Professionalizing ad sales yields revenue gains for news startups

I wrote a study of best practices for advertising sales at news startups for the Tow-Knight Center for Entrepreneurial Journalism at CUNY. Here is a post I wrote summarizing key findings, originally published by Knight Digital Media Center at USC Annenberg.

A new report I wrote for the Tow-Knight Center for Entrepreneurial Journalism at CUNY underscores the value of professionalizing ad sales operations at news startups. The report details a number of practices that news startups have either developed or adopted from traditional media. In this post, I highlight three:

1. Professional sales staff

Hiring a sales rep or bringing on a partner to focus on revenue may prove critical to many operations. It is challenging – good sales people are in high demand and compensating them adequately is a stretch for small sites. But the inability to recruit and retain a good sales person may doom a site.

Ask David Boraks, who closed his two local news sites in North Carolina earlier this year.

“Finding a full-time sales person earlier would have made a difference,” Boraks said. “We tried. We couldn’t find the right person who could work for us for what we could pay They were six-figure persons. The other (sales) jobs around here are that. We can’t afford that.”

By contrast, multiple sites in the study, including Riverhead Local on Long Island, N.Y., and Noozhawk in Santa Barbara, Calif., reported revenue increases when they took steps to improve their sales operations.

2. Realistic rate structure

A rate structure has to reflect revenue requirements of the site and it should be consistent

Kim Clark, vice president for revenue development and partner at Noozhawk said a structure (outlined in a rate card) gives the sales rep has something to share with potential advertisers and set the value of the site. Without a rate structure, “everything is up for negotiation,” Clark said, which is time consuming and makes it harder to track and hit revenue targets.

Clark said the rates have to reflect revenue needs of the site. “You have to stick with an average rate that’s going to get you into the black. Sure, it’s great if you’re making a lot of sales. But at end of the day what does your profit margin look like?”

3. Avoid CPM pricing

Successful sites have developed a following that enables them to charge premium rates. Most favor multi-month contracts. That time frame means the ads have time to work in raising advertiser visibility in the community and it means sites are not constantly reselling inventory. 

Long-term contracts assure that “you’re not always reinventing the wheel” in reselling ad inventory, Clark said. “They are advertising long enough to see if it’s effective.”

Noozhawk, charges $1,450 a month for prominent display in high-traffic sections of the site and $165 to $600 a week for run of site advertising, depending on prominence and size. Third Door Media, with its audience of 1.4 million unique monthly visitors, charges $4,000 per week for daily advertising across its network, which includes multiple sites and newsletters. Search Engine Land also offers CPM pricing at rates ranging from $25 to $60 depending on size and placement.

By contrast, sites that rely mostly on CPM (cost per 1,000 impressions) or network rates, struggle.

Budget Savvy Bride, for example, averages $3 per CPM against an audience of 82,000 unique visitors. She Finds, a fashion site, has seen its rate through the Glam network fall as low as $2 against 1.5 million uniques..

News startup survey: Revenue growth, capacity challenges

I continue to update my database of promising local news startups, Michele’s List, with support from the Tow-Knight Center for Entrepreneurial Journalism at CUNY. The center posted results of my 2015 survey of publishers and I wrote this post, originally published by Knight Digital Media Center at USC Annenberg.

In the chaotic world of online news startups, I think it makes sense to take a long view. Whenever someone asks whether a big breakthrough is coming, I scratch my head. That’s because progress at this time is so incremental – a game of inches, feet, maybe yards but rarely miles – a marathon with no finish line in sight.

I think it is productive to figure out what is working at specific sites, examine why it is working and try to figure out whether it can be replicated in other markets.

That’s part of the philosophy behind Michele’s List, my database of “born on the web” local news sites and behind the publisher surveys I conduct periodically. Today, Tow-Knight Center for Entrepreneurial Journalism, my collaborator in this effort, publishes the results of our 2015 survey, the fifth I have conducted since I launched the database as a Reynolds Journalism Institute fellow in 2010.

