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Starting a Local Site: Creating a Budget

April 23, 2010

As we’ve said before, it’s easy to start a local site. Free or cheap blog platforms and tools allow you to be up and running and covering a local community in a matter of minutes.

But if you want to sustain the site long-term, you need to think early on about how to run that site as a business. And the first step in that is to draw up a budget for the site.

Uh-oh, you say. Sounds complicated. The only budget you ever dealt with was your newsroom’s daily news budget, which was about words and stories, not numbers. Or you slogged through a government budget or two or three as a reporter, but you can’t imagine how to create one from scratch.

Take a deep breath. This isn’t that hard. But it’s essential.

First of all, you need to figure out what you’re going to need to spend money on. Think this through, and make a list, estimating the annual costs (which might change over time). Generally, you only need to estimate the first year, though it doesn’t hurt to plan a couple of years out. Expenses might include:

  • Hosting (i.e. any annual payments for your blog platform)
  • Equipment and software or site tools
  • Site design (don’t get hung up on this—the standard blog platforms cover this quite well, for free or very little)
  • Payments to site contributors, if any
  • Office supplies
  • Travel and entertainment (even if it’s just to cover coffee with sources)
  • Marketing (very important)

Now, let’s move over to the other side of the ledger: Revenue. How much advertising do you expect to sell? What other possible sources of revenue will you have? Make a list, and think about it carefully. Without money coming in, you can’t pay those expenses.

On all of these items, be as detailed as possible. For instance, figure out all of the possible marketing efforts you want to do, and what they might cost, rather than just throwing a lump sum at “marketing.” Think about different ad sizes and prices, and how you can get advertisers sharing different ad units. (We talk about this a lot as part of GrowthSpur ad-sales training. End of plug.)

Incidentally, it helps, if this is psychologically possible, to try to do expenses and revenue very much separately of each other. That way you can be the most realistic about what’s coming in and going out, rather than shaping one to fit the other. Once they’re done, of course, they need to balance—or turn a profit.

Now comes the hardest part: The reality check. Be very honest with yourself as you estimate the numbers in your budget. Then go through it again, being even more honest (everybody always underestimates marketing costs and overestimates advertising revenue). Then go through it and try to cut it a bunch (Do you really need personalized stationery? Are you paying correspondents way too much? Will they work for free? Can you possibly sell that much advertising in the first year? Be brutal.). Then run it through the honesty test again. It ought to be just about baked at that point.

You can lay it out on a monthly basis, if you want, or simply create an annual budget. Use an Excel spreadsheet, or Quickbooks (or even Quicken), to plot it out. There are some generic budget templates online that might help you. You can Google for more help about drawing up a budget—there’s plenty of expertise out there.

Don’t overthink all of this—a budget is mostly an educated guess. Just try to think of anything that should be in it. You generally don’t need massive detail—just categories. But understand how you came up with those categories, and be realistic about justifying what’s in them. (As they used to say in school, be sure that you can show your work.)

Some potential pitfalls: You’re almost certainly going to be overoptimistic about revenue—you won’t sell as much advertising, or attract as much traffic, as quickly as you think. You’re probably going to find that you need to do a lot more marketing than you expect (but look for cheap marketing aids, like social networks, getting involved in local events, etc., rather than envisioning expensive marketing campaigns).

And rid yourself of any illusions that you’ll be able to pay your friends—or yourself, for that matter—a living wage for contributing to the site. You may get there eventually, but probably not in the first year or two. One of the biggest mistakes new local site operators make is thinking they can pay for stories and photos at the same rates traditional media outfits pay for them. Not going to happen, and doing an honest, realistic budget will help you understand this from the jump. You’ll realize quickly that you need to look for volunteers, or promise token payments. You’re going to be living on a shoestring for the first year or so, at best. Beware of Champagne tastes on what’s going to be very much a lite beer budget.

Even if you run your site essentially as a hobby and public service—and like it or not, that’s how you’ll start out—it’s helpful to go through the budget exercise to keep yourself from running into any unpleasant fiscal surprises later. It’s a good dose of reality and planning that can help you really understand what it takes to provide coverage of a local community. You can run a great site for practically pennies, not to worry. But be sure you know exactly how you’re going to do that. Starting off with an honest budget will help you get going in the right direction toward success.

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Getting Started With Local Ads on Your Site

April 12, 2010

In working with our first group of GrowthSpur partner sites, we’re hearing a common theme: Many startup hyperlocal and niche site operators have barely thought about how to effectively add display ads (and their revenue) to their sites.

