Mar 22, 2010

When content becomes free advertising

While pulling together an editorial calendar for my next hyperlocal venture (read: watching the NCAA basketball tournament) last week, I received a tweet from a DC-area marketing company. They were holding an event in my old beat, and I assume the tweet was meant for me to retweet or somehow mention on my now-defunct hyperlocal site in Maryland.

I ignored the tweet. But it reminded me of a big challenge I faced with my former publication: When does announcing an event for the readers’ benefit become free advertising for the event’s organizer, and at what point does one cut off that event organizer and demand payment?

One can make the argument that any mention of such an event constitutes free advertising, and I resigned myself to doling it out in my publication’s popular event calendar. The fact was, there wasn’t much fun to be had in my beat, and I felt obligated to let readers know of any action in the hood.

Generally, I was happy to mention a charity fundraiser or an event that charged no admission and still provided free nosh. But there were many instances when a commercial venture (usually a restaurant) would ask to list a special performance or tasting menu at their venue. I omitted such events from my publication’s calendar and replied to the solicitor with “Care to buy an ad?” And then I wouldn’t hear from that event sponsor again until they had something else they wanted me to plug for free.

There was also one event organizer (owner of the neighborhood’s only bar) who ignored my sales pitches and plugged her bar’s events under the website’s comments section. At first I just deleted her unpaid advertisements and replaced them with a note to readers that “This comment has been deleted.” But after a while I began leaving notes that said, “Please pay for advertising.” We played this game for three years, and the bar owner never bought an ad.

(In fairness, there was no animosity between us. The bar owner and I knew it was just business, and she was always hospitable enough to invite me to closed-door events. Of course, subsequent coverage of those events only meant more free advertising for her business.)

Where does one draw the line? More importantly, how does one convince event organizers (and other potential sponsors) that paying a hyperlocal publisher for ad space is worth the money and effort?

Photo courtesy of Flickr user Chris Blakeley.

Mar 15, 2010

Putting hyperlocal advertising into context

While I crack the mystery of financing my next hyperlocal venture, allow me to enjoy the distraction of its potential selling point: contextual advertising.

In the parlance of mainstream media, contextual advertising means partnering an ad with a related piece of content, Kathy Best, managing editor with The Seattle Times, described last month during a NewsU.org webinar. For example, an ad for a cruise line might appear with content on travel, or a restaurant might advertise alongside foodie content.

The most exciting thing about contextual advertising is this: News consumers respond more strongly to advertisements that have a local spin to them, Best found in consumer surveys. For instance, a local travel agency’s ad may get more attention in the travel section than one for a big cruise line. In this case, context has more to do with location than content. Score one for hyperlocalists!

But to make local (and hyperlocal) ads successful for sponsors, context must be coupled with customer service, Best indicated. The ad must do more than just announce the sponsor’s presence in town — it’s got to connect the consumer directly with the sponsor’s services. An advertisement might encourage consumers to order goods immediately via phone or online. Or it could promote a weekly special, giving the ad context in time (double booyah).

Best’s recommendation supports something that CUNY J-school’s Jeff Jarvis suggested previously, that local businesses aren’t interested in advertising their presence to consumers who likely already know they exist. Instead, contextual and service-oriented ads allow local advertisers to build on existing customer relationships by offering more (or at least different) services.

It’s a strong sales argument for why the local dry cleaner (the one who’s been around for twenty years and whom everyone knows) should advertise with hyperlocal media. Even if the advertisement provides only the dry cleaner’s telephone number, it’s one more extension of customer service that can drive repeat business.

There are some dangers to contextual advertising, Best warned, mostly having to do with the placement of ads with hard news. A media outlet shouldn’t place a politician’s campaign ad alongside content about his or her rival, unless one’s goal is to draw that outlet’s objectivity into question. Instead, contextual ads fare better when paired with soft news — food, travel, sports, and news that won’t strike a nerve, Best suggested.

Shuffling ads with content may get cumbersome for small outlets, especially for online publishers who rely on fixed templates. However, there might be tools available to help with that. (I’ll explore that in a future post.) And if an advertiser’s location and the timing of special offers are emphasized, then perhaps the ad’s coupling with relevant content might not be so important.

Photo courtesy of Flickr user FadderUri.

Feb 19, 2010

The farm report

I love following the news business as much as the next guy, but sometimes it’s nice to catch up on other industries such as — oh, I don’t know — organic dairy farming.

In Dutchess County, NY, small-scale organic dairy farmers have formed a nonprofit cooperative that allows them to bypass the middle man and market their goods directly to retailers in New York City. So far, the arrangement has allowed eight family-owned farms to earn more than the going rate while staying competitive with industrial farms, The New York Times reported earlier this month.