Summary of results here.

Progress: More than two-thirds of the publishers report that they increased their revenue in 2014 over 2013. Nearly half said they turned a profit last year. That’s encouraging evidence that a greater focus on revenue across the field is paying off.

Challenges: Most of the sites are quite small, with revenues of $50,000 or less, and they are highly dependent on a single source of revenue – traditional display advertising.  Each is a vulnerabilty. Together they create questions about whether a site has the capacity to develop enough of a business to get past $50,000 so a single founder isn’t trying to do everything.

To be sure, some of the sites in this cohort, are relatively new. Just as newspaper layoffs spurred dozens of launches by refugee journalists in 2009-2010, the disintegration of Patch prompted many if its refugees to start sites in their base communities in 2014. The survey also showed younger sites tended to have less revenue.

Others, however, may be stuck in neutral and some will likely shut down when their owners are forced to get a day job or develop other priorities.

That said, there is a cohort of sites that are growing revenue above $100,000 annually and well beyond. Looking at their trajectories and the market factors that have fueled their growth is worthy of additional study.

Previous surveys..

“Digital leads” newsrooms push print to the back of the line

Fourth in a series on newsroom transformation to serve digital news consumers, originally published by Knight Digital Media Center @ USC Annenberg.

DigitalLeadsCoverIn a ‘‘digital leads’’ newsroom, print moves way back to the end of the line. Journalists first create content and engage on digital platforms – phones, web, tablets. Then, the digital content that is most likely to interest print readers is repurposed for the next day’s newspaper.

Sounds simple, right? For many newsrooms, getting there is anything but easy. Even journalists who scoff at the idea of “doing more with less,” are sometimes reluctant to give up familiar tasks.

It can be done. In KDMC’s two-plus years of work with 13 newsrooms that are now part of the Journal Media Group (formerly E.W. Scripps), we found that newsrooms could develop and stay focused on a limited number of priorities once they had connected with news consumers and figured out what topics and what delivery methods were valuable to those consumers. More about our work is detailed in “Digital Leads: 10 keys to newsroom transformation.”

An important aspect of the initiative was that it did not dictate outcomes such as newsroom structure and job descriptions. Instead, it asked the newsrooms to follow a process that helped them shape priorities, plans and practices around the needs of digital news consumers. Structures and roles flowed from their plans.

Here are examples of changes that took place:

Implementation of protocols for breaking news and social media. Newsrooms implemented protocols that included Tweets, alerts, and visuals on breaking stories. The Redding (CA) Record Searchlight began social media interaction with readers during reporting on non-breaking stories. In Washington, the Kitsap (WA) Sun staff began scripting social media campaigns in advance for projects so those elements would not be forgotten.

Reductions in resources devoted to traditional coverage and print production. Treasure Coast (FL) Newspapers, for example, cut the number of pages remade for different print editions and used more wire content. Knoxville developed a system of pre-designing many pages to reduce the workload, an innovation rolled out to several other newsrooms and the company’s Central Desk. The Knoxville (TN) News Sentinel dropped certain features a couple of days a week and developed content-sharing agreements with other news organizations in Tennessee. The newsrooms found that vigorous production of digital content more than filled the next day’s print newspaper. In addition to reductions in print production, editors found a variety of ways to shift staff resources, typically dropping routine stories or assigning them to freelancers.

Converting the traditional afternoon print meeting to a planning session for digital content and engagement for the next day. In Knoxville, for example, planning for digital platforms for the next day became the focus of the main afternoon news meeting while print planning was downplayed in a smaller, separate stand up. Knoxville displays the budget on a large white board in the newsroom that is day-parted to emphasize the need to post at peak times.

Re-creating budgets changed emphasis. Online budget formats were created that call for details of digital elements as well as engagement plans including social media, calls to action, etc., and follow up to make sure those elements are addressed.

