Jul 8, 2010

A few words from our panelists

I’ve said it before and I’ll say it again: I enjoy speaking with fellow hyperlocalists about the challenges we face. It’s my reason for getting up in the morning. That and emptying my bladder. Both are equally stimulating, the former on an intellectual level, the latter on a physical level.

So it was with brainy interest that I spoke recently with Terry (whose real name I’ve obfuscated for privacy’s sake). Terry’s fighting the good fight, running a nonprofit investigative-news site in her state capital. But grants are tough to score and corporate donations have the potential to taint her organization’s objectivity, she told me. On top of that, the nature of investigative news calls for long-form and serial writing, not exactly page-view generators.

Terry has considered hosting meet-and-greet events to generate revenue, charging cover fees (or “suggested donations” in nonprofit parlance) for participants to nosh with influential people. Unfortunately, the costs to organize, advertise and cater such events take a serious bite of whatever slim profit is possible, she worried.

My suggestion: Turn these events into a double-whammy volume business.

First, the volume part. Instead of holding cozy meet-and-greets in restaurants and charging higher fees to cover food costs, it might benefit Terry’s organization to host panel discussions in large spaces. A college or private company might be willing to donate use of a lecture hall or conference room, and a local caterer can donate light refreshments (though food always makes post-event cleanup a pain). On top of that, politicos and corporate spokespeople are usually willing to spout their agendas for free when given the opportunity to serve as panelists.

Such a setup allows Terry to suggest small, palatable donations at the door from a larger audience. It also reduces her overhead: So far in this scenario, Terry’s organization has spent zero dollars on space, food and speakers, and has gained a per-capita cover charge. Sweet, huh?

Here’s the double whammy. Terry can record such panel events for later broadcast on her organization’s website, for download as a free podcast, or as audio or video content for paid syndication. Delaying a broadcast gives value to attending panel discussions in real time, but it also allows those not in attendance to benefit from the information presented.

Most of all, delayed broadcasts can drive page views (read: advertising dollars) to a site, especially if a discussion topic or panelist sparks heightened interest between the live event and the recorded show. That kind of action also increases a program’s syndication value.

One event, two sources of revenue. BAM! BAM! A double whammy.

For-profit news organizations can duplicate this, though it might be harder to find donated space and food. Still, I predict a private college would be glad to host an event in exchange for sponsor status and the appearance of an esteemed professor on the panel.

I hope Terry and her organization can reap some revenue from producing these or similar events, as they would benefit the host and audience members alike. For more information on keeping investigative journalism afloat, check out American University’s iLab. Keep running the good race, Terry!

Photo courtesy of Flickr user Stacie Joy for CTTC.

Jul 7, 2010

Getting mom and pop to go digital

Last spring, an advertiser with my now-defunct news site asked whether his restaurant should have a Facebook fan page. I told him yes, but my eyes burned an angry “hell yes,” and my foot ached to make contact with his ass for not already having a presence on the social-networking site. I also encouraged him to get his business on Twitter.

That’s when his eyes glazed over. “What’s Twitter?” he asked.

I tried my best to explain it: 140-character squirts of information broadcast to followers, who then might rebroadcast (or retweet) that information to their followers, and so on. My advertiser didn’t see its value; admittedly, I didn’t do a good job illustrating it to him. It just seemed like a lot of work that he didn’t really need.

He was right. Digital marketing can be a full-time job, or at least a labor-intensive one for a small, neighborhood business. Mom and Pop Shopkeeper can’t spare their first-born child to tweet daily specials or post notes on a Facebook wall. That kid needs to be at the register or on a bicycle making deliveries.

The Tribune Company stepped into this tough sell earlier this week and Gannett started in late May. But they’re onto something: Digital-marketing services are certainly a revenue stream that allows online hyperlocalists to leverage social-networking skills they already have (or at least should have).