This is a key part of what we help sites learn how to do. But there are a few things sites can do on their own to make themselves more ad-friendly.

It’s easiest, of course, to address the design and technology issues that support ads before you launch a site. But it’s not too hard to retrofit an existing site, even a simple neighborhood blog, to be ad-ready. Here are a couple thoughts from the GrowthSpur team, as shared with our partner sites in recent GrowthSpur webinar:

The key questions: How many ad units? Which sizes? And where should they go?

We don’t dictate any of this to our partners—but we provide plenty of advice to them based on our combined years of running local sites. A sample:

  • Bigger is better. So is prominent.
  • But small units, priced right, have their uses, too.
  • Stick to standard-size ad units specified by the Interactive Ad Bureau. Think of those standards as the web equivalent of a 30-second TV ad—any station anywhere can run them, without forcing the advertiser (or ad agency) to reedit them to fit an irregular, non-standard hole.

We’ve got a lot more recommendations on ad sizes, placement and design. They fill many of the 200-plus pages of our site-operations “cookbook,” and we back them with training webinars and other help. If you want to find out more about becoming a GrowthSpur partner, drop us a line.

Moving Beyond Traditional Display Advertising: It’s All About ME

April 5, 2010

To date, nobody has found the holy grail of advertising models to support thriving hyperlocal sites. Traditional display ads, even with rich media, are only a start.

For the most part, these are still simply online facsimiles of offline ad types. Isn’t a banner ad nothing more than a print display ad brought online with a few bells and whistles? We need ad types that take advantage of the unique attributes of today’s digital media—whether it’s the social nature or immediacy of the web.

There are some emerging models that excite us at GrowthSpur, because they truly take advantage of the medium even if they are borrowing concepts from the past. We think local sites should begin moving beyond traditional display ads by deploying three of these new formats: coupons, group buys and deals of the day.

All  help overcome the issue online ad sellers frequently face. Sites may have done a terrific job of delivering traditional ads, but too many advertisers still say “Gee, I’m not sure if that ad worked or not.”

What these three examples provide are models that are easily understood by small business owners. In a world where the revenue per customer is relatively low, a local publisher can ill afford to spend a lot of time convincing an advertiser that he or she got a great deal. At GrowthSpur, we believe that “it’s all about ME” —the most effective revenue generators are going to be Measurable and Easy from the advertiser’s perspective. Coupons, group buys and deals of the day provide these sort of easy measurement of effectiveness, by driving identifiable customers directly to the advertiser’s front door.

We aren’t the only ones excited about these ad models. Companies such as Groupon and LivingSocial are some of the hottest start-ups around, with rapidly growing audiences and revenue. This is enabling them to raise significant expansion capital.

This latest advertising revolution should seem familiar to anyone interested in local media: The last major cycle of disruptive companies—Monster.com, eBay, craigslist and others—decimated the classified-ad business, one of the traditional major revenue streams of local media. At GrowthSpur, we are working with local publishers to ensure that the next major cycle of disruptive ad models are a tremendous growth opportunity.

Now for the three measureable, easy models:

Coupons: The most straightforward and similar to offline models. Everyone likes a deal, whether it’s a two for one or 25% off of you next meal at the deli. A variety of white-label providers are offering their platform to publishers to streamline this process. The best of them don’t just replicate a print ad online – they offer easy sharing with friends and even “send this to my mobile phone” functionality.

Group Buys: Groupon and LivingSocial are the most active and well-funded. The basic idea is a business offers a great deal on some product/service—a $30 restaurant certificate for only $15, or three fitness classes for $29—but only if a minimum number of people sign up. Naturally this encourages consumers to share the deal with their friends, to ensure that all of them get the deal. The publisher/vendor collects the money. At the end of the sale period, the publisher cuts the business a check for an agreed-upon split, typically 50/50.

Deal of the Day: A variation on the theme above. Typically a publisher makes one offer per day that is a great deal for the consumer. The advertiser offers this deal exclusively through the publisher—so the business owner knows that any consumers asking for that deal came from that offer. In many cases, all the consumer has to do is mention the deal to get it.

We’re seeing sites ranging from Washingtonpost.com (working with LivingSocial) to uber-deals site Your Long Island charting a path in this realm. We expect to see a lot more as these and similar models prove themselves, and GrowthSpur is working on deals to supply these services to its member sites. Just remember that for it to work for the local advertiser, it’s needs to be all about ME.

A Basic Toolkit for Building Your Site

March 26, 2010

Some of us on the GrowthSpur team are hardware store junkies. We’ll start a fixit project around the house, run to the hardware store for a part, and get lost for hours contemplating all the wonderful tools and materials available.

