Local Websites Sell Stock to Readers

When Should Local News Sites Sell Stock to Readers?

Rather than chase investments from outside financiers, a small number of local publishers are turning inward and asking for help from readers in their own communities. But whether local news sites should sell stock to readers is still a hotly debated topic, and as of now, there doesn’t seem to be a one-size-fits all approach.

Questions over whether local news sites should sell stock to readers have swirled for years, but the topic made national headlines again this past week, when The New York Times covered Sonoma County publisher Rollie Atkinson’s decision to do a direct public offering to the readers of The Healdsburg Tribune, The Cloverdale Reveille, The Windsor Times, and Sonoma West Times & News. With the capital raised in the direct public offering, Atkinson is hoping to make necessary website upgrades and raise his staff’s salaries.

What Is a Direct Public Offering

A direct public offering is an investment technique that allows outside investors of all sizes to buy shares of a company. Direct public offers are made to both accredited and unaccredited investors, which is what makes it possible for everyday readers to invest in a local news website. Direct public offerings don’t have to cost much more than traditional reader membership programs, but they give readers a deeper connection to the publication by giving them a financial stake.

While the term ‘direct public offering’ is relatively unknown in the outside world, most people have heard of crowdfunding. Investment crowdfunding and direct public offerings are very similar.

How a Direct Public Offering Works

A local publisher’s decision to sell stock to readers is never an easy one. In the case of Sonoma West, the process started with the hiring of a broker. That broker placed a value on Atkinson’s four community publications, which have a combined paid circulation of 9,900.

Next came setting a financial goal. Atkinson set his at $400,000, with the direct public offering open until March 2019. Usually, publishers will offer a certain dollar amount worth of preferred stock as part of a direct public offering, and then they will let people in a certain group—for example, California residents—buy into their publications.

Readers need at least $1,000 to buy into Sonoma West. Shares of the company cost $4 each, and the minimum purchase is 250 shares. (A prospectus is available to let readers know what the financial requirements are to invest.)

The local news parent startup Whereby.Us started its offering even smaller, inviting readers in Miami and Seattle to chip in as little as $500. In all, the company raised $250,000 from its reader-turned-investors.

Every direct public offering is unique, but it’s not uncommon for investors to be promised a certain annual dividend—for example, a 3% annual dividend—so long as the publication continues to flourish.

Why Readers Buy Stock in Local News Sites

In the local news business, a direct public offering only works when a publication has a strong relationship with its readers. Given the current political environment, there’s a desire from citizens to support local journalism. Publishers can capitalize on that interest by deciding to sell stock to readers now, before interest begins to wane.

More broadly speaking, direct public offerings tend to work best for local publishers in wealthy areas, with Berkeley and Sonoma County being two prime examples. The hyperlocal news outlet Berkeleyside ended up raising $1 million from 355 readers after its direct public offering, which is no small sum for a community-focused publication.

In addition to an annual dividend, readers who invest in local news sites also usually get access to certain perks, like the opportunity to meet with publishers or editors, and early access to special content and live events.

Why Local News Sites Sell Stock to Readers

Rather than chasing down funding from outside financiers, local publishers who sell stock to readers are putting control of their publications into the hands of their own communities. Major decisions, which would otherwise be made by an individual publisher or a financier with no ties to the community, are instead made collectively by that community’s residents.

The decision to sell stock to readers also gives publishers room for long-range planning. With fresh capital in hand, publishers can make any website upgrades they’ve been delaying, like mobile-friendly site redesigns or the development of mobile apps. The additional capital can also help publishers strengthen their coverage of certain areas or topics that matter to readers, like crime or education, or raise their employees’ salaries.

turning readers into subscribers

Local Publishing 101: Turning Readers Into Subscribers

As more local publishers take a hard look at the broken online advertising system, subscription monetization strategies are on the rise. But turning readers into subscribers isn’t always as simple as publishers imagine.

The problem isn’t finding readers. More people are consuming their news online than ever before. According to venture capitalist Mary Meeker’s recent internet trends report, people now spend more than 5.5 hours a day with digital media. But with so much information available for free across the web, it isn’t always easy turning readers into subscribers.

The No. 1 reason why readers subscribe to digital news websites is because of a desire to access news about their local communities, followed by wanting coverage of a specific topic. More digital subscribers than print subscribers say they want to subscribe as a way to support local journalism. That altruistic edge will come into play later as we dig deeper into how top publishers are turning readers into subscribers.

For now, let’s look at which tactics seem to be working best.

