full-time editorial team of 110 and we also have several dozen freelancers and contractors. They produce about 1,200 articles daily across the network, some of which are published in multiple communities.
How well does this team cover its communities?
We’re nimble. The proof is in the pudding. If you flip through Patch towns, I think you’d be astonished at the volume, quality and granularity of the local coverage. We do that every day all over the place. It’s a daily miracle. [Check out coverage by Las Vegas Patch of shooter Stephen Paddock’s massacre of 58 people at a country music festival in Las Vegas here.]
Do you think Patch has created a new model for local news?
The local news industry is adjusting to the new realities of digital. The old print model is just not economically viable anymore. What we’re doing is scrapping and hacking and grinding and some days dancing our way to a new way of doing local coverage. What’s exciting about it is we get a little better every week. Unique visitors are up to 27.5 million monthly, a 25% increase over last year.
The Patch today is completely different from the Patch of even one year ago. As long as we’re in the mode of always betting better, then it’s working. It’s exciting. It feels like we’re building something. Our team has bought into it. We all have confidence that we’ll be able to be better next month than we are today.
What role do your users play in contributing content?
Our users are vital to our network. First are those who post on our announcement boards. Second is a “blessed” tier of validated users, like libraries and government offices, which post directly to sites. Third is a tier of professional writers with a journalistic background. Some are compensated and others promote their expertise to potential customers. What’s exciting from a revenue perspective is that some of these user contributions go to our suite of scalable platform products, like job listings, promoted events and featured announcements.
What about Facebook?
We’re very active, and have a great relationship with Facebook and its news team. They have made a concerted effort to figure out how they can support local publishers. By the way, we’ve added a million Facebook followers in the last year.
We rely on distribution systems like Facebook and Twitter and the Amazon Alexa platform to get our content out to the world.
Is Patch profitable?
We’ve been profitable every month for 14 months. We’re on pace to make money in 2017. But we’re not running the business at this point to make money, but to invest everything back into the business to grow it. Our revenue for Q3 2017 is 30% ahead of Q3 2016.
Who are your advertisers and how do they compare in revenue generation?
There are four categories: There is the “do-it-yourself” platform that includes job listings, promoted events and featured announcements serving the smallest customers. It’s the smallest in revenue share, but fastest growing. We also have inside sales and a national agency sales team. Programmatic is the biggest piece.
When you have a problem at one site, how do you respond?
Let me recast the question. What do we do when we find good news we weren’t expecting? When we see good things happening, we dive right in. When things are working, we roll up our sleeves and say, ‘What’s going on down there?’ And we push these learnings out across the network.
We have nine regional teams. We’re establishing best practices for SEO [search engine optimization], social, image selection, headline writing, email, breaking-news strategies. It’s fun and it creates a team culture where all try to help each other out.
If we see something in the data that may look like a red alert, we’ll go to the manager of the site, and he or she will say something like, “The editor is in the middle of this really big story that’s coming out tomorrow morning.” We’re comfortable playing the long-term game.
“User experience” is the big buzz phrase. What does it mean at Patch?
It’s critical. In our first year, we definitely had to make compromises to keep the lights on. Once we stabilized the business, we made some tough decisions and said, “OK, we’re going to take some ad units from our pages to give a cleaner experience to our users.” We think we’ve found a good balance between ads and editorial content on the page.
Is digital local news getting to the point where it is perhaps surpassing the “golden” age of print?
People crave local news and information. It’s not just an appetite — it’s a craving. The more of it we can get to our readers, the more they reward us with engaged time, traffic and return visits. There are a lot of Patch users who never knew a time when there was a daily local newspaper in their community. Our focus is not what used to be, but what can be.
How actively does your owner, Hale Global, get involved in Patch?
We have been lucky to have owners who believe in taking a long view and building strong sustainable businesses. That’s given us room to make mistakes and learn.
Do you see Patch as a model for local and community news?
I know it’s true because I see it every single day. Let me tell you about my own experience – not as CEO of Patch, but as a Patch user. I live on the Upper East Side of Manhattan. We opened a Patch there last year and it has completely transformed my understanding of my neighborhood. I know what’s happening around community issues, about new restaurants, and old ones I like that are closing. I know what my city council member is up to, get transit alerts and learn when there’s a new opening at the Metropolitan Museum of Art. I’m more connected to my community now than I was before Patch arrived. We’re doing that in hundreds of communities across the U.S. every day.