Making this work means first educating small business owners on the value of Facebook and Twitter (I’ll toss in Foursquare while I’m at it). That can be done one-on-one during a sales call, or in a free presentation to the chamber of commerce or other local business groups. The goal is to introduce business owners to the concepts of social networking and not to instruct them on exactly how to use it. They won’t buy the cow if they can get the milk for free.

Next, it might mean scaling a digital-marketing campaign to fit a business’s needs and budget. A restaurant might have plenty of information to post on its Twitter and Facebook feeds, and such a business can use (and afford) the help of an online hyperlocalist to set up those accounts or create content.

Conversely, a corner convenience store might not have much to say, but one inexpensive “sponsored” tweet on a hyperlocalist’s Twitter feed can extend its services to an online audience.

I’ve had some success offering digital-marketing services to small businesses: I ghost-tweeted text and photos for a local crafts fair using that business’s Twitter account, and transmitted teaser tweets through my news site’s feed. I also convinced the restaurateur mentioned above to purchase tweet time on my feed, though as part of a larger display-ad package.

In the interest of transparency, each tweet appearing on my feed was labeled “sponsored.” Likewise, any mention of the crafts fair or that restaurant in the website’s content included some mention of them as sponsors or advertisers.

Digital marketing is a professional service and revenue stream that online hyperlocalists should consider, especially since Facebook, Twitter and Foursquare are well adapted to mobile devices. It’s an easy way to break into mobile monetization with existing technology.

Photos courtesy of Flickr user Jeremy Keith and Tommaso Sorchiotti.

Jul 2, 2010

It’s a small world after all.

On Thursday I attributed the failure of The New York Times’ hyperlocal project in New Jersey to a bad business model. Its reliance on unpaid labor meant there was no need to generate revenue, which proved to be its Achilles’ heel when the volunteers and student interns didn’t materialize.

I still think this model sucked, but it wasn’t just a bad business model. It was the wrong business model for that area. Here’s why.

To keep the New Jersey Local running, The Times would have needed a large pool of unpaid student interns. They have that for their New York hyperlocal sites, with more than 480,000 students in the City University system, which includes a J-school and at least two colleges with strong writing programs. CUNY’s J-school already mans the Brooklyn Local, while students from New York University’s journalism program will work the upcoming East Village Local in Manhattan.

The Local didn’t have that in its New Jersey beat, which covered Maplewood, Millburn and South Orange in Essex County. Seton Hall University sits in the middle of South Orange but has an enrollment of only 10,000 students. Nearby Montclair State University has 18,000 students, and the Newark campus of Rutgers University has 11,500 students. There wasn’t enough wiggle room for error or missed partnerships.

The take-home lesson from the New Jersey Local experiment is this: Hyperlocal business models aren’t always about scale. What works in a large market won’t necessarily shrink to fit a small market. Instead, hyperlocalists must put attention into their beats’ microeconomies. If a neighborhood can’t support a news outlet’s business  model, then that model needs revision.

For example, my former hyperlocal site’s business model relied on advertising revenue. However, my coverage area was underdeveloped as far as businesses and services go — advertisers didn’t exist, and The Great Recession didn’t help. On the flip side (and contrary to what was happening across the larger region), the neighborhood had plenty of homeowners’ associations unaffected by the mortgage crisis and very active in civic affairs.

My for-profit company spent three years trying to tap blood from the advertising stone. It would have been better off as a nonprofit funded through donations from those homeowners’ associations. Woulda, coulda, shoulda.

Scale does not equal sustainability or solvency. That goes for The New York Times and independent hyperlocal outlets. But an appreciation for what a neighborhood can support will go a long way.

Photo courtesy of Flickr user pillowhead designs.

Jul 1, 2010

Why did The New York Times fail in New Jersey?

As I’ve mentioned previously, I have a love-hate relationship with The New York Times — love the writing, hate the elitist aftertaste.

Thus it was with both sadness and schadenfreude that I learned Wednesday of the demise of its hyperlocal project “The Local” in northern New Jersey. Just like that, The Times pulled the plug on The Local’s coverage of Maplewood, Millburn and South Orange and dumped its archive on hyperlocal pioneer BaristaNet, Business Insider reported.

