Hyperlocal’s Sustainability Problem

Written by on October 11th, 2010

Hyperlocal is journalism’s latest buzz word. It’s also known as micropublishing or independent publishing. It’s the increasingly-studied online news and information ecosystem; a jolt in the creative disruption of traditional news media. Hyperlocal incorporates citizen journalism, social media and block by block reporting. First-time entrepreneurs are interested; so are large media organizations. Hyperlocal is organic, it’s innovative and it’s not sustainable. Not yet.

“We’re seeing an explosion of local online news startups across the United States,” reports Michele McLellan, a Reynolds Journalism Institute fellow who helped host a gathering of hyperlocal publishers at the Block by Block: Community News Summit held in Chicago in September. “Even so, sustainability is a key challenge for most news publishers.”

Micro-publishers have a passion for what they do, so it’s no wonder a focus on the business model takes a backseat to showcasing reporting or perfecting design. “Content is cool. Revenue is an after thought,” blogs Howard Owens, publisher of the independent online news site, The Batavian.

That thinking can create a vicious cycle: Without compelling content, sites have little chance of attracting a large enough audience to offer any saturation for potential advertisers. Without advertisers, publishers risk losing a key tool in their own sustainability.

A recent survey of local advertisers in Evanston, Ill., a mid-sized college town just north of Chicago, showed a wide gulf between local businesses that used one of the various media outlets (print and online) to advertise and the vast majority that did not. Most mom-and-pop shops – and that includes everything from restaurants and retail to artists and non-profits – go untapped because journalists aren’t sales people and small business owners aren’t marketers.

That’s too bad, because the two are a great match, sharing the same goal of attracting a loyal and local consumer or audience base to keep the ship afloat. Linking them could be a large part of the solution, according to Owens. If hyperlocal news sites are to survive and fend off attacks from large competitors entering the space like AOL’s Patch, Owens suggests joining forces with the local business community.

“Do you accept only locally owned businesses as advertisers? If you don’t, you should. You should make it part of your publicly known mission that your goal is to help locally owned businesses grow. If your site currently has ad network ads, including Google AdWords, you need to remove that code from your site right now. If you’re going to be beat Patch, you need to be all about local and only local.  And beat that drum as loudly and as often as you can.”

In the coming weeks, our Innovation Team at the Medill School of Journalism at Northwestern will continue to dig into the issue of sustainability in the hyperlocal news space. We’ll look at traditional news revenue models that have been successfully translated to online-only publishing and also new ways of thinking about monetizing hyperlocal. It might not be cool, but if micropublishers want staying power, it can’t remain last on the list.


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The Finale: Try Out Sourcerer

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After months of hard work from all 15 members of the Local Fourth team, we’ve wrapped up our final Business Cookbook, Final Report and Presentation. Our Context Management System, Sourcerer, is up in prototype form.

And we want you to read, watch and use our work. Here’s where you can find everything:

- Business Cookbook: “Sustaining Hyperlocal News: An Approach to Studying Local Business Markets”

- Final Report: “Reimagining Hyperlocal News: Searching for a Sustainable Future”

- Final Presentation, which is archived at this link.

- Sourcerer.us: finally, swing by the Sourcerer prototype. Get a feel for what we’re doing. You’re going to like it, we think. The Context Management System can be found at Sourcerer.us. And we’d love your feedback.

Also, if anyone out there in any aspect of the media landscape wants to try out Sourcerer on their website, we’d love to help. Send a quick note to Rich Gordon here: richgor (at) northwestern.edu

Delivering an Ad Sales Approach: Pay Attention to Language

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It’s hard to believe it, but local business owners, as we found in talking with them, are very sensitive people.

Not the kind of sensitivity that makes you want to watch “The Notebook” on repeat, but a different kind: the anger they get when being “sold” an online advertisement.

About a month ago, a few members from the Local Fourth Business/Revenue team ventured into downtown Evanston, Ill., to chat with businesses about their advertising preferences.  At first, this exercise was designed to add to our research – we were looking for more information about advertiser needs, a major portion of our final report and presentation.

What we found was a lot of built up anger – anger toward online advertising. One local business owner was so distraught that we used the words “online banner ad” on our written survey that he almost refused to fill it out. After a minute of calming and consultation, he finally agreed.

