Lessons from the Local News Lab — Part Two

This is part two of six essays documenting what we have learned about building new networks for local news and fostering more creative, sustainable and community driven journalism. Read part one, part three, part four, part five and part six.

By Molly de Aguiar and Josh Stearns of the Geraldine R. Dodge Foundation

“One year in, all six news sites are reporting upticks in key metrics and are experimenting with new business models. Most sites have increased their average monthly revenue compared to six months ago. All six sites have developed at least one new revenue stream. […] Nearly all sites also noted increased traffic and/or increased engagement when asked about notable trends in their traffic data one year in.” — ORS Impact’s one-year report to the Knight Foundation

A. THE ROLE OF MENTORING AND COACHING

In May 2014 the Duke Reporters Lab released a report on the lack of digital innovation in local TV, radio and print newsrooms. They found that while time, budgets and people were often cited as holding back adoption of digital tools, the root causes were often a mix of culture and infrastructure. In the end, they wrote, “Legacy news organizations remain focused on legacy news. With limited resources, the first goal is to fill airtime or newsprint or stock the website. The goat must be fed, and the easiest feed is the diet it’s been fed for years.”

In our work with local digital-first news organizations we found similar struggles. While these emerging online hyperlocal news organizations were born on the web, they struggle with finding the time to invest in creative experiments with business models, community engagement and digital tools that could help them become more sustainable over the long haul.

One of the most valuable resources we have provided these sites is extra capacity in the form of hands-on coaching and mentoring. We hired Josh Stearns as a director of journalism and sustainability to work with the six sites on developing new approaches to revenue, outreach and technology. He works hand-in-hand with Molly de Aguiar, Dodge’s program director for Informed Communities, who leads the grantmaking and community engagement efforts which we will discuss in greater detail in future blog posts.

This sustainability director position served many functions:

• Business Coach — Having a person dedicated to assessing the strengths of the newsrooms and the needs of the communities to help develop and test new revenue streams helped give sites the space and information they needed to diversify their business model. Regular meetings forced sites to keep this work on the front burner — something they all reported as very valuable. We found that active coaching — checking assumptions and nudging people towards goals — was important to keep innovation and experimentation on the front burner.

• R&D Director — Researching proven tools and strategies to solve challenges the sites were having and helping pilot those innovations was a core part of this work. See for example, this inventory of more than 50 revenue ideas and examples for media organizations:

New Revenue for News: 52 Ideas to Support Local Journalism

• Platform Advocate — The director often acted as a liaison between local news sites and tech companies to advocate for the needs of local journalists and help solve problems that arise in their use of Facebook, Twitter and other platforms. The Director helped negotiate on the site’s behalf with crowdfunding platforms, payment processors and analytics companies.
• Sounding Board — So many people working in local news are doing so solo or in very small teams. Having someone to bounce ideas off of, get a second opinion, or just talk through a tense community issue was important. Sometimes it was as simple as having a shoulder to lean on during really tough moments when it felt like journalists were nearing burn-out.
• News Filter — Many local journalists don’t have time to stay up to date on new research and writing at places like Nieman Lab, Poynter, Columbia Journalism Review and many other places. As such they don’t get the benefit of all the good learning out there in the field. Having someone sort through the noise and highlight specific articles with concrete lessons for local news was useful. Similarly, they can’t afford to attend most conferences so their voices are left out of, and they miss out on, those debates.
• Extra Set of Hands — Sometimes the director had to jump in on a project and help with newsroom tasks like designing an ad sales kit, writing pitch language for a crowdfunding campaign, or helping fix a website plug-in. Early on in the project these sorts of immediate, hands-on support helped build trust between project staff and partner sites.
• Connector — Because the director was working across all of the sites, and was connected to the larger national discussion, he was able to help facilitate conversations between people trying similar strategies or with similar challenges (locally and nationally).
• Marketer for Local News — The director became an evangelist for our local sites, pushing their stories out and pitching their work to media reporters at NiemanLab, Poynter, Politico Media, Mediashift and more. The director also documented what was working and what wasn’t and wrote often about the sites, as well as used examples from their work in presentations.

In many of our one-year interviews with the partner sites they said that the one-on-one attention and coaching was an invaluable part of this work, helping them move forward big changes in their business.

Through this work we came to understand sustainability as much more than just a matter of revenue and traffic statistics.

Sustainability in local news is also fundamentally about the health and wellbeing of local journalists, many of whom are working nearly around the clock to cover their community. One site decided to scale back their participation in the program after the first six months because of a number of acquisitions and staff transitions that demanded their time and resources.

GIF via wolfwaffles.com

B. EXPERIMENTATION GRANTS

We offered each site a small $5,000 grant to experiment with new revenue streams. Before receiving the grant, they worked with the sustainability director to build a budget around the revenue experiments they wanted to try. We were amazed by how different each site approached these funds and how resourceful they were with the $5,000. Here is a snapshot of what sites were able to do with those dollars:

• Apps — Brick City Live created a minimum viable product for a local news app and tested a loyalty card program which was hugely successful. More than 500 people signed up for the pilot program and spilled over onto a waitlist; local businesses clamored to be a part of the pilot. Using the initial revenue from that pilot, the newsroom invested in a mobile app-based version of the loyalty program which is set to launch shortly.
• Distribution — New Brunswick Today bought newspaper boxes to help distribute its monthly bi-lingual newspaper. The boxes cut $300 off its monthly distribution costs, expanded its circulation, and raised awareness of its brand in the city. The site plans to sell ads on the boxes as a bundle for print and web advertisers.
• Video — Morristown Green and New Brunswick Today invested in video equipment and production costs. One site is monetizing video through ads and views, the other is selling videos of local events and offering video recording services that subsidize the reporting.
• Social Media — Jersey Shore Hurricane News invested in staff time to expand its social media footprint, specifically on Instagram. It grew its Instagram account to 10,000 followers in roughly one year and attracted the attention of local businesses and a marketing company which has turned into a $20,000 partnership.
• Print — The Lo Down and New Brunswick Today tested new versions of their print products, expanding beyond newspapers and magazines into local guides for students and residents.
• Events — Jersey Shore Hurricane News, New Brunswick Today and the Lo Down tested events using a portion of their experimentation grant and report wanting to do more events.
• Crowdfunding — New Brunswick Today and the Lo Down used portions of the grant to develop and launch crowdfunding campaigns (more on that below).
• Staff — A number of the sites invested a portion of the money on people. For some, this meant bringing on someone to help with daily reporting so the main staff could focus more on the business side. For others it meant investing in professional development around business skills or sales. Sites reported that being able to pay staff helped legitimize their work in the eyes of advertisers and their community.

Across the board the sites reported that the $5,000 allowed them to invest in expanding the products and services that they could monetize with advertisers or local residents.

GIF by Jim Cooke, via Gizmodo

C. CROWDFUNDING

Two of our partner sites undertook crowdfunding campaigns on the Beacon platform. These were experiments both for the sites who had never done crowdfunding before and for Beacon which hadn’t worked much with local news organizations and wasn’t sure how successful crowdfunding would be at the hyperlocal scale.

Both sites met their goals — one raised $15,000 and one raised $27,000 — and we provided $5,000 matching grants to each. The campaigns were not easy but the benefits went well beyond the dollars raised. We’ve documented the details and strategies of both campaigns extensively in earlier blog posts. Through this process we learned a number of really important lessons:

• Hyperlocals Can Crowdfund — The most basic lesson from these campaigns (and successful local crowdfunding efforts at the Tucson Sentinel and Charlottesville Tomorrow) are that local communities are willing to step up and donate to hyperlocal crowdfunding campaigns whether they are for profit or nonprofit. Beacon noted some surprise with how passionate local people are about their local outlets and believes there are ways to continue to build on that passion.
• Crowdfunding Is About the Crowd and the Funding — Both of the sites were happy to have the dollars from the campaign, but more than that, they were taken aback by the great feedback they got from their communities. These were as much about “friendraising” as fundraising. As a natural progression of this experiment, we are exploring how crowdfunding can be a launch-pad for membership programs.
• Crowdfunding as Storytelling — Most journalists are not good at talking about themselves and their work. They don’t want to be the story. But crowdfunding forced these sites to tell their story and make the case for why their work was important and what impact it has on the community. It meant creating marketing materials which they continue to use and build on and finding new language to help invite people into the work.
• Crowdfunding Can Help Launch an Events Strategy — Both sites had also wanted to develop an events strategy, but it was hard to prioritize or know how to get started. Their crowdfunding campaigns gave them a perfect springboard, and a built-in audience with which to test out ideas. Both newsrooms held an event at the end of their campaign to thank contributors and are planning future events now.

