Howard Owens is a digital media pioneer. He started publishing local news online in 1995 when very few local news outlets had web sites. The header image on the site depicts the film camera he used early in his career and the press pass from his year on the staff of the Carlsbad Journal. For more on Howard's professional background, read his LinkedIn profile.
HowardOwens.com is the personal web site of Howard Owens and covers his range of interests -- political localism and libertarianism, music and personal interests, as well as his professional interests.
Howard is currently publisher of The Batavian and lives in Batavia, N.Y.
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Monthly Archives: September 2010
There were moments at #BXB2010 in Chicago on Friday when it felt like a religious war was about to break out. At any minute I expected somebody to yell "PC" and somebody to answer "Mac! Damit!"
The clear divide in the room was over how to fund journalism. On one side there were the advertising-supported sites, and on the other, the donation-supported sites.
Some of the divide was expressed verbally — one participant got up and stated flatly that advertising is evil — and some of it appeared in the #bxb2010 Twitter stream.
My reaction at first was extreme irritation with the non-profit side of the room, but then I realized — there was also an incredible energy in the room. Here we had assembled some 40 or so independent publishers who were all putting their careers on the line to pursue a market some industry pundits, even today, dismiss as an digital-non-start: Local media.
A doff of my fedora to anybody willing to invest their resources and time into community journalism. It is truly doing God’s work.
This is what led to my little speech about the local community being the foundation of democracy. I tried to not make my remarks about non-profit vs. for-profit, but I did want to send a message to the non-profits: In your zeal to avoid the stench of commercialism, don’t forget the important role small businesses play in your community.
That said, I do think there is a problem with thinking the grant-funded, foundation-funded, donation-funded, non-profit model of journalism is somehow more pristine, more sacred and less likely to compromise journalistic standards.
I firmly believe the opposite is true, and here’s why:
- You can’t escape the stench of money or making a sales pitch to somebody somewhere, somehow.
- Don’t assume you’re going to do any better getting readers to contribute than you will do selling subscriptions. Chances are, they won’t.
- You’ve still got to sell yourself. Are you ready to do PBS-style pledge drives? Who’s going to make the telemarketing calls? Money will not just magically appear because you declare yourself a non-profit. No matter how much people love your journalism, only a small percentage will ever click the PayPal "donate" button. So, to get donations, you must make sales calls. There’s essentially no difference between selling an ad to a business and selling a person on making a donation, so why is selling an ad evil, but begging for a donation isn’t?
- Since you’re unlikely to garner a broad spectrum of donors and build a diverse donor base, you’re going to have to rely on a few key funders.
- Any large funder who gives you money is going to expect a return. Either they back your coverage as it is, and you better not change; or, they see a branding benefit to being a major sponsor, which carries its on weight on the credibility scale; or, they have an agenda. It might be that they simply want a good watchdog of government, but it might also be that they need you to get firmly behind public transportation because the donor’s real source of the money is a company that builds light rail systems. Some grants are explicit, in fact, about their issue-promotion goals. In one way or another, you’re selling your soul.
- Even if there is no obvious expectations at the time you take the money, such expectations — even expressed subtly later — might emerge. Or the source of money may be quite neutral for a long time, but then a pet issue comes up, and now you better bend to the donor’s will.
- Some donors simply come with baggage. What if you’re in a community where a large casino operation is based? They come to you and offer to fund half your operations. You may not see a conflict because they’re based outside of your exact coverage area, but a lot of people are vehemently opposed to gambling and will believe you are a compromised news source because of the gaming tie.
- You will have to have a board of directors. This board of directors is likely to be drawn from your community. Because part of the job of the board is to help draw donations and reassure donors, they will need to be leading citizens. Leading citizens always have other interests — whether they be tied to the political world or the business world, they will bring their own baggage. And some of them will not understand why you don’t bend your coverage to their personal needs.
- There’s simply only so much charity money available. Big corporations only need so many tax write-offs, and foundations are besieged by competing charities. Grubbing for money will get harder and harder as more non-profit news orgs emerge. No source of revenue is a bottomless well.
In summation, I don’t see how being a non-profit shields a journalist from conflicts of interest, ethical dilemmas or even outright advocacy on the behalf of key donors.
Now, we’ve all heard the stories of publishers ordering articles pulled to suit a particular advertiser, but in my experience, the publishers that cower in such circumstances are facing a much bigger issue than journalistic credibility. They’re main concern is corporate credibility, which is all about cash flow and profit margins. Nobody at Corporate ever looks at the journalism awards in your foyer or the community kudos for demonstrating an ethical spine. Corporate wants to know one thing: Are you meeting your numbers.