Why did The Times’ “experiment” fail in New Jersey when it’s met some success in Brooklyn and is expanding into Manhattan’s East Village? What happened?

The way I see it, the New Jersey Local was hit with a one-two punch as it swaggered out of its corner. First, the news site saw editorial turnover in December, twelve months into what would eventually be a 15-month run. It can’t be easy for any news enterprise to recover from that kind of blow so early in its operations.

More troublesome (to me, anyway) was its business plan. The website’s goal was to rely on volunteer writers and unpaid student interns for its content. The Times already leans on students from CUNY’s J-school and New York University to fuel its Local sites in New York, yet it couldn’t ink a deal with Seton Hall University, which sits smack in the middle of what was the New Jersey Local’s South Orange beat.

In the end, “it couldn’t find the right partnership,” Times associate managing editor Jim Schachter told Business Insider. On top of that, the Jersey website didn’t have the resources to hire a full-time reporter, Schachter added.

Of course it didn’t have the resources to pay a reporter. The Local had no intentions of paying its other contributors or student interns, and an unpaid labor force means no overhead and no need to create sustainable revenue streams. It never anticipated the need to hire someone when the volunteer pool ran dry and the student interns never materialized.

One might also make the argument that The Times left too heavy an editorial imprint on the Jersey Local. The Old Gray Lady has an uptight, institutional voice that works on Park Avenue but not necessarily on South Orange Avenue. Conversely, BaristaNet’s tone is more engaging and, arguably, better suited to local and hyperlocal coverage.

But don’t blame the Jersey Local’s demise on competition from AOL’s Patch affiliate. According to Compete.com, the Jersey Local had 19,635 unique visitors in May, compared with 7,745 for Patch’s South Orange site.

Image courtesy of Flickr user Zooomabooma.

Jun 29, 2010

The deal behind deal brokering

One revenue stream that piqued interest at last week’s National Association of Hispanic Journalists convention in Denver was what I called the “Groupon” model, or deal brokering. Oxygen deprivation prevented me from explaining it with any sense, but the words are finally coming together now that I’m back at sea level. Here’s how it works, according to the Nieman Journalism Lab:

Let’s say a neighborhood restaurant offers a prix fixe meal for $10 (obviously not a restaurant in New York City). Two hypothetical dollars go towards the actual cost of ingredients and food preparation, while the remaining $8 is profit.

Business as usual
But what if that restaurant wants to draw more customers on a slow night during the week, or perhaps over a holiday weekend? It can partner with a hyperlocal news outlet, which will promote a discounted price and broker its sale to a limited number of readers (or viewers or listeners). For that, the hyperlocalist earns a modest fee.

Special pricing
There are three important thing to remember: The number of discounted meals must be limited; the discount should be valid only for a limited time or on a specific date; and customers must pay for the discounted meals in advance. Promoting the discount can happen through the usual channels (online, in print or on air), or through an emailing list or Twitter feed. The hyperlocal news outlet also can use an e-commerce service such as PayPal to facilitate sales.

In this example, the hyperlocalist must broker four times the number of discounted transactions to match the restaurant’s net profit at the regular retail price. But the beauty of this revenue model is that there is very little work involved. That means a nice piece of change for the hyperlocalist with only a smidgeon of effort.

For the Twin Cities (Minn) Daily Planet, revenues from deal brokering actually surpassed traditional advertising sales in the first two weeks of its “Deal of the Day” program, the Knight Citizen News Network reported last week. My former news site also had success with a brokering program, though the cost of printing coupons eventually erased most of the profit. (Unfortunately, my program launched before Facebook and Twitter gained mainstream momentum, before the iPhone was born, back in the Stone Age.)

The numbers above are for illustrative purposes only. In fact, the Nieman Journalism Lab and Knight Citizen News Network articles recommend bigger paydays for deal brokers, and brokering services can be sold to retail businesses other than restaurants. Now go make money!

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