Changes in jobs and job descriptions to reflect digital priorities, including shifting more people to roles where their main focus is digital. Treasure Coast, for example, created digital producer positions to drive efforts on digital and social platforms. As well, journalists who embraced digital and social received recognition and plum assignments. “We treated social media interaction at the same level of importance and skill as producing a story or a photo,” Editor Mark Tomasik said.

Staffing was aligned with digital needs. Changes were made in staffing hours to have more people posting at peak times in the mornings and on the weekends.

Restructuring of editing desks. In Kitsap, one local editor became point person for digital/social during the day while a second local editor focuses on planning for digital. “They cross-train and share duties, but having each editor with an emphasis on their role has improved both,” Editor David Nelson said.

In Redding, Editor Silas Lyons used an opening to realign his editing team of four. The managing editor and Lyons took on many of the metro editor functions, enabling Redding to hire a content editor with the expertise to drive digital and social practices into the newsroom.

Moving the furniture. Treasure Coast moved the news meeting to an open area in the middle of the newsroom and invited staff to take part, an indicator of the new culture of participation.

At the Caller-Times in Corpus Christi, “Our digital team is situated in the heart of our newsroom. This helps keep digital first strategies active on the newsroom floor,” said editor Tim Archuleta.

The Memphis Commercial-Appeal had different newsroom departments spread out on different floors. Because of staff reductions, editor Louis Graham was able to move everyone to the main newsroom. The reorganization also placed the digital team adjacent to reporting team leaders.

“The full room provides a sense of renewed energy and helps communication as well,” Graham said. “Editors are pitching in more the help one another. Communication is more effective simply because it’s easier.’’.

Owning the local news franchise

This post originally appeared on the Community News Leadership 3.0 blog at Knight Digital Media Center at USC Annenberg. It is the second in a series based on a report I wrote, “Digital Leads: 10 keys to newsroom transformation” about work I have been doing with KDMC to speed the digital transformation of 13 Journal Media Group (formerly Scripps newspapers) newsrooms. 

The Four Platform NDigitalLeadsCoverewsroom initiative sought to keep journalism that served the local community at its center.

A persona exercise (see previous post) was part of that effort. In addition to learning more about how different groups of digital consumers found their news, journalists learned through persona interviews how and why certain local topics were particularly important to actual news consumers.

Knight Digital Media Center at USC/Annenberg introduced the concept of franchise topics to the newsrooms in 13 local markets over the course of 2013 as part of its work to help the news organizations (formerly Scripps, now Journal Media Group) speed their digital transformation.

A franchise encompasses a highly local topic in which potential local digital subscribers have a high interest and are not satisfied with news and information that is available on the topic. A franchise topic also is an area where the newsroom has or could develop significant expertise that would enable the newsroom to own the topic in its market.

Creating unique, local content that would drive readership and engagement was only part of the picture. A focus on selected topics would help newsroom teams drive digital production into the newsroom more effectively than attempting across-the-board newsroom adoption. That latter approach risked being shallow and short-lived beyond a few that had a natural affinity for digital work. Instead, developing significant pockets that would lead the way and model new practices for their colleagues offered a greater potential for lasting change.

“A critical part of the culture change effort was using the franchise topic concept to drive digital transformation,” Mizell Stewart III, managing director content at Journal Media Group, said. “The franchise concept enabled the effort to be grounded in improving the quality of journalism across platforms and the newsroom’s service to the community. This led to greater adoption than a pure focus on digital skills ever would.”

Also, by focusing first on highly resonant topics, teams were more likely to be able to experiment with engagement techniques and see a fast payoff in positive community response.

But the primary reason for franchise was to heighten the news organization’s brand in the community at a time when web users did not value the old brand of delivering a comprehensive news bundle to local doorsteps every morning.

Newsroom teams used consumer research and conducted their own interviews to shape their franchise topics and to determine what coverage and engagement made the most sense on each of the three digital platforms – web, mobile and tablet.

They quickly found their topics were resonating.