When you’re a independent news organization, the only numbers you need concern yourself with, truly, are paying the landlord and the grocer.
Since your source of revenue in the advertising model is an incredibility diverse group of small business owners, and each of these individual owners account for only a fraction of your overall revenue, you’re not facing much pressure at all from any one source of income.
There isn’t any one advertiser who could pull his ads from my site in a huff and threaten my business. As I point out above, that may not necessarily be the case for a foundation-supported, grant-supported non-profit news site. In the non-profit model, one major donor jumps ship, and the ship might sink overnight.
In the history of The Batavian, not a single advertiser has tried to influence my coverage.
Of course, I get requests, "can you write something up on my 5th anniversary?" or "can you see something about the Lion’s Club fundraiser?" but these are legitimate soft features or light community coverage anyway. I do try to fit them in, honestly, if I can, and when I can’t, I find advertisers understand.
That’s a far cry from the kind of ethical dilemma’s the non-profit crowd seems to believe that for-profit owners might face.
The fact is, the idea that advertisers are constantly meddling in coverage is a myth. The truth is, the small business owner has much bigger worries than how you’re covering the next election, or whether you’re making life hard on the mayor. He wants to know first and foremost: are you helping to add a few more ting-a-lings to the ring of his cash register.
So, my bottom line: I believe that advertising supported journalism — especially for the small, independent operation — is the purest, cleanest, best way to fund local reporting.
Terry Heaton has recently written a doomsday piece about the future — or lack of it — of advertising.
For nearly as long as I’ve been involved in online publishing, people have been predicting the death of advertising. And death may yet come.
But it’s not hear yet.
And we have a lot of aspiring independent publishers trying to figure out how to fund their dreams.
We can’t lose sight of the fact that, for at least right now, advertising works. When done right and done well, it works very well.
Also at #bxb2010 there was a lot of chatter about finding new revenue models, in part because of a distaste for advertising and in part because some people have bought into the idea that advertising has no future.
The problem for local publishers, though, is they have no future as publishers if they can’t pay today’s bills. They have no time for the rest of us to cast about for some creative, disruptive, forward-thinking way of funding journalism.
And that’s the meaning of the headline on this post: "For-proft, non-profit and ???."
Right now, all we know is either grub for donations or sell ads. Anything else is just a big, fat question mark. If you want to be in business now, question marks don’t pay rent. They don’t buy cameras, and they don’t even supply note pads.
The vital issue for the aspiring publisher is: Revenue now.
If the aspiring publisher believes the way to go is try and gather enough donations to at least keep a cabinet full of raman, well, God’s speed and God bless.
But there’s also no need to be scared of being a dirty capitalist, selling ads and trying to grow a profitable business. It’s a place to start. Only time will tell if it creates the next generation of media moguls or a whole new class of burned out half-wits scraping by on the public dole.
(Note: There are other business and editorial advantages to advertising, but that will have to wait for another post at another time.)
1. Keep it simple, stupid. The typical small business owner now knows the web is important and is even excited to get involved in web marketing, but he or she hasn’t had time to really understand the web. If you start talking with them about banner rotations, click-throughs and impressions, they will tune you out. You need to sell advertising in terms they understand, which means a flat rate for a given period of time (such as monthly). Most of your advertisers are used to buying ads from the local shopper (such as the PennySaver). That is a good model for how you should price and position your ads. I see a lot of start up sites using page designs modeled after newspaper sites, which means there is a limited number of ad positions and ad rotation. The typical small business owner hates rotation. When they hit your site, they want to see their own ad — every time. If they have to keep reloading the page to see their ads, they get frustrated. They start to question the effectiveness of their advertising on your site ("nobody ever sees my ad, because I never see it). You need to remember, you’re a start up. The business owner doesn’t know you, doesn’t know your business, doesn’t know if it will work. The lack of visibility caused by rotation only reinforces these doubts. Your page design needs to accommodate an unlimited number of ads so that every ad you sells appears on every page view.
