With newspapers imploding at a rapid rate, a debate is raging over the future of journalism and the evolution of online news. Many people see a big opportunity for “hyperlocal” sites – that is, online-only news organizations that offer comprehensive coverage of individual towns or small regions.
Chuck Newton, a former marketing executive, recently launched My02818.com, a hyperlocal site focusing on the East Greenwich area. Newton talked with Providence Business News recently about his new startup, the economics of hyperlocal, and why the model will only work in some markets.
PBN: What made you decide to start My02818? Why did you pick that zip code?
NEWTON: I was an early adopter when it came to the Internet, so I have always been interested and intrigued by the opportunities it presented. It struck me some time ago that while the Internet had been used “traditionally” to help local organizations go global, it had at least as great a potential to operate the other way around, from global to local, and be a presence in niche or geographic markets. I wasn’t alone, by any means, and there is a real sense out there now that local is the new Internet frontier. If you have any doubt, just Google “hyperlocal.”
As far as 02818 is concerned, my wife and I live in 02818, both of us have been very involved in the community and with the slimming down of the media market there, this seemed an obvious opportunity. There is no longer a local Providence Journal in West Bay, television pays little attention to the area on a continuing basis, and radio is all about demographics, not geography. Those who live and work in 02818 are left with two weekly newspapers and a monthly feature magazine, all of which are constrained by their publication schedules.
We are pursuing an advertising-based business model, which we believe still applies in certain kinds of markets – 02818 among them. And the 02818 market is very powerful economically. It is the most affluent zip code in West Bay and arguably in Rhode Island, with some $660 million in aggregate household income. Anyone selling anything of value in Rhode Island needs to have an expansive presence in 02818, and My02818.com can help fulfill that need. So far, we have been very pleased with the response we are getting from advertisers.
PBN: How does running an online news organization differ from running a print outlet?
NEWTON: First of all, My02818.com is much more than a digital newspaper. For all intents and purposes, we are the news and information site for the East Greenwich School District and the 4,000 families it serves, and it has been a strong partner in our development effort.
Beyond the schools, however, another two dozen local clubs, organizations and churches have “digital dashboards” on My02818.com where they have their own calendars, a central area in which to publish their own timely news and information, their own photo galleries, and links to their own Web sites and other member-critical resources. There is a Quick List of most-often-needed telephone numbers and addresses. We have a comprehensive Yellow Pages. Free classified ads are available.
Our content manager, Nancy Merrill, put all this together, driven largely by her deep local relationships, with our goal being that My02818.com becomes the home page for everyone living and working in 02818. It’s a one-stop resource for virtually everything going on in the neighborhood. We refer to it as a local news and information portal – and sometimes, a Digital Town Green – and as such, it is effectively a social utility for the entire 02818 neighborhood.
But to your original question, from a news perspective, the big difference is deadlines. We have the ability to publish whenever the news cycle warrants it. We are effectively always on deadline. For example, the other day we learned the school superintendent was going to announce his retirement at a school committee meeting that night. If we dealt with a physical product, we would be “on deadline” once the meeting concluded – writing our story and editing it. But we got the story before the meeting began, and actually had it online an hour or so before the meeting.
The other difference is the comment section at the end of our stories. In print journalism, the reporter tells the reader the story; in online journalism it is a two-way conversation. The reporter gets the first crack at the story, but the reader – be they a source in the story or not – has the option of adding their perspective, thoughts, opinions or rants at the end, in the comment section. We hope this evolves into a virtual community debate, where people can add depth, opinions and insight to the story.
PBN: How much new content do you plan to offer people on a regular basis? What is the site’s publication schedule?
NEWTON: Content on My02818.com changes daily; it’s a new home page every morning, and other updates are made throughout the day. Even on weekends we slip in new copy or information as it develops. We are entirely digital, and as long as we can get to an Internet-connected computer, we can update virtually from anywhere, and at anytime of the day or night.