Treasure Coast Newspapers/ in Florida saw traffic peaks on franchise issues, visuals, and watchdog. “The digital subscriptions grew, in large part, because seasonal residents wanted to continue to read about this region on digital platforms when they moved back north for the summer,” editor Mark Tomasik said.

Treasure Coast also saw communities mobilizing to take action, including protests and town hall meetings, and legislation passed based on issues the Our Indian River Lagoon franchise team reported on, Tomasik said.

Treasure Coast sought to engage directly with residents and connect them with legislators. The news organization hosted four forums for subscribers about Our Indian River Lagoon in 2013 and 2014. At the 2013 forums, which were standing room only, opinion journalists interviewed state legislators and subscribers could ask questions either live or via Twitter.

“It generated news. The legislators made promises that we then could track throughout the year. We videotaped it and made it available to subscribers. The legislators and the subscribers saw us as the leaders and facilitators and watchdogs on this issue. Subscribers thanked us repeatedly and profusely,” Tomasik said.

The Wichita Falls Times Record News and developed a franchise topic called “Lifeline,” as the northern Texas town faced a water crisis.

Coverage scrutinized water consumption by large entities – including the local Air Force base’s practice of using city drinking water to fill recreational pools and the police department’s washing of patrol cars in violation of city restrictions. An editorial criticizing the city for exempting car washes from restrictions prompted carwash operators to pull advertising.

At the same time, the news organization published daily tips on how to save water.

The effort brought significant results, including substantial reductions in local water consumption.

“Prior to the drought crisis, water consumption from Wichita Falls reservoirs reached 35 million gallons per day. By the end of 2014, consumption averaged 10-12 million gallons per day,’’ Deanna Watson, the editor, said.  “City leaders have credited the newspaper’s Lifeline project with that considerable reduction.”

The Redding (CA) Record Searchlight launched its solutions-oriented “Shaping Our Future” franchise exploring how the community is changing and how residents could help make it better last spring.  Public engagement was immediate.

“When we launched the initiative we immediately started hearing that this is what many in the community had been waiting for,” said editor Silas Lyons. “Everywhere I go in the community, people are talking about this and there’s a sense that our leadership is helping to organize and energize the community’s conversation. It’s exciting stuff.”

Lyons said social media participation on the topic was strong.  “It represents a complete culture change for us, and it has already begun to change the relationship with our audience.”

Redding’s “Shaping Our Future” franchise was recognized in by Editor & Publisher as one of its “10 Newspapers That Do It Right” for 2015.

The Kitsap (WA) Sun also paid close attention to social media on its “Kitsap Outdoors” franchise because it was targeting a younger audience. “We really watched the social media numbers. We saw the initial growth was really rapid. Outdoors ran past prep sports in terms of audience in three months. That was the crowd we were targeting. We knew they were on social. We saw it worked,” editor David Nelson said.

Newsrooms also reported evidence that franchise coverage was driving subscriptions. For example, John Moore at the Ventura County (CA) Star said each of the three franchise pages – School Watch, Price of Paradise and Outdoors – last year ranked in the top 10 pages that people looked at and then clicked over to buy a subscription.

“That tells us that we have been able to convert casual readers of franchise content to subscribers, which validates these topics. We also have strong time on site numbers for School Watch and Price of Paradise in particular,” Moore said.

This post is adapted from “Digital Leads: 10 keys to transforming print newsrooms into digital news providers,’’ which I also wrote..

Local news start ups report revenue growth

My new annual survey of online local news sites offers room for optimism: More than 60 percent of the publishers responding said they increased their revenues in 2013 over 2012. Still, it’s a hard slog: Only one third reported turning a profit and nearly half reported $50,000 or less in annual revenue. I conducted the survey via my database of local news start ups at

Read more of my post at Knight Digital Media Center..

Update on my work

An earlier version of this site inexplicably disappeared from the Internet recently. The able folks at Techliminal rebuilt most of it, but not all the content could be restored.

Here are a few links to things I’ve been working on during this content gap: