Rusty Coats on “Finding the right revenue solutions for your site”
Coats began with a short history, describing how the hyperlocal and community news sites are now on the same trajectory at the MSM when they first came online. The different media companies each invented their own way, wrote their own CMS, concocted their own ad platform. Over time came a move to some more common infrastructure, and a push to make money. He pointed out that while the MSM have been online for 15 years, they have only really been selling ads online for the last 3-5 years.
Working from the simply put premise that “money coming in has to exceed money going out”, Coats says that community news organizations need to first know their expenses and then look for sources of revenue to cover these expenses. By making a pie chart of your monthly expenses, you can easily understand where the money is going and how much income you need to generate to at least cover your costs.
Once you know your expenses, you can start looking at sources of revenue. Coats identified 6 core areas of income:
Ads are the for-profit mainstay, underwriting is typically the non-profit version. The 2 do mix, though, bringing different issues for the for-profits and the non-profits. Coats pointed that organizations that you are talking to may have different budgets for advertising and for underwriting, so even if the advertising budget has been emptied there could still be opportunities.
A great line from this: “you hear that advertising is bought and sold. It is neither: it is stolen.” Coats advises publishers looking to create ad income to look at the adverts running on you competition. See who they have, and then go have a conversation with the advertiser about the value of what they are getting and what you can offer.
Being able to hire a sales person is a big step. It had been previously mentioned that you will likely have to pay the sales person at a loss initially. A network of sites, sharing costs/revenue, will make this easier to make happen. To have a successful ad network across sites, there are a few things that the publishers need to be able to offer: similar placement of ads, and agreement on how audience is being measured. (At which point I shared the story of the Richmond Ad Network – shared space across 14 community blogs in Richmond, Virginia.)
Another Coats’ factoid: mainstream media is at best 70% sold on ad inventory.
- Foundation Grants
For the for-profits and non-profits, can be thought of akin to a subscriber for newspapers, or like the NPR model.
Hosting an event can be a good way to raise profile, bring in money, and forge a connection with a local business. Can be monetized meet-up (have an advertiser present), or maybe an event only for members/subscribers. Polly Kreisman of theloop shared a mixed success story: they partnered with a local French restaurant for a Bastille Day party which some buzz and income to both. The next year, however, Patch came in and theloop was out.
If you live and work online, you have skills and knowledge that you can teach local business owners. This process brings you to their attention and gives you a chance to make your sales pitch. Make their Facebook or Twitter better. Show them how to set up a free WordPress blog. Talk to them about the mobile space. Coats: more than 900,000 local business have pages on Facebook, maybe 700,000 of them are not doing it well. Under 10% of small businesses use Google Ad Sense, the remaining 90%+ are yours to go after.
National advertisers look for guaranteed placement, which is a struggle even for MS. National adverts deliver 4 or 5 times less income than you can get for the same space locally.
Two other sources of income were discussed, but these offer smaller or less known potential return:
- Products (plugs for other services)self-serve ads, auctions, coupons, classifieds. Coats called these “shiny objects” with low return.
Paper sales (The San Francisco Public Press sells a 28-page, ad-free paper), spot.us, syndication with other media.