Our goal – short of being the homepage of everyone living or working in 02818 – is to be focused, full, fresh and fast. By focused, we mean catering to the identifiable, attractive niche market comprising East Greenwich and the upscale Cowesett and Potowomut neighborhoods of Warwick. By full, we intend to provide a news and information product that is substantial, and anticipates the interests and needs of the 02818 market. Fresh is a factor of enterprise and technology and our publishing schedule, and even in these first few weeks of operation, we’ve been the place to go for breaking local news. And fast is, as the word suggests, about speed. We can publish from anywhere at any time, with news that users will see first on My02818.com We’re seeing users logging in the morning to read the latest local news, and we have it!
Daily news is part of what we are setting out to do and what people say they want and need, and news, by definition, is new. Our editor, Bob Plain, grew up in East Greenwich, and has worked at several small but good dailies in Oregon and Vermont since he graduated from URI. He has assembled a strong group of reporters, photographers and feature writers (most of whom are freelance, and many of whom are also involved in the community) who fuel our news and information hole. We are generally in a pretty good position to find out what’s going on and report on it quickly.
PBN: How much revenue do you need to bring in for the site to break even? How long do you expect it to take before the site is self-sustaining?
NEWTON: Our research suggests there is something on the order of $2 million annually spent on advertising in the 02818 market. This is largely based on the print media active in the market, and does not include broadcast, direct mail or outdoor [marketing]. So in the aggregate, we believe there is sufficient economic potential for a niche Web site such as My02818.com to exist and flourish.
As for payback, it hinges on advertiser acceptance. We’ve brought on board a former WPRO advertising sales director and general manager, Karen Woodbine, to drive our advertising sales. We are bringing an elite group of users to the site. … And we think advertisers will find this an attractive and valuable audience, and so far, we have been very enthusiastically received.
For local advertisers, there are few other choices. And advertisers selling into the 02818 market see the site as an efficient and precisely targeted add-on to their existing schedules. Clearly, the economic situation will affect us. But we are optimistic that we can get to break-even on an operating basis in the first year, and grow faster from there. We’re watching costs carefully, nonetheless.
PBN: If the My02818 model works, do you have any plans to expand into other areas, or zip codes? Would you consider that?
NEWTON: We have looked closely at expansion opportunities, and there are some very interesting ones not too far from us. But this is not a model that you can pick up and plop down somewhere else without additional investment. It’s local, and that means customization.
Beyond that, we believe there are some unique characteristics that markets need to have for this particular hyperlocal model to be successful. From an advertiser standpoint, good hyperlocal markets for this model need to have above-average household incomes and, reasonable population numbers aside, significant aggregate household income. They need to be markets with a strong sense of self-identity. High educational attainment, strong Internet literacy and high broadband Internet penetration are all key as well. Good markets will also have a significant community retail base, and a large “local-regional” business base of regional and national retail and service firms. And lastly, attractive expansion markets need be at least somewhat underserved by existing media, whether broadcast or print.
We think 02818 possesses these characteristics, and is precisely the kind of community that advertisers and marketers of high-end products and services in particular aim to reach – but typically cannot through existing advertising media.
The typical hyperlocal initiatives have gone for scale and reach without, we think, adequately considering that the demand is for local news and information that is unavailable elsewhere. Many trials have tried to repurpose and repackage editorial from other sources, and it hasn’t worked. Still others have tried an entrepreneurial model in which the publisher and editor and content manager and advertising sales rep is all the same person. There are many different hyperlocal models being tested all across the globe, all searching for the right mix.
What we have assembled here is a neat mix of professional and community journalism; a focus that is entirely local; a combination of content that provides both news as well as valuable local information; a built-in user base from communities-within-the-community who have an interest and a stake in the site and visit regularly; and an offering that is uniquely addressed to the demographics of the market.
Will it work? After less than a month of operation, we are very encouraged. We have a growing user base, and a growing advertiser base. As long as we are able to satisfy the wants and needs of both groups, My02818.com will do just fine. •