Several recent conversations about how to launch a site reminded us of how site operators need their own “hardware store”—a place they can go to get the tools and parts they need to run their sites.

Fortunately, this doesn’t require a trip to the hardware store—or even a software store. The last couple of years have seen the release of tons of great—and often free—tools that can largely replace even venerated applications like Photoshop or Flash.

Here’s a collection of some of our favorites. Note that these are simply the stuff we like and use regularly. J-Lab’s Knight Citizen News Network covers even more. And Publish2’s Wired Journalists board is a terrific place to ask a question and get fast, smart responses. Check ‘em out. Got one you like? Suggest it in the comments, below.

Our faves:

General management tools

  • Google Docs
    • The word processor is an excellent way to collaborate with writers and freelancers, of course, without the hassles of email and confusion over which version is the live one. The shared spreadsheets are handy, too. Google Docs can be a bit finicky, but they’re hard to beat for free team-collaboration tools.
    • Even better, however, is how you can use the CREATE NEW FORM functionality to create an email or embeddable survey. It’s useful for taking the pulse of your audience. Or try SurveyMonkey for quick and easy polls.
  • Invoices to collect money from your advertisers? Try Freshbooks, or one of a dozen other free competitors.
  • Need to create basic financial statements (like a P&L), plus handy tax forms? Some of us like Outright because it plugs-and-plays nicely with Freshbooks; others are fans of the online version of Quickbooks. As with invoicing, there are a lot of choices in this space, and a lot of overlap between different products. (Note to prospective GrowthSpur partners: as good as these tools are, we’re adding even more powerful back-end financial management and billing tools to our systems. We’re even going to offer you credit-card processing.)

Site development and technology

  • WooThemes—Lots of terrific people are releasing pre-packaged designs, called themes, for every major blogging and content management system. For WordPress (and now ExpressionEngine), Woo’s folks go a step farther. They’ve built in easy-to-use widgets that make tweaking those designs a breeze. Also cool: a “playground” where you can build a test site to play around with one of their themes before buying. In particular, keep an eye on Woo’s “Canvas” theme. It’s already easy to customize—and rumor has it they’re considering adding in widgets to easily place all of the major standard ad units just about anywhere on the page. That would be a huge step forward. (Hey Drupal, Joomla and Blogger users: Yes, we know there are lots of those theme designers for your platforms, too. Trouble is, we just haven’t used those systems enough ourselves to highlight some of the best. Feel free to suggest your favorites in the comments below.)
  • For photo editing, Photoshop clearly is the pro’s choice. It also costs almost $700 for the full edition, and about $100 for the stripped-down Photoshop Elements. If you’re just resizing, changing resolution and tweaking a photo a little, a ton of free sites handle those jobs quite nicely. And did we mention they’re free? We like Pixlr, but that’s simply because we’re familiar with it. With all of the web services, you can probably finish a tweak in less time than it would take to simply launch Photoshop. If you’re a Mac user, the inexpensive Graphic Converter handles most of the basics for a fraction of the price of Photoshop.
  • Flash is the gold standard of sophisticated graphics program. It’s also expensive ($600) and notoriously tricky to learn. If you’re doing a major multimedia project, go with Flash. But if you just want to design a couple of slick-looking display ads or a simple interactive graphic, try BannerSnack instead. It’s free if you don’t mind their watermark on your finished product; if you do (and you should), you can pay a couple bucks per project or a small monthly fee.
  • CoolText creates free customized logos out of a string of text. You can easily tweak the colors, font and size. It’s not as good as a custom-made graphic logo—but if all you want or need is some stylized text, it works great.
  • iStockPhoto is one of the leading free and cheap stock photo outfits (there are other services, too). As with Bannersnack, you can pay as you go—from between $1 to $24 per picture, depending on size and resolution (for web work, 72-dot-per-inch resolutions work fine).  You can also pay a monthly fee for heavily discounted bulk purchases. Flickr can be a useful photo source, too—but be sure to read the licensing details on each photo. Some allow commercial use; others don’t. (We know of a major publisher that almost got hit with a lawsuit for ignoring those restrictions.)

The point in all of this: Free or incredibly inexpensive tools are out there for just about every function you need to run your site. Have favorites of your own, or a type of tool that we haven’t mentioned? Share and discuss below.

GrowthSpur: A Progress Report

March 16, 2010

We’ve been using this blog lately to talk generally about keys to success in running a local site or blog. But it’s time to be a bit more specific about what’s going on with GrowthSpur these days, because we’re really getting rolling.