That got me thinking: If a hard-hit industry like family farming can make money through a cooperative, then why can’t hyperlocal news outlets do the same?

For example, several extremely good hyperlocal sites dot the Washington, DC region. As independent operations, they would probably do alright in terms of advertising sales, assuming they have the sales staff and the interest to follow that revenue stream. (Some of them do not host ads. Whether that’s by choice is not known.)

But if these organizations were to form a collective advertising venue, they could probably draw large sponsors — regional chains come to mind — and charge higher ad rates for the wider distribution. The effort required to sign those sponsors can be shared, with a finder’s fee going to whomever seals the deal and a standardized rate for those who host the ad.

At the same time, the individual outlets can avail themselves to neighborhood mom-and-pop shops and charge a lower rate for hyperlocal distribution. In this case, there would be no profit sharing among members of the cooperative.

Of course, advertising networks catering to hyperlocal outlets are already out there. At least three of them contacted me yesterday after CUNY J-school’s Jeff Jarvis retweeted a link to this blog. I don’t know how these networks operate, though I’m sure they’d be happy to explain. But if hyperlocalists can cut out the middle man, then why not snip away.

Photo courtesy of Flickr user scpgt.

Feb 18, 2010

When Big Box meets hyperlocal news

After years of trying to conquer the earth, big media companies are starting to look at the “untapped” hyperlocal market to save their empires. Just yesterday, Business Insider reported that AOL will expand its existing Patch hyperlocal network from the previously planned 30 to “hundreds” in 2010.

AOL isn’t the first big box to move into mom-and-pop territory. The New York Times and The Los Angeles Times run hyperlocal news sites, and national news startup Politico is branching beyond Capitol Hill into Washington’s other hoods. Good for them, and good for the neighborhoods they’ll serve.

(Full disclosure: I spoke with Patch’s editorial director last month about the network’s expansion into my area. He couldn’t give me a job for reasons unrelated to business, but he did offer to take me around the company’s New York offices. Gee, thanks.)

But is big media’s venture into the neighborhood good for existing hyperlocal news sites? I’m leaning towards yes. Here’s why.

First, it creates paid job opportunities for hyperlocalists. In the case of Patch, the editors in charge of individual sites will receive a salary — don’t know how much, but a work-from-home staff job beats entrepreneurial burnout any day of the week. I only hope these editors and other content contributors receive a fair wage for their work.

Second, it has the potential to establish a profitable hyperlocal business model that others (read: me) can rip off. AOL has an army of MBAs crunching numbers to make this work. Let them sort it out and prove to sponsors that online hyperlocal news has value. I’m not too proud to surf in their wake.

Third, competition is good for business. Sure, big boxes like AOL have the sales staff to generate revenue and support editorial operations. But sponsors are always looking for an alternative, one that makes the same personal connections that fuel mom-and-pop businesses. And it doesn’t hurt to offer lower (but not too low) advertising rates and social networking opportunities.

If big media calls with a buyout check or job offer in hand, take it. And if they don’t, bury them.

Photo courtesy of Flickr user six steps.

Feb 10, 2010

Those who can, do. Those who know, sell.

This week, the publishing powers that be put their noggins together in New York to discuss strategies for tapping into the local online advertising market. I didn’t attend the conference (couldn’t afford it, even with the advertised $400 early bird discount), but information made its way out thanks to PaidContent.org and blogging participants.

One of the conference’s presenters, Jeff Jarvis, is a big proponent of entrepreneurial journalism and posted on his blog some very good points on what local advertisers want (and need) from hyperlocal news outlets. Advertisers want help with search-engine optimization and social networking. They want their ads to appear across a network of hyperlocal outlets, Jarvis wrote.

But what local advertisers need is an education in “the value of the internet itself,” Jarvis argued. Too true, Jarvis. Too true.

Sure, I’ve had local business owners ask about monthly visits and readership rates, but that’s where their comprehension of web metrics usually ends. (Who knows if they even get what that information means.) I’ve also had a few ask whether their businesses should be on Facebook, usually followed with an admission that they don’t know what Facebook is. Twitter is a foreign word.

These moms and pops are small retailers, restaurant owners, dry cleaners — they don’t have marketing staff to keep on top of trends in online advertising. But as confused as they may be about the internet, I’m equally stumped when it comes to explaining the internet. Yeah, I know what Twitter is and how best to use it, but I can’t convey why it makes a great marketing tool.

Those who can, do. But those who know how to explain things to small business owners with little comprehension of online advertising, sell.

What entrepreneurial hyperlocalists can use are elevator pitches on what these online tools do, and why a local business owner needs them. (Jarvis suggests doing that through seminars.) With that out of the way, hyperlocalists can finally get to why a local business owner should advertise with their news outlets.

Photo courtesy of Flickr user jsrcyclist.

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