2. It’s the relationship, stupid. There is a certain magical thinking I come across on the web that self-service ads will solve all of our problems. Selling and servicing individual advertisers is time consuming. Depending on your selling style, you might need to call on each advertiser multiple times to get a signed contract, and then you’ve got to build the ad and monitor its metrics. You also need to maintain regular (at least monthly) contact with the advertiser. It seems obvious: Self-service would be so much less time consuming. But, go back and look at rule 1: keep it simple, stupid. No matter how simple you might think your self-service web application is, it’s not simple enough for the busy small business owner who has neither the time nor the inclination to learn the web as well as you know it. Don’t think self-service will be your savior. It will be your doom. While selling and maintaining ads is time consuming, it’s also a chance for you to get to know your advertisers, and them to get to know you. You’re not really selling banner impressions. You’re selling yourself and your vision. Small business owners naturally tend to root for other small business owners. The small business owners in your community can be your early converts and your early fans. They’re the most networked people in your community. When they become your fans, it starts to create the impression that "everybody" in town is reading your news. That may not be the truth at first, but pursue this strategy and it soon will be.
3. It’s all about market share. The first thing you should do when planning your ad sales campaign is figure out who advertises the most across multiple platforms. Try to discern who has the best grasp of marketing. You also need to know who are the local business leaders — the local business owners other business owners respect the most. These are your HOTs (high opportunity targets). Go after these businesses first. There’s an old rule of brand building — associate your brand with other brands that people trust. You want to know what the best brands in your community are, and then make sure they become your first advertisers. If you have to discount your rate card by 75 percent to sign a HOT, do it. Sign the HOTs and at any and all cost until you’ve got five to ten of these advertisers on your site. The business owners who would otherwise sit on the sidelines will now be easier to sell. Also, the HOTs competitors will be more likely to want to not be left out. Further, having a lot of ads on your site doesn’t just help you sell more ads, it helps you build credibility with readers. If a new reader logs on and sees several local ads, he or she is going to know you run a site that is popular locally, and they’re going to feel more compelled to return. You should start selling ads the first day you’re in business, because selling ads isn’t just about making money; it’s also about building audience.
4. If you’re local, be local. If you believe in hyperlocal news, you should also believe in hyperlocal advertising. I think everybody who talks about hyperlocal news talks about it in terms of local-only news, no national news (readers can get it too easily elsewhere); rather, local means a keen focus on the defined local community. So, why, then, would a hyperlocal site put a national ad network ads on its pages? It’s beyond stupid. One of the great ways you can build a relationship with local advertisers is talk about how you are there to promote the local business community. If you’re simultaneously taking ad network ads (or admit a willingness to accept chain advertising), you’re undercutting your local-only message. Trust me, there’s more revenue to be made in hyperlocal advertising than diminishing that opportunity by displaying non-local advertising (local being defined as a locally or regionally owned business, not a national company and not a chain).
5. Don’t overprice your ads. There is a tendency to think that just because the local newspaper site is getting $15 to $75 CPM, your site should also get $15 or more CPM. You need to remember, yours is a disruptive business. You need to deliver more value at a lower price, especially in the start up phase when you’re trying to win trust. Your flat rate ad should be priced low enough that its a pretty easy decision for a small business owner to go, "What the heck, I’ll give it a try." (Of course, the price needs to be still high enough that when you sell out your target number of ads, you’re profitable.)
6. Don’t be afraid of metrics. if you follow the model of putting every ad on every page, you’re going to deliver to your advertisers a significant number of ad impressions. That number will be impressive in itself. But more importantly, for most of your advertisers, you’re going to send their sites more traffic than just about any other web site (save Google or Facebook). It’s simple math: a .03 percent click-through rate on 400,000 impressions gives an advertiser more visits to his or her site than 100,000 impressions (delivered in rotation — also rotation ads get local click-through rates) These are numbers that will demonstrate to most advertisers that their ads on your site are delivering sufficient results for the price you’re charging. Share these metrics with your advertisers. Even when the click-through rate is less than 1 percent, you’re still bringing more attention to their business than pretty much any other online marketing they might try (if your site is getting a good amount of traffic for your market), and you will have an especial advantage over any newspaper site competitor you might have (which is doing rotation, probably). This is one of the key benefits of the "unlimited inventory" model (as opposed to the "limited inventory" model most newspapers sell).
1. Be prepared for long hours. If you’re not prepared to work 14 to 16 hours per day, seven days a week, you’re not ready to start your own small business. You might not be able to put in that level of time commitment because you’re recently married, or working another job, or have kids, or just have too many other interests you want to pursue. I’ve known a lot of small business owners in my life, and most of them put in long hours even years after setting up shop, but all of them put in these kinds of hours when their businesses started. It’s not something that is unique to doing a local news start up.