Despite all this angst toward the idea of spending money on an “online banner ad,” there was something interesting we learned by accident through this survey. You see, one option we asked business owners to rank was named, “Full-page sponsorship ads.” At the time, we semi-stole the idea off the Evanston Chamber of Commerce, whom was selling a form of advertising themselves under a package labeled in a similar fashion. We thought we could mimic the idea – turn the conventions of an “online banner ad” into something a little larger, slightly more prominent on a website that gave the impression of being more important.  In essence, as we understood it, a “Full-page sponsorship page” was nothing more than a slightly exaggerated ”online banner ad.”   Yet, as our survey results showed, business owners loved this concept.

Sales can sometimes center around perceptions. Learning the connotations and meanings that business owners dislike about a certain style of advertising on the Web could mean a big difference in a sales approach for a hyperlocal publisher.  When we set out to conduct out survey that day, we had no idea that we were going to learn this type of information – that language counts when classifying advertising on the Web.

This just goes to show how important primary market and advertising research can be for a hyperlocal. Taking the time to conduct this sort of thing that open up ideas that could help lead to revenue generation.

It has become the focus of the remarks we are planning on making during our final presentation this Thursday evening (which, if you haven’t already heard, is taking place at the McCormick Tribune Center Forum on Northwestern’s Evanston campus at 5 p.m.): Sometimes finding a sustainable revenue-generating model in a hyperlocal space is about putting aside what you think you know, and learning a whole lot of little things you never knew about a market. Sometimes, as we surely found out, information you weren’t looking for will arise – and become increasingly valuable.

Main lesson: pay attention to how advertising sales are perceived to local businesses.  Perception can be everything at times, and creating a positive relationship with businesses can lead to a fruitful, long-term partnership.

Something both sides can profit from.

Some Thoughts on the Cookbook

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The “money problem” for news organizations has remained unsolved for decades, and even more so for hyperlocal news organizations. Though our latest how-to guide, “Sustaining Hyperlocal News,” attempts to show and encourage hyperlocal publishers to conduct proper research and explore multiple revenue opportunities, it is by no means an ultimate solution.

When the quarter-long research finally culminated to this cookbook and I regained my consciousness, I reflected on our work and thought about the ever-so-elusive nature of the problem at hand.

As we saw first-hand at the Block-by-Block conference held in early September, there is a tremendous amount of academic research and attention being devoted to this problem… rightfully so, given the recent economic downturn of the journalism industry. But I believe that, while academic theories are generally true, no theory will ever guarantee success when you’re actually sitting down face-to-face with a business owner making that carefully worded sales pitch.

It’s really like learning to ride a bicycle – I can write a comprehensive book about riding a bicycle… I can go into details about the physics of momentum, the mechanics of human brain and the function of balance. But at the end of the day, reading this book simply won’t guarantee success when you pedal away for the very first time. In fact, I bet you will fall several times before you get it right.

With that said, I think there is an aspect to this money problem that is similar to riding a bicycle. You can read our cookbook many times over, but when it’s time for you to make that sales pitch, you need to be a skilled salesperson and not an academic (this is why in our cookbook, we also recommend hiring a full-time salesperson).

There is definitely an artistic aspect to the process of creating revenue, just like writing the content is an art in itself. There are few guides that touch on the technical part of writing, but you will ultimately develop your own unique tone and style. In the same manner, I believe that you will develop relationships with your hyperlocal audience and business owners over time in your own unique way.

Lastly, if you find our cookbook “Sustaining Hyperlocal News: An Approach To Studying Local Business Markets,” intriguing, please make an effort to attend our final presentation where we unveil an online hyperlocal product developed from our research.

A Week Away from the Final Presentation

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In a week, we — the Local Fourth team — will be making our final presentation in the McCormick Tribune Center Forum at Northwestern University’s Evanston campus.

It’s been a crazy several months and speaking for myself, I can remember the first few weeks of our project when we were coming up with concepts and ideas for our vision of the dissemination of hyperlocal news. I thought the 2010 Block by Block conference held at Loyola University near the end of September was a valuable event for us to go to. More than anything else, it gave us a first-hand look at how hyperlocal websites, in different markets throughout the nation, conduct their business on a day-to-day basis.

One of the main complaints about maintaining a site was figuring out to fund it, and that’s one of the things that the Local Fourth team concentrated on as we went about constructing a resource that could generate revenue. Another complaint at the Block by Block event brought up by was the issue of interactivity. Everyone knows about Facebook and Twitter, but the question became this — how do people use those social media tools efficiently to increase awareness about their sites and local communities?

By extension, what’s the best way to get everyone involved on a hyperlocal website and give them the community news that they’re looking for?

There were many more questions that were asked at Loyola, but I think the final presentation will offer a glimpse at some of the solutions we came up with when constructing our site.