The one-off nature of crowdfunding means it will never be, by itself, a strategy for sustainability, but we believe that we’ve shown it can be an important tactic to help give a newsroom seed funding and build community support. More work needs to be done to develop best practices to turn crowdfunding donors into ongoing supporters and members (see Radiotopia’s recent effort).

D. ADVERTISING

At the local level there is still a lot of potential for news sites to creatively help connect audiences and local businesses. For the foreseeable future, advertising will continue be an important part of the local media business model — but no site should try to make this its only revenue stream.

Sales Academy — Local news sites face a series of challenges in terms of creating sustainable ad-sales strategies. The journalists we worked with asked for more support and resources to build out their sales capacity. In response, we funded Montclair State University’s Center for Cooperative Media to develop and host a sales academy. The two-day training, followed by eight weeks of additional coaching proved very popular and incredibly useful. Many participants have reworked their sales strategy and are putting more time and energy into the business side of their organization. This may serve to be a new model for sales training for local news.

However, the key for many local sites is also to hire a sales person. Research by Michele McLellan suggests that sites with dedicated sales staff are more sustainable. The hurdle of hiring a sales person is one of the thorniest and persistent challenges for local news sites. Our sites struggled with how to find the right sales person and to bring them on with limited resources. To that end we also held two webinars on finding and recruiting sales people.

Foundations as Advertisers — Foundations often support their grantees’ galas by buying ads in the program book; we realized that a similar way to support our partner newsrooms was to buy ads to promote the Dodge Foundation’s national poetry festival. The ads supported the journalism we believe in, while also helping to promote and support another program area at our foundation. We believe this could be a valuable strategy for other community, regional and national foundations around the country to support journalism while advancing their own programmatic goals. Community foundations can help raise the visibility of their grantees, such as food banks and other social service organizations during the holiday season, supporting the outreach and publicity goals of those grantees while also helping strengthen the financial sustainability of local news. This is a win-win situation.

In the Federal Communications Commission’s report on the information needs of communities Steve Waldman argued that some portion of “existing government advertising spending should be targeted more toward local media.” According to the report the government spent roughly $1 billion on advertising in 2005. There may be no comparable statistic for what foundations pay for advertising and marketing, but if even a small portion of foundations dollars were redirected to support local grantees through local media it would be helpful to their grantees and to the local media.

None of our partner sites could be called sustainable based solely on these investments and developments. But all of these new efforts are pointing in some hopeful new directions, and we expect to see them develop and expand. What this year has shown us is that through fairly targeted strategic investments, you can help begin to transform local newsroom business models. Getting to full sustainability takes time, however, because it involves more than just finding and maintaining new revenue streams. Sustainability also requires a culture shift that reorients newsrooms around service to their community.

This is part two of six essays documenting what we have learned about building new networks for local news and fostering more creative, sustainable and community driven journalism. In the next essay we’ll discuss how we are fostering more community driven reporting in New Jersey. Read part one, part three, part four, part five and part six.

Molly de Aguiar (@MollydeAguiar) is the Informed Communities Program Director and Josh Stearns(@jcstearns) is the Director of the Journalism Sustainability project at the Geraldine R. Dodge Foundation.

The Dodge Foundation’s Informed Communities grants seek to strengthen and grow the New Jersey news ecosystem and support local journalism as a critical space for innovation, creativity and community building. For more information on this work, visit the Local News Lab and the Dodge Foundation’s website. Sign up for the Local Fix weekly newsletter here.