2. Plan to keep your expenses to a minimum. Clayton Christensen, the world’s foremost authority on disruptive business strategies, says, "Be impatient for profits and patient for growth." The more expenses you take on, the harder it will be to obtain profitability. It should be your goal to achieve profitability within three to six months. The more people on your payroll — meaning the more partners you have, usually — the more revenue you need to generate. If you’re local start up consists of more than you and a partner, you’re probably over staffed. A spouse makes the best partner because then you really need to pay out only one salary.
3. Be prepared to be a jack of all trades. The skills needed to run a local news start up include, but not limited to, reporting, writing and editing news (plus photos and video), ad sales, ad graphics, marketing, community engagement (online and off), bookkeeping, some level of tech knowledge related to servers and content management systems,* the legal issues surrounding content publishing and business strategy and tactics. If you don’t personally have the skills, you need a partner who does. The skill sets of partners should complement each other so all bases are covered. It might be possible — if you have all these skills — to start a local news business as a solo operation, but as you begin to have success, you won’t be able to keep pace with the work demands. Finally, be a learner. You might have most of these skills, but you won’t have mastered them all. When I took over The Batavian, I realized that while I had some PhotoShop skills, there was a lot I didn’t know, so I bought books. I also studied advertising and revisited some of my sales training. I never assume I know all I need to know about what it takes to run my business.
4. Be able to think and plan strategically. Starting a local news business isn’t something you do just because you need a way to make a living, or just want to find a way to stay/be in journalism. If your goals are purely commercial, the crassness will show through and you will fail at finding opportunities to differentiate your business from your competitors. And no matter what your market, you will have competitors. You need to understand both the concept of competitive advantage and disruptive innovation. You need to know what advantages your business has over your competitors and how you are disrupting their tried-and-true business models. You need to understand why readers and advertisers will or do gravitate toward what you do.
5. Be prepared to have fun. To be successful, you must love what you’re doing. Running a start up business is hard, frustrating even some times depressing work. The news business is unique is that you will have hundreds of critics (which is also another reason why you need a clear vision about what you’re doing and why, so you can be confident of your course in the face of criticism). Your mistakes will be public. Your failures will be public. There will be times when readers publicly denounce you; and, for any of 100 different reasons that have nothing to do with your business, advertisers will quit you. There will also be days when you wish you didn’t have to work all day. You’ll miss your loved ones. You won’t be able to keep up with the latest movies, TV shows or music. You may not be able to go out of town for a friend’s wedding or a brother’s birthday. Starting a business is and must be the whole of your life. But you know what, running your own business is much better than working for The Man. And if you do it right, you will be treated in your community far better, with greater appreciation and adulation, than you ever received as a newspaper reporter, or any other salaried job. If you do it right, you will feel deep in your heart that you’re doing something meaningful and important, and that will carry you through any dark hours.
(Credit where credit’s due: Brad Flora’s post got me thinking along these lines).
Newspaper sites continue to fail at comments.
The latest poster child of the clueless approach newspapers take to comments is an otherwise very fine newspaper — the Deseret News.
The DN is going to limit people to only two comments per day per story.
They say they will allow only two comments per day per story, and comments will be pre-screened.
Their article announcing the changes telegraphs their cluelessness in the first sentence:
Newspapers have always had an interest in feedback from their readers. The primary source for this feedback, Letters to the Editor, has had a prominent place in newspapers for more than a century.
Comments are not letters to the editor. They are not "feedback." Such a notion indicates the Deseret News editors still view their roles as "we report, you read." Feedback is fine, but the idea of a conversation is completely beyond their comprehension.
Typical newspaper think.
Comments are conversation.
Comments are about engagement, both audience to audience, and news staff to audience.
Comments are about community.
Polices that subvert comments include moderation and posting limits.
While I naturally applaud the DN’s new real name policy, the DN editors again show they don’t understand comments by instituting this policy in order to bring more civility to comments.
A real names policy will not bring more civility to comments. The purpose of a real names policy is more ethical than comment quality. People using real names can be assholes as much as John Schmoe.
The only sane comment policy begins with the concept of management and leadership.
A newspaper the size of the DN must have a community manager, and reporters and editors must participate in and help manage comments.
Any other approach is doomed to failure.
If you’re a publisher unwilling to invest in comments and community, you should just drop comments completely.
However, if you do that, the next natural question is, why are you even publishing on the Web, then?