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How Do Hyperlocal Publishers Generate Revenue?

If you’re wondering how independent hyperlocal publishers generate revenue, you’re not alone.

Local news publishing is hardly considered a lucrative industry. More than half of new local online news websites generate less than $50,000 per year, according to a survey by Michele’s List, a database created with the Tow-Knight Center of Entrepreneurial Journalism. That’s the bad news. The good news is it’s still possible for publishers with community-focused sites to generate substantial revenue using a combination of tried-and-true tactics, including digital advertising, sponsored content, reader subscriptions, and branded business directories.

Let’s start at the beginning.

Most local publishers start their journey to financial success with digital advertising as a primary source of revenue. Although programmatic advertising has become a bedrock for generating incremental income for larger publishers, it requires the type of sizable audience that takes years to build. For that reason, local publishers are more likely to start with direct sales.

For independent publishers launching new websites and newsletters, it’s best to start by reaching out to local business owners directly with an advertising pitch.

New research from Borrell shows a weakening climate for local advertising on Facebook. Having already struck out with advertising on social media, more small business owners are returning to their roots and purchasing display advertising directly from independent community publishers.

Only once they have a direct sales team in place selling digital ad inventory to local businesses, will most publishers start exploring programmatic solutions. Despite the downsides to programmatic—which include the need for standardized ad creatives and lower CPM rates—many publishers will still explore programmatic advertising as a way to fill excess inventory on their sites.

Display advertising alone isn’t always enough to pay the bills. Sponsored content is one way that local publishers generate revenue.

Unlike advertorials, sponsored content is a type of native advertising that lives on a publisher’s own website. It can be written by the advertiser or by the publisher’s in-house advertising team.

The amount that a publisher can realistically charge for a sponsored post or article will depend on the size and the demographics of the publisher’s audience. Ad sales teams should also negotiating the finer details, like how long the sponsored content will live on the publisher’s website and whether the advertiser can use the content elsewhere on the web.

(These sponsored content guidelines should provide a good framework for publishers who are interested in going this route.)

Just because a digital publication doesn’t offer a print edition doesn’t mean it can’t use subscription sales as a way to generate revenue.

An increasing number of local publishers are enticing readers with the promise of an ad-free experience or extra content in exchange for a nominal monthly fee.

To manage online subscriptions, publishers can turn to solutions like Substack, which offers tools for selling subscriptions to email newsletters, or recurring billing platforms like Chargify, AdvantageCS, Chargebee, Zuora, Stripe, and Recurly.

Publishers who charge readers to access their websites will almost certainly have fewer page views, but the drop off in advertising revenue can quickly be made up by charging readers $5 to $10 per month for access to premium content.

The most successful hyperlocal websites transcend traditional news to become valuable outposts for community members to congregate online. Readers are learning about local news and events, and they’re getting to know fellow community members through the comments sections and social media pages.

Publishers who’ve built an online community are well positioned to launch local business directories.

Business directories serve as a place where the very smallest business owners—including independent distributors and real estate agents—can pay for listings as a way to promote their services.

Business directories are typically setup to be self-service, which means businesses can pay to post their listings without the help of a publisher’s sales team. This in itself makes the business directory model highly lucrative for publishers, as a type of set-it-and-forget-it tool for generating revenue.

To recap, here are the most common strategies local publishers are using to generate revenue:

• Display advertising
• Sponsored content
• Reader subscriptions
• Business directories

We love to chat about revenue optimization here at Web Publisher PRO, so if you’re interested in learning more about the business strategies our publisher clients are using, get in touch.

By: Stephanie Miles