On December 9, we’ll unveil our project to the public. After that, we’ll see if we’re on the right track or not.

Determining Paths to Financial Sustainability: The Release of Our ‘Cookbook’

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When I first stepped foot into the classroom where I would be embarking on my final quarter as a graduate student at Medill, you could say I was a bit taken aback at the mission statement of my capstone course: solve hyperlocal news on the Web.

Whoa.

Not that my classmates and I weren’t smart enough or up to the challenge, but come on – making hyperlocal news “work” online has been a hot-button problem in newsrooms and journalism institutions for, at least, the last 20 years. We’re going to somehow derive the magic key to solve it, make it financially sustainable?

Perhaps more daunting was the experience my classmates and I had at Block By Block, a September local media summit that featured hundreds of local news entrepreneurs still searching for answers to making their site financially sustainable. Some of these local news junkies were successful (I interviewed the editor of the St. Louis Beacon, a site that operated under a $1 million budget last year), while others were, well, not so successful (one entrepreneur expressed making as little as $500 in revenue every six months).

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About Our Business ‘Cookbook’

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Over at Local Fourth’s YouTube channel this afternoon, we have video interviews with Frank Kalman and Steve Melendez.

Kalman, above, a leader of the team researching business and revenue, discusses the process behind his team’s “cookbook,” which will detail the economics behind a local website like the one we’re building.

Melendez is one of the project leaders and a member of the technology team. He’s been dealing with the ever-increasing need for optimal communication between the technology and research teams.

Check out more videos at Local Fourth’s YouTube.

Damn You, Mark Zuckerberg!

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When we agree with something, it’s very natural to say, “oh yeah, I like that!” That phrase seems like something we all own, something that we all have a little stock in (like how all those Green Bay residents get a piece of the Packers, you know what I mean) when it’s said. But somehow, someway, Facebook has managed to take over those three words, and along with them, the thumbs up sign we all know, love, and hand out freely when we agree with something.

It’s nearly impossible to disassociate the “like” button with Facebook these days, and we’re feeling awfully strained just thinking of something similar to the phrase. In our project, we want to create a rating system, something that allows users to agree with statements and throw their support behind a particular answer to a topic. Sure, “agree” seems alright, but what sort of symbol goes with that?

We’ve tossed around a raised hand, a dog catching a frisbee, a smiley face, and the most recent, a flaming number (that indicates it’s a “burning question”). And I can totally get behind the “burning questions” idea, but during our usability testing our participants are seriously confused by the concept.

And I’m seriously steamed with the swashbuckling Mark Zuckerberg; we want our site to reflect community concerns, not look immediately like a Facebook offshoot. So I have to ask, hyper-local community, what other ways can you say “like?”

The Second-Second Story, or “Who Got there First”

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Back before cable television, before web reporting and ever-quickening newsfeeds, scoops could be easily heralded — the story either was printed in your daily edition or it wasn’t. If another newspaper beat you on a story, the proof landed on your doorstep in the morning.

A rival newspaper could always do a second-day story, showcasing that it, too, was on top of an issue.

But as our dissemination of news quickened, the second-day story quickly became the second-hour story. And the second-hour story quickly has become the second-second story. (It’s complicated, I know.) So it’s getting tougher to decide who got there first, right?

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Nearing the Finish Line

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Last week, the audience research team showed the most recent version of our website to a handful of Evanston residents. This week, we are taking things one step farther and conducting a handful of in-depth usability tests, which will help us gauge what needs attending to in the few weeks we have left in the quarter.

The most difficult part of these usability tests so far has been the length: typically, these types of tests should take no longer than 10 to 15 minutes. People are busy, and asking them for more time might keep them from participating at all. What’s great about this next round of testing is we’ll be able to ask several more questions, spend much more time with our interviewees and (hopefully) get incredibly detailed insights as to how Evanston residents feel about our product.

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We’re Almost There!

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Can you believe it? Nearing mid-November, already? It’s hard to believe, but time is moving by quickly, and the Local Fourth Business/Revenue team is nearing completion of its main deliverable for the project: The Business “Cookbook.”

For the last two weeks, the Business/Revenue team has been cramping down, putting the final touches and design elements on our business findings and recommendations for the hyperlocal news entrepreneur.

Our “cookbook,” designed to provide a new way of thinking about making money in the hyperlocal space, takes a dive into some new ways of thinking: put audience first and foremost, not content, use academic research methods to more effectively assess your business environment and make better decisions, hire an ad sales manager, take traditional print advertising to the Web – static ads, instead of rotational banner ads, and much, much more.

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