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.

Over the past two weeks, we (the business team) concentrated our efforts on aggregating and shaping our findings and methods into a “cookbook” — basically a step-by-step guide for other hyperlocal publishers (or wannabes) to develop a viable product and then make money with it.

Of course, it’s easier said than done. This issue of generating revenues off any form of journalism has been dealt with for decades, and needless to say, nobody has yet come up with some kind of shocking solution that propelled us into the next generation of media business models.

So what does the cookbook do? We certainly don’t intend to solve the great mystery overnight (or in 12 weeks), but this cookbook should be accepted as another contribution to the ongoing research that the media industry is pursuing as a whole. In addition, I wanted to point main philosophy that underlies this cookbook. Read more »

As we’ve said before in our previous research we found that many of these legacy businesses want something simple when it comes to advertising.

Something uncomplicated and easy to choose from would be offering packages. The question is, which packages will they choose? And how should we put together these packages? What will go in them?

We have listed numerous ways for monetization—Twitter posts, Facebook blasts, business spotlights, videos, sponsorships and more—all of which we believe to be advantages for these businesses. Another problem is some of these businesses might not understand them or just are not interested.

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Reviewing the responses from the initial round of interviews, it’s fairly evident that the presence of national chain brands in the hyperlocal business environment definitely creates a tough competition for the local mom ‘n pop shops.

It’s actually unsurprising to find that the majority of the respondents, when it comes to retail stores, simply choose recognizable brands as opposed to trying the local brands. This is largely in part because many don’t do heavy shopping in Evanston (especially when you can go to Chicago for that) and local consumption is limited to basic necessities like grocery. And when it comes to something as basic as grocery, the local brands cannot really offer something special that the national brands like Jewel Osco or Whole Foods can. In fact, to the contrary, I would argue that the national brands are able to offer a wider selection of items when it comes to basic necessities.

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With week six now upon us, the Local Fourth business/revenue team has kicked into full gear with some great features and recommendations for our product and final report.

As both Lori and John blogged about last week, we’ve come up with two key feature ideas that we believe will generate solid traffic to our Web product, setting the table for some audience-based revenue opportunities down the road.

As the Local Fourth team has preached from the start, audience is king. The Local Fourth audience team has done an absolutely outstanding job mining all of our research data and creating target “personas” for this project.

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This week we’re making our first dent on the final report. Findings and research reports are due from each team today. Most of the team member bios and pictures are in. Tomorrow the class will vote on the cover page for our program. For now there’s no title since we don’t have a name yet for our product. “Wikinews that works” probably isn’t the best idea for a name. I’m sure we’ll come up with something before the month ends.

As for the business team, we’ve created a “cookbook” outline for what we will recommend. We hope to have an elaborated draft by Tuesday. We have a handful of revenue options that can also help the site gain branding and identity.

One is a coupon bank. It is actually a pretty simple idea. One of the pages of this product there will be a page of coupons. What we will do is go to the businesses that already have print coupons and have it online. Plus, e don’t plan on charging them, it’s like free marketing. We would also like to keep these coupons straightforward and uncomplicated.  Groupon is too hard for some of the legacy businesses to wrap their heads around.

Our personas won’t have to wait until Sunday for deals to come, they can go online and print. This is just one way to get more people onto the site and gain popularity.

The rest of the business team will look at examples of other cases that have done this and measure its success.

Last week the business/revenue team of Local Fourth spent a considerable amount of time clashing with the technology development team. The issue: Does creating a product that drives traffic to stories published on other local publishing sites create an advertising roadblock?

Our thinking was that advertisers wouldn’t feel inclined to pay for ads on our site when we were driving traffic to other sites where their ads already appeared. The tech dudes were thinking our product would be so popular – considered a “hub” of the hyperlocal news market – that advertisers would eventually put more value in putting ad dollars in our wallets.

The tussle ended in a fist fight, and the tech dudes won – just kidding!

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