A project of Democracy Fund

September 13, 2016

Regional Ad Network Seeks to Help Hyperlocal Publishers Hunt Bigger Game


franks-pizzeria

By Chris Satullo

A local news site cannot live by pizza ads alone.

It’s a lovely thought: Sustain a relentlessly local journalism enterprise by selling ads to the local merchants that serve the same community the website covers.

Lovely, but impractical.

In the real world, marketing dollars are scarce on Main Street, and some older merchants remain reluctant to spend them on ads they can’t touch, clip out, or post on the window.

Most local journalism entrepreneurs find they simply can’t pay the bills by “rolling up nickels” from that kind of Mom and Pop ad base. And many of them resent all the time it takes to chase down and seal those small-bore ad contracts, not to mention the need to help many small merchants design their ads.

These are hours most journalists would rather spend covering news.

So, you might suggest, hire an ad salesperson. Ahh, but the revenue stream is just too meager to support a skilled sales professional for enough hours to make an impact.

How to elude this Catch 22?

New Brunswick (N.J) Today, a digital community news site founded in 2011 and racking up 150,000 to 200,000 page views a month, is trying to do that in multiple ways, experimenting with how to build sustaining ad revenue while staying true to its local DNA.

Its first big innovation was a retro move. In 2013, it launched an occasional print version, to satisfy the traditionalists among its readers and ad buyers. The gambit has worked to a degree.

new brunswick today newspaper box

Its latest effort, fueled by a grant from the Geraldine R. Dodge Foundation in partnership with Democracy Fund and the Knight Foundation, is to create a “cross-selling coalition” of like-minded news outlets in one region. New Brunswick Today used the grant to hire an ad salesperson tasked with the mission of teaming up with other local news publishers, digital or print, to perform a regional ad sales network. The goal: Pool enough eyeballs to entice bigger regional entities to buy ads.

What kind of entity? Sean Monahan, News Brunswick Today’s publisher, can swiftly run down the list of the kinds of regional businesses from whom he’s struggled to get callbacks: Hospitals. Colleges. Theaters. Supermarket chains. Car dealerships. Groups running franchise restaurants, or hotels. Big real estate firms.

“When you’re selling to a pizza parlor, it’s not hard to find the decision maker,” Monahan explains. “But with these regional businesses, decision making doesn’t sit with one person, but multiple executives. And these things happen on an annual scale — with a lot more planning. The cost of getting the transaction to happen … well, for a lot of advertisers we’re too small to even be worth the conversation.”

But say you could pitch those same executives on behalf a cohort of local publishers, with a large and loyal combined audience that maps well onto a coherent regional market — for example, New Jersey’s Monmouth and Middlesex Counties. Then, your cell phone might light up with more return calls.

Monahan’s hope is that within a year New Brunswick Today can build out a big enough regional network that ad revenue alone can cover the $6,000 a month it takes to sustain the news operation. Nowadays, foundation grants and an annual crowdfunding appeal to readers do as much as ad revenue to keep the site running.

The leading edge of the pitch to regional advertisers will of course be the business case: This is productive advertising well-targeted at your core market.But Monahan also claims his site offers a less tangible brand benefit:

“Our case is that people who read us have a deeper connection to us than to other papers,” Monahan says. “So being with us also is way for a business to send a signal to their potential customers that they care about the town as well.”

The $30,000 grant, part of an ongoing Dodge Foundation effort to help hyperlocal publishers develop sustainable business models, arrived in May.

The first big step, on July 1, was to bring onto full-time status Mark Welsh, a salesperson with experience at Yelp and Trulia and someone well known to Monahan and editor Charlie Kratovil.

Welsh is working simultaneously on two fronts:

  1. Trying to entice partners to join the regional ad network (the goal is 10 partners in the first year.
  2. Reaching out to regional businesses to make the case for buying local, even if for now it’s only New Brunswick Today.
Editor Charlie Kratovil and Publisher Sean Monahan, New Brunswick Today

Editor Charlie Kratovil and Publisher Sean Monahan, courtesy New Brunswick Today

So far, just one ad network partner, the Highland Park Planet, has signed on, but conversations continue with others in central New Jersey, including two Rutgers University outlets, the Daily Targum and Muckgers, and Reporte Hispano, a Spanish language newspaper serving New York metro suburbs.

Kratovil said the potential partners are “intrigued,” but the talks proceed slowly as the parties haggle over revenue splits and await decisions from “higher ups.”

Ad sales for New Brunswick Today by itself did perk up in July, coming in at around $3,600.

Welsh gets a mix of salary and commission.

The deal he’s pitching to potential news partners is a 50–50 split of net revenue, after his compensation is covered. Besides bagging some regional accounts, Welsh wants to sell as many of his existing advertisers into other publications in the nascent network, and to coax those publishers to offer their core clients a chance to be on New Brunswick Today and other partner sites.

Advertisers are not being sold clicks by the thousand, a once-dominant digital advertising model that never made a lot of sense for small community publishers. They’re buying monthly sponsorships that get them exposure on the web, on New Brunswick Today’s active social media channels and, oh yes, in that print edition.

“The print edition definitely helps us sell ads,” says Kratovil, the editor. “It cements the deal. There’s a print deadline that has to be met, so it keeps us on a cycle. And it makes it more clear to the advertiser what they are going to get.”

Kratovil, who also helped launch PatersonPress.com, said he realized in the early days of building his hyperactive hyperlocal site that print still had a purpose: “I kept running into older readers without computers, and they’d ask me to print out my articles and bring them to their house.”

His team has been producing four print editions a year, on a not entirely reliable schedule (this ink on paper stuff is a lot of work), but Kratovil would love to go to twice monthly next year once the ad network is up and humming.

The grant sets a goal of adding a partner a month. So it’s early and there’s a long way to go.

Monahan isn’t giving up his day job as a web developer just yet, but he’s optimistic: “We’ve got a year, with this grant. We’ll keep working out in concentric circles from New Brunswick and see how it goes.”

Chris Satullo is a media and civic engagement consultant who has worked in newspapers and public media. He was a Local News Lab Fellow.