Lesson 1: Add a paywall
Yes, there was a time around the year 2000 when paywalls were seen as a failure within the publishing community. The Atlantic, along with many other well-known publications, famously pulled its paywall down to focus on other monetization strategies. But paywalls today are different, and they’re now being setup in a way that makes them much more effective at turning readers into subscribers.

Today’s paywalls are porous. If a publisher has a hard paywall, nobody can see what’s behind it, and readers are more likely to turn around and leave. If a publisher has a porous paywall, readers can see the first few paragraphs of content — just enough to entice them to subscribe for more.

The number of readers who get their news online has grown exponentially in the past 18 years. If the number of loyal readers who are likely to subscribe hovers between 5% and 10%, then local publishers have to decide whether they have enough traffic volume to make a paywall work.

When they’re setup in the right way, paywalls should work as a conversion mechanism for turning readers into subscribers.

Lesson 2: Make it easy to convert
Let’s say readers hit a paywall. What does that paywall look like, and how can readers get around it? In order to increase conversions, publishers should turn their paywalls into promotional spaces for their subscription programs.

Make sure to include a clear link that readers can use to subscribe right away, along with a form where readers can enter their email addresses to continue receiving more information from the publication.

Some publishers change the content on their paywalls based on the number of times a reader has visited their website. For example, the advertised price of a monthly subscription might go down once a visitor has arrived at a paywall five times in a week. The goal here is to entice the reader with a promotional rate. It’s more cost effective to lower the price for a reader who is already on the website than it is to go out and find new readers who may or may not subscribe.

Lesson 3: Take advantage of email advertising
We know that paywalls should include space for readers to enter their email addresses. The next question is, what should publishers do with the email addresses they collect?

Publishers who are interested in turning readers into subscribers will want to email those visitors at regular intervals with promotions and discounts on their subscription packages.

Publishers should also send out email digests with links to their top stories. When readers click on those links, they’ll hit a paywall and be encouraged to subscribe in order to view the rest of the content.

Lesson 4: Get reporters involved
Increasing subscription rates should be a family affair. Top newsrooms, including The Seattle Times, are using advanced analytics tools to give reporters a closer look at how their stories are faring.

Journalists, editors, and publishers should all be watching the traffic coming in to specific stories, and the percentage of visitors who ultimately subscribe. This information can help reporters choose which topics they want to cover in the future. It can also be helpful in setting up and formatting stories in a way that’s enticing to readers. For example, a local publisher may discover that readers who visit the sports section are more likely to subscribe than readers who come for local news coverage. Similarly, readers may be more likely to subscribe after viewing videos or photo galleries than text stories. All of this data is useful when reporters, editors, and publishers work as a team.

If you’d like to learn more about the latest strategies for turning readers into subscribers, please reach out. We can show you which strategies are working best for local publishers in real-time and offer advice on how to improve conversion rates on your existing website.

increase subscription revenue

How to Increase Subscription Revenue – A Guide for Local Publishers

Subscription revenue is on the rise at online news outlets across the country, so why are local publishers still feeling the financial pinch?

Readers are flocking to online news outlets, and there’s been a renewed interest in supporting local journalism over the past few years, but publishers still need to optimize their subscription programs if they want to make up for declining online advertising rates.

Simply adding a “subscribe now” button to a homepage isn’t enough to make a financial impact. To increase their subscription revenue, publishers have to go further.

The Subscription-First Model

Subscription revenue at major news outlets like the New York Times and the Washington Post is on the rise. The New York Times added 132,000 subscribers in just the first 18 days after the 2016 presidential election, and new subscriptions at the Post have grown by 75%. Local publishers are experiencing similar successes, but subscription rates and subscription revenue are two very different beasts.

The increases publishers are seeing in subscription revenue are being negated by decreases in advertising rates. To that end, some local publishers are going with a subscription-first model that does away with advertising altogether and focuses on increasing the appeal to readers with VIP experiences. These publishers are finding that readers are more apt to subscribe when they get access to an ad-free publication. That means no pop-ups covering their screens or filling up their browsers.

Local publishers who aren’t quite ready to do away with ads altogether are taking a hybrid approach, allowing paying subscribers to enjoy an ad-free experience while non-paying readers still see ads alongside most website content.

Understanding the Audience

Subscription revenue is tied to subscription rates, so how does a publication get more readers to subscribe? If only there was a magic solution. The truth is that the most successful local publications rely on analytics to understand what their readers want to see. Catering to the audience is always important, but especially so in a time when publishers are trying to increase subscription revenue.

Using analytics tools, publishers should segment their audiences by loyalty and the likelihood that they will pay for access. That’s the group that publishers should be catering to. In addition to tracking which pages these readers view, publishers should be keeping tabs on engagement.

Drilling down in this way, publishers may discover that the readers who are likely to pay for access care about different topics than the public at large. They may also discover that members of this group are more likely to click on coupons or arrive at their sites through social media.

In a series of studies looking at what moves readers to subscribe to news publications, the Media Insight Project found that quality and accuracy matter to almost every subscriber group, and regardless of their underlying motivations, many subscribers are triggered by well-times subscription discounts.

The Media Insight Project found that market size matters, too. New subscribers at smaller news outlets are more likely to subscribe after moving into town than those at larger outlets.

Other factors that drive readers to subscribe have to do with an interest in news, having noticed interesting articles, or being concerned about the accuracy of other news sources in their communities. Local publishers can focus on these factors as they look for ways to drive subscription revenue.

Closing the Deal

We know what types of subscription programs drive revenue for local publications, and what factors make readers to want to subscribe. So how do successful local publishers close the deal and turn readers’ interest in their websites into subscription revenue.

Conversion requires a trigger, and the most successful trigger in this case is a price reduction.

According to the Media Insight Project’s research, discounted subscription pricing is the most effective trigger, with 45% of recent news subscribers citing that as a reason for subscribing. Twenty-one percent of readers subscribe to local news sites as a way to get coupons from ads, and 16% say paywalls are a motivating factor. A recent move into the area, or a lifestyle change, can also lead readers to subscribe to a local news site.

Timing is everything here. When readers hit paywalls, they should see a quick way to subscribe for immediate access. When they click onto pages designed for new residents, they should see ads encouraging them to subscribe. And when readers have visited a website a certain number of times in a month, pop-ups should start appearing with discounted subscription prices. These are all conversion tactics that will increase subscription revenue, with minimal work on the publisher’s part.

Increasing subscription revenue isn’t a one step process, but simple tweaks can add up to major changes in subscription patterns.

turning readers into subscribers

The Price Is Right: How Local Publishers Set Subscription Prices

How much will people pay for local news? It’s a question that every local publisher has pondered. But with the number of publishers launching subscription and membership programs on the rise, the need for real information about how to set subscription prices has never been greater.

Where is the ceiling on local publishing subscription rates? How much will readers pay, and at what point will a high price tag turn them away?

The answer to these questions has to do with the perceived value of the subscription. The greater the perceived value of whatever the reader is paying for—whether it’s a subscription, a membership, or even just limited access to premium content—the higher the price tag the publisher can justify.

Increasing the perceived value of a local publication’s subscription program requires publishing more high quality, relevant articles, and launching add-on services like local business directories, podcasts, and email newsletters.

Perceived value is also tied to marketing. A local publication that successfully promotes itself through both traditional and non-traditional forms of marketing is going to have a higher perceived value than one that does not, even if the publication that promotes itself has a lower quality of journalism.

Publishers looking at how to set subscription prices should consider the perceived value their publications or websites are providing to readers. What are readers getting in exchange for their hard earned dollars? The higher the value, the higher the acceptable subscription rate.

“The Price of a Cup of Coffee”

If you’ve been around the local publishing industry for any length of time, you’ve seen subscription marketing materials that tout monthly rates that are lower than the price of a cup of coffee. The Guardian is one of many publications charging $5 per month for subscriptions, roughly the same price as a grande-sized latte at Starbucks.

When local publishers set subscription prices at $5 per month, they position themselves alongside cups of coffee. When rates go up to $10 per month, they position their subscription programs alongside Spotify and Netflix. The value proposition there is much harder to justify for small publishers, which is why $5 per month seems to be the sweet spot for many in the industry.

One way that local publishers do justify higher price points with their subscription and membership programs is by offering paying readers ad-free experiences and valuable extras, like exclusive stories and podcasts, invitations to meet up events with reporters, and early access to new website features.

Considering Reader Demographics

Reader demographics play in a role in the subscription prices that publishers can charge, as well. Publishers who are getting ready to set subscription prices have to look at who their readers are and how much they can afford.

Niche publications will often find that their readers will pay more than the readers of community-focused news sites. For example, Stratechery, a site that provides free weekly content and additional analysis to paying subscribers, charges $10 a month. That price would be on the high side for a website covering local news, but Stratechery focuses specifically on the technology and media business, with readers who tend to have high incomes.

Publishers that sell exclusive content, like research papers, can charge even more for access. This is especially true if they market their subscriptions to businesses rather than individuals. For example, Business Insider’s research division was charging $2,495 for all-access memberships back in 2016. Politico Pro offers up another example. The policy intelligence website, launched by the team at Politico, has been known to charge corporations between $5,000 and $10,000 for premium access.

Scale becomes a lot less important when you’re selling subscriptions for thousands of dollars a pop. But, of course, the vast majority of local publishers can’t expect to set subscription prices so high. According to an analysis conducted by Pew Research Center, the median price of a digital subscription to U.S. newspapers is $10 per month. Online-only outlets tend to charge less, while the largest newspapers in the country charge considerably more.

The median subscription rate for digital news is considerably lower than for print news. However, that rate is still 83% higher than it was in 2012, when the Reynolds Journalism Institute published its own report on the optimal price for online news subscriptions.

Market size didn’t play a role in Pew’s findings, however discounted trial subscriptions did result in higher conversion rates than free trial subscriptions, which is something for publishers to keep in mind as they design their marketing and conversion programs.

Given all of this information, it’s clear that local publishers looking to set subscription prices should keep these factors in mind:
1) Who is reading the publication?
2) How much can those readers afford?
3) What value are readers getting in exchange for their subscriptions?

Make Local Publications More Profitable

How to Make Local Publications More Profitable

Display advertising rates are declining, but overall revenues among digital news publishers have never been higher. How could that be? The answer is diversification. In order to make local publications more profitable, publishers are blazing new paths and adopting new income generation strategies that bolster the bottom line.

That means acknowledging the shift in display advertising, as more ad dollars have moved to Google and Facebook, and putting a greater focus on ancillary revenue streams like subscriptions, sponsored content, e-commerce, and live events. By broadening their revenue base, local publishers reduce their dependency on traditional forms of advertising income.

According to a report, nearly half (44%) of publishers already see subscriptions as a “very important” source of digital revenue, even greater than display advertising and branded content.

At Whereby.Us, a locally-focused email newsletter startup, consumer revenue now accounts for 10% of all revenue. That number is expected to triple in the next few years, as the company continues to expand its programs.

The Charlotte Agenda is diversifying, as well. The hyperlocal publisher runs a membership program that costs $60 per year. Members get certain perks, like the ability to contribute op-eds and receive coupons to local stores. But mostly, they’re helping to shore up the bottom line for the popular local news site.

Adaptability is the key.

One of the keys for anyone looking at how to make local publications more profitable is to be adaptable. A publication that relies solely on display advertising revenue is in trouble if advertising rates start to drop, but a publication with multiple streams of revenue is better positioned to handle the changing tides.

Not every revenue generation idea will be a winner, of course. It’s just not possible. But that doesn’t mean that local publishers should stop trying to succeed.

To make local publications more profitable, owners need to be aggressive in trying new ideas, and willing to pivot if one idea fails. An idea that works well for one publisher—like hosting local events—might flop for another. We expect that to happen from time to time. But in order to see gains and move closer to profitability, and make local publications more profitable, we need to start implementing new income streams on a regular basis.

Experimentation is necessary.

Even The New York Times takes gambles. The news outlet launched a mobile cooking app, with plans to start charging users for access. That kind of innovative thinking is what helps make local publications more profitable.

Not every gamble requires a big financial outlay. Thanks to print-on-demand services and dropshipping, a number of publishers have been able to setup e-commerce stores and sell branded content through their websites with minimal financial investments.

Of course, local newsrooms do traditionally have fewer resources than their national counterparts. This can make it more difficult to experiment with creative new revenue streams. But remember, the more ancillary streams a publisher has in place, the less of an impact there is when one fails.

Artificial intelligence could someday be used to support local journalism, as publishers get even more creative in using the technology to generate better recommendations and so-called “robo-journalism” articles.

Cookie-cutter models don’t work.

When we look for ways to make local publications more profitable, we have to look at the publications themselves. Each publication brings its own unique advantages, s well as disadvantages. The flexibility that local publishers have, coupled with the ability to quickly adapt to changing market trends, is one of their greatest assets.

In a recent report on the state of the local news industry, Columbia Journalism Review found that “income diversification is fundamental,” even if the long-term potential of some ideas are unproven. The seven most popular revenue-generation practices for publishers, according to CJR’s research, were:

  1. Subscriptions
  2. Paywalls
  3. Events
  4. Media services
  5. Newsletters
  6. Obituaries
  7. Foundations and crowdfunding

When publishers diversify their revenue streams, they don’t just increase profitability in the traditional sense. They also give readers more opportunities to interact with their brands. For small publishers, especially, that sort of brand affinity goes a long way toward boosting memberships, subscriptions, and ad sales.

If you’d like more information about the latest strategies we’re using to make local publications more profitable, please reach out to our team here at Web Publisher PRO.

Publishers host live events

How Local Publishers Use Live Events to Drive Profitability

As local publishers look for new ways to squeeze every last drop of revenue from their publications, live events are becoming a more attractive option.

Most local publishers already have deep ties within the communities they cover, not just with readers, but with small business advertisers and elected officials, as well. Given those relationships, publishers are in an ideal spot to host and sponsor events like conferences, reader meet-and-greets, and even community festivals.

Ticket sales aren’t the only way publishers are generating revenue from live events. Publishers are also selling sponsorships to advertisers and using live events, like newsroom meet-and-greets, as an incentive to encourage readers to join their paid membership programs.

Although publishers can be tight-lipped about revenue, live events are estimated to account for as much as 20% of total revenues for some news outlets. Live events also deepen the relationships between publishers and local business sponsors, who might be more inclined to advertise on the publisher’s website after partnering on an event.

Here are the most popular types of live events for local publishers to host.

1. Conferences

Conferences are the most obvious and common type of live event for publishers to host. From Recode Media’s Code Conference in California to MediaPost’s Publishing Insider Summit in Texas, it’s fair to say that publisher-hosted conferences have gone mainstream.
Despite the ubiquity and success that digital publishers have had in generating revenue through conferences, there are some downsides to be aware of. Smaller local publishers can have difficulty selling out large venues. They might also have trouble managing the logistics of a conference without hiring a team of professionals who’ve hosted conferences in the past.

Conferences can be lucrative for publishers, but we generally recommend that smaller publishers start by hosting some of the other types of live events listed here before they move on to larger conferences.

2. Business Recognition Events

Business recognition events are an excellent way for local publishers to dip their toes into live event hosting, without requiring nearly as many logistical requirements as a conference.

Business recognition events can be held to honor the best places to work, the fastest growing companies, or the most charitable employers in the publisher’s town. Rather than relying on ticket sales, publishers generate revenue through business sponsorships. What business wouldn’t want its logo on the brochure and signage for an event honoring the most charitable or innovative companies in town?

One issue to consider with business recognition events is that they tend to be low margin, so publishers will have to keep a tight watch on spending to ensure they don’t lose money when hosting an event.

3. Newsroom meet-and-greets

As far as live events are concerned, it doesn’t get much more straightforward than hosting a newsroom meet-and-greet. This type of live event is ideal for local publishers with membership programs, since many readers would jump at the chance to tour the publisher’s newsroom and interact with their favorite columnists in exchange for paying a nominal monthly fee.

Newsroom meet-and-greets don’t have to be formal. All that’s really needed is a newsroom, some refreshments, and a publication’s staff. Local publications that don’t have dedicated office space can host their meet-and-greet events at local coffee shops or event spaces.

4. Local Festivals

Time Out Group, the British publisher of city magazines and travel guidebooks, hosts hundreds of live events each year. This summer alone, the company is planning to host a ‘Movies on the River’ event, with a floating cinema, a silent disco at a London skyscraper, and an event called Battle of the Burger in New York.

Smaller, local publishers often have success hosting tasting events with top restaurants or brewers in their towns. In most cases, restaurants will pay to participate at these events, other local businesses will pay to sponsor them, and attendees will pay for tickets, presenting a trifecta of revenue generation channels.

Because they are such large events, the majority of festivals rely largely on sponsorships from businesses for support. For example, Time Out’s floating cinema event is being sponsored by Rekorderlig Botanicals cider. If hosting a large festival is out reach for a community-focused publisher, there’s also the option of working with a third-party provider on a revenue sharing model.

Live events are rarely enough to sustain a local publisher by themselves, but they can serve as a valuable source of secondary income and they can lead to additional opportunities, like the chance to sell branded merchandise and promote membership programs. Content from live events can also be recycled into webinars and on-demand videos that readers must pay to access.

If you’d like more information about the revenue generation strategies we offer local publishers at Web Publisher PRO, feel free to reach out.

membership program

Local Lessons From The Daily Beast’s New Membership Program

Membership programs are all the rage among digital publishers right now, with The Daily Beast becoming the latest outlet to enter the fray. Daily Beast readers who want early access and exclusive content can pay $100 to join Beast Inside, a membership program that positions readers as team members and decreases the publication’s reliance on outside advertising dollars and sponsorships.

The Daily Beast is the latest in a long line of online publishers exploring this type of membership model. Unlike subscriptions, which turn readers into consumers buying a product, and donations, which turn readers into saviors of local journalism, membership programs turn readers into partners.

Over at The Daily Beast, CEO Heather Dietrick says her membership model is about building deeper, more intimate relationships with the website’s most loyal readers. Although Dietrick believes that The Daily Beast is in a better position to pivot to the membership model than publications that have relied heavily on Facebook as a source of traffic generation, there are certainly lessons that local publishers can learn from the launch of Beast Inside. Here are a few things that stand out.

Membership programs should be designed for a publication’s readers.

The Daily Beast did its due diligence before introducing a membership program. The publication knows that its readers tend to be urban, affluent, news junkies, and as a result, its membership program delivers on the content that those readers are likely to prefer.

This isn’t a strategy that’s exclusive to The Daily Beast or other large digital publishers. Small hyperlocal publications can take advantage of web analytics and reader surveys to find out who their regular readers are and what types of coverage they enjoy. This information can then be used to design a membership program that readers can’t help but want to join.

Readers will pay for a quality product.

One of the biggest hesitations local publishers have about launching a membership program has to do with pricing. Many community-focused publishers are worried about alienating their readership with a membership program that costs too much. At the same time, setting too low of a price doesn’t give local publishers the revenue they need to support the very initiatives that are most likely to make people want to become members.

At $100 per year for a membership, Beast Inside gives the publication enough leeway to create some really interesting content, like a members-only mysteries series, exclusive podcasts, and a customizable email newsletter.

Newsletters are a valuable commodity.

With the news cycle moving at warp speed, people are searching for ways to distill the top headlines of the day. One of the exclusives that The Daily Beast gives to readers who join its membership programs is access to The Cheat Sheet, an email newsletter that’s designed to keep people updated on the most important stories.

The Daily Beast is allowing members of its Beast Inside program to customize their email newsletters. For example, readers who can’t get enough political coverage can switch to an all-politics edition. This is a step that local publishers could easily replicate, offering special versions of email newsletters dedicated to certain topics or areas of news coverage for people who join their membership programs.

Free content still has a place in online publishing.

When publications launch paywalls and subscription programs, there’s a tendency to want to lock down free content as a way to encourage people to pay for access. The Daily Beast has moved in the opposite direction. CEO Heather Dietrick says the company plans to keep its core product widely available. Doing so, she believes, will allow more readers to discover the content and consider becoming paid members.

A publisher’s free content serves as a form of advertising. And since industry research suggests that just 2% of a publisher’s audience will pay for access to content, keeping the majority of articles open allows publishers to still generate revenue from online advertising.

Instead of forcing people to pay for access to content they’ve previously enjoyed for free, the membership model rewards readers for their support with access to new forms of exclusive content. In that way, the membership model appears to be a much more sustainable source of recurring revenue for local publishers looking to reach long-term goals.

small donations

Local Publishers Find Financial Sustainability Through Small Donations

Small donations are adding up to big revenue for hyperlocal publishers.

The trend toward asking for donations from readers may have started with non-profit news sites, but it has quickly expanded outward. Today, both for-profit and non-profit digital publishers are asking readers to donate to keep local journalism alive.

With digital advertising rates falling, more local publishers are asking for small donations from their readers. Of course, what counts as a “small” donation varies from publisher to publisher. Over at The Guardian, preset donations start at $7. ProPublica starts its preset donations at $35.

A donation is viewed differently than a membership or a subscription, because donors aren’t always guaranteed extra access to content in exchange for their financial support. From the publisher’s perspective, subscriptions are often seen as a more reliable source of predictable revenue. Most readers subscribe to hyperlocal publications for defined periods of time, with payments made on a monthly or annual basis. Donations, on the other hand, can be one-time events, depending on how the publication’s donations page is setup.

Many donors are regular readers and longtime daily newspaper subscribers whose loyalty to their hometown papers has waned in the age of corporate takeovers. For these readers, in particular, hyperlocal publishers fill a unique void that’s worth supporting.

Over at Berkeleyside, the award-winning independent news site in Berkeley, California, readers are given the option to give monthly or just once. Preset monthly donations start at $5. At the New Haven Independent, readers can become “friends” of the site for $10 per month. Much lower on the same page, visitors are given the option to make tax-deductible contributions of any amount they choose.

What drives readers to donate?

Whereas subscriptions are fueled by the desire to access restricted content, and membership sales are often fueled by a desire to receive “free” benefits, donations are something else.
Small donations come from readers who value a publisher’s work and understand the role that journalism plays in their communities. When readers see articles written about the places they visit, and written by reporters living in their own communities, they’re driven to donate.

Hyperlocal publishers should do whatever they can to help their readers understand the financial strains they’re under and how donations of any size can be of benefit. Publishers who are successful in getting that message across often reap significant rewards. During the first for month of this year alone, ProPublica added 11,000 small-amount donors to its rolls, accounting for almost $1 million in donations. Last year, online donations accounted for 12% of ProPublica’s revenue.

Publishers can also use data to their advantage. For example, local publishers can target segments of readers with tailored donation requests based on which types of content they consume. Publishers can also use A/B testing to determine which messages resonate best with potential donors.

How can publishers encourage more small donations?

First and foremost, publishers shouldn’t be afraid to ask. Sites like Neiman Lab plainly ask readers for donations in order to advance the organization’s mission to promote the standards of journalism. These solicitations can also be made via social media posts or email newsletters.

Many publishers would like technology giants to help, but because there is almost no standardization within the hyperlocal publishing community, it’s a challenge for large platforms like Google and Facebook to drive memberships or donations to individual sites. One idea that’s been floated is a Chrome extension for donations. Other publishers are discussing ways to drive payments from inside Google AMP.

Kickstarter campaigns are being seen more often within the hyperlocal publishing community, as well. In May, two hyperlocal news sites—LAist and DCist—launched Kickstarter campaigns. Their sister-site, Gothamist, more than doubled its fundraising goal through a Kickstarter campaign that raised $200,147 from more than 2,800 backers.

If you’d like to learn more about the latest revenue generation strategies for hyperlocal publishers, we’d love to talk.

Make Local Publications More Profitable

Ancillary Revenue Opportunities for Local Publishers

As hyperlocal publishers search for new ways to generate income outside of online display advertising, ancillary revenue streams are moving into the forefront.

With online adverting rates continuing to decline, savvy digital publishers are looking to pursue every income generation strategy available. New opportunities to create ancillary revenue streams are allowing publishers to capitalize on the positive sentiment and goodwill they’ve created in their communities, and also serving as a diversification strategy that could offer protection should digital advertising rates fall any further.

Having multiple ancillary revenue streams means publishers are less reliant on traditional forms of advertising. If advertising rates get to an unsustainable place, publishers who’ve already started generating ancillary revenue will be at a marked advantage.

Here are five ancillary revenue opportunities available to publishers today:

1) Local Events
Event production gives local publishers the opportunity to generate ancillary revenue and promote their brands in a positive way.

The types of events that hyperlocal publications can host range from the small—like high school sports banquets and subscriber meet-and-greets—to the largest events imaginable, including music festivals and city-wide restaurant tasting events. In St. Louis, KMOX Radio produces Food Fight, an annual event where local chefs compete for the title of St. Louis’ Food Fight Champion.

Planning events takes hard work, commitment, and significant resources, especially for local publishers who aren’t used to running these types of operations. It’s often worthwhile to hire a local event planner, even if that cuts into profit margins.

A number of plugins are also available for publishers who run their websites with WordPress, including Events Manager, Event Tickets, Tickera, and Eventbrite.

2) Members-Only Podcasts
Podcasting is one of the fastest growing media channels. Rather than giving their podcasts out for free and relying on advertising revenue to support the endeavor, some publishers are turning their podcasts into premium experiences and charging readers to listen.

Publishers can structure their members-only podcasts in a number of ways. For example, some publishers lock all of their podcasts behind paywalls. That’s probably the least common option among small media companies. What’s more common is for local publishers give offer their subscribers an ad-free listening experience. Another solution that’s popular right now is to create two versions of each podcast, a short version that listeners can access for free and an extended, premium version with more in-depth reporting that only paying subscribers or members can access. In this case, podcasting becomes a tool that publishers can use to incentivize readers to become paying subscribers.

3) Online Stores
Whether a publication launches an online store really depends on if the company has anything to sell. In The New York Times Store, readers can purchase Times-branded apparel, like umbrellas and baby clothing, personalized books that contain news stories from important dates in histroy, front page reprints, maps, and books written by Times reporters.

Publishers who run their websites on WordPress can use the WooCommerce plugin to sell digital and physical products through their sites. The Printify for WooCommerce plugin can be used to print logos on products, like t-shirts and hats, on demand.

4) eBooks
Hyperlocal publishers know their communities better than anyone else, making them well positioned to sell eBooks on a wide variety of city-specific topics. From local history to tourist hot spots to comprehensive guides on dining in their towns, there are limitless opportunities for the entrepreneurial publisher.

Publishers have the option to commission books from their writers, or pull together content that has already been published, such as restaurant reviews. eBooks can then be sold through the publisher’s own website or given away for free as part of a package for new subscribers.

5) Subscriber List Rental
Perhaps the most controversial ancillary revenue solution on this list, list rentals involve giving out subscriber email addresses to businesses in exchange for a fee. The practice can be lucrative, as brands are willing to pay a premium for the service, but it can also dissuade readers from signing up to become subscribers and ultimately damage the publisher’s reputation if news of the practice gets out.

Somewhat less controversial is the co-branded email program. Rather than handing out their subscribers’ complete contact details, local publishers can send out co-branded emails together with outside companies.

Utilizing a variety of ancillary revenue opportunities, publishers can diversify their income and ultimately build more sustainable media organizations.

e-commerce strategies for local news sites

E-Commerce Strategies for Local News Sites

As publishers look to squeeze every bit of revenue from their online properties, there’s been a renewed interest in e-commerce strategies for local news sites.

The vast majority of publishers already have digital advertising and subscription sales programs solidly in place, but e-commerce still represents an untapped revenue stream with seemingly limitless potential for publishers interested in diversification.

According to a survey by Digiday, less than half of publishers today generate revenue through e-commerce. Of those publishers who do utilize e-commerce strategies for local news sites, just over half say at least 75% of their commerce revenue comes from affiliate sales. Forty-percent of publishers have online stores, and 17% sell products on Amazon.

When it comes to e-commerce, the ability to create a product or distribute it isn’t nearly as important as the ability to promote it. Local publishers already have built in audiences. Publishers can ask their readers what types of products they’d be interested in seeing, and paying for, and they can promote their branded merchandise in email newsletters or through social media posts.

Although e-commerce makes up a small portion of most publishers’ revenue—only 4% of publishers who reported e-commerce revenues in Digiday’s survey said they generate more than 50% of their revenue through that channel—it’s still an attractive strategy thanks to the minimal upfront investment.

What Should Local Publishers Sell?

The rise of print-on-demand platforms means publishers can put their logos on just about any type of merchandise. The New York Times sells branded hats, t-shirts, umbrellas—you name it. So does The Wall Street Journal, CNN, and a number of other respected news publications.

Niche publishers also have an opportunity to sell products related to the areas they cover. For example, the Harvard Business Revenue has an online store where readers can purchase entrepreneurship books, business magazines, and business toolkits. The Harvard Business Revenue has also been able to monetize its own products, such as articles and case studies.

One of the most obvious e-commerce strategies for local news sites is to sell city-specific goods or products made locally. Those types of goods might include city maps, books written by local authors, or mugs printed with a town’s logo.

Local publishers can also setup e-commerce stores that sell digital goods, like audio walking tours recorded by the publication’s editors, or e-books made up of previously published content. E-commerce stores that sell digital goods can be setup to require minimal day-to-day management, since there aren’t any physical products to be shipped or payments to be manually collected.

Let’s go into more detail about some of the most popular e-commerce strategies for local news sites.

  1. Online Stores
    The New York Times, The Wall Street Journal, and The Chicago Tribune are just three of the hundreds of daily newspapers with online e-commerce stores. Of those, The Chicago Tribune’s store most closely resembles a local news website’s.The Tribune’s online store is full of product ideas that would fit well in a hyperlocal publisher’s store, including books about Chicago sports, culture, and events, as well as branded merchandise and a “free speech collection” of apparel.
  2. Selling on Amazon
    It isn’t hard to start selling on Amazon, and yet just 17% of local publishers currently sell through the e-commerce platform. Selling on Amazon is ideal for publishers who don’t have the bandwidth to build and manage their own online stores, but still want to take advantage of e-commerce as an ancillary revenue stream.Print-on-demand services, like Merch by Amazon, offer a way for publishers to sell branded t-shirts without managing inventory or dealing with shipments. Publishers simply upload their logos, choose which products they should be printed on—for example, t-shirts and mugs—and set their prices. Amazon handles the rest, automatically printing products as they are ordered and shipping them out to customers.Another on-demand e-commerce fulfillment platform is Zazzle. Zazzle has partnered with Atlantic Media to produce and sell branded merchandise for the multi-platform publishing company, with products that run the gamut from keychains to grocery totes.
  3. Affiliate Sales
    Even local publishers with no interest in creating or selling products can generate revenue through e-commerce. Affiliate links are one of the least burdensome e-commerce strategies for local news sites, allowing publishers to earn small sums of money each time readers purchase products through their links.One of the easiest places to begin inserting affiliate links is in book or music reviews. When readers click on those links and purchase a book or album, the publisher earns a small percentage of the sale. As one of the largest online retailers with an affiliate program, Amazon pays commissions that range from 3% to 8% depending on the product category.
  4. Native Commerce Content
    Loosely related to affiliate revenue, native commerce content is one of the e-commerce strategies for local news sites that bypasses ad blockers and sits in a publisher’s content management system. Platforms like StackCommerce offer a way for publishers to organically integrate products into native content that directs readers to branded online shops.When it’s done right, the native commerce content strategy drives engagement without requiring the same type of hands-on approach that typically comes with running an online store.