A quick rundown:

  • We’ve got a bunch of great local sites all over the country signed up as partners
  • We’re working with the Miami Herald and other major newspapers and media companies to build local ad-sales networks in their markets
  • Our ad-serving and ad-network platform is up and humming and distributing its first ads
  • Our Site Operations Manual, or “Cookbook”—a highly detailed guide to running and monetizing a local site—is already helping our initial partners learn how to turn their sites into sustainable businessses
  • We’re launching a series of Webinars this week to provide more details and instruction on best practices for operating and making money on local Web sites—from the best way to design a site to maximize advertising potential to the inside secrets for selling ads to local businesses. And lots more.

These are key elements of the program that GrowthSpur is providing local sites and media partners to help them tap the billions of dollars of small-business advertising spending that is transforming local media. But you’ve got to be a GrowthSpur partner to take advantage of these tools.

If you run a local site and want to learn how to turn it into a successful business, drop us a note at info (AT) growthspur (DOT) com. We’ll let you know how to become a GrowthSpur partner site, get you on board for the Cookbook and Webinar series, get you into a local ad sales network, and get you access to tools that will supercharge your site, like automated ad building, credit-card processing, mobile distribution, video ads and local coupon/group-buying programs. We’re looking forward to working with you!

Sometimes the News Just Can’t Wait

March 8, 2010

Veteran journalist Bobbi Bowman has been working for the past few months to start a local site covering the town she lives in, McLean, Va. The former staffer at The Washington Post, Detroit Free Press and USA Today had made careful plans to launch her site later this spring, working with a site designer, recruiting contributors, laying the groundwork for community beats and thinking about ad sales.

And then news broke out.

Bowman learned that Fairfax County officials planned to close McLean’s library—a hub of community life in the Washington suburb—for more than a year while renovations are completed, and that they hadn’t figured out a temporary replacement. But few in town seemed to know about all this. Since newsies tend to be like fire horses, becoming instantly alert at the first sniff of smoke (or news), Bowman knew that she couldn’t wait a few weeks to get her fullblown site up and running. She had a Big Story. So she went to Plan B—and demonstrated just how easy it is to get into the community news business.

With help from J-Lab, Bowman got a crash course in WordPress, set up a quick blog using the name of her forthcoming site (The McLeanEar), and set to work letting her neighbors know about the library closing. Over the past couple of weeks, she’s posted stories about the closing and renovation plans; put up posters touting her headlines in the local supermarket, restaurants and other local businesses; handed out flyers around town to advertise her site; and kept pressing for answers about the library’s future. Just-started blogs aren’t exactly traffic magnets, but Bowman’s readership quickly topped 100 pages a day, and locals began adding comments to her coverage.

In the process, she scored another scoop: Local officials, who had been stymied in finding a temporary home for the displaced library, found one: in an empty storefront on a local shopping center. Now the community’s important gathering place had a home—and Bowman used McLeanEar to let her neighbors know.

Bowman and the McLeanEar are filling a gap in local coverage. The Washington suburb’s print weekly, the McLean Times, was folded into a much larger county paper, the Fairfax Times, four years ago; The Washington Post only writes about McLean sporadically. (Coincidentally, McLean was one of the first towns in which Backfence launched in 2005.) Bowman planned her site because she saw a need for better coverage of the town, whose population is about 38,000. Since neither the Fairfax Times nor the Post has written about the library closing or relocation, it looks like Bowman was spot on.

“This is true community journalism and my neighbors noticed,” she says. “They told me they saw the headlines, I put up in businesses all over town before 7  in the morning. I became a journalist because I thought I could change the world. Giving your neighbors vital to them comes pretty close.”

And here’s the kicker: The cost of Bowman’s hurry-up publishing effort: Zero. WordPress is free, and its built-in tools gave her everything she needed to start a basic site. Her office? A local coffee shop, most days.

That’s the lesson here. At GrowthSpur, we get asked a lot what it takes to start a local site, and a lot of people seem surprised when we say, “Go to WordPress or TypePad, start a blog, and start writing.” It’s just that easy. What comes next is hard—finding an audience and monetizing the site through advertising. Those require a lot of work (and, time for a plug: that’s where GrowthSpur can help turn a community startup into a money-making business through local ad-sales networks, tool and training). But getting going is as easy as launching a blog, adding local coverage and telling the community about it. Baby steps, to be sure, but they’re the most important ones.

As with many other local site entrepreneurs, Bowman sees clear parallels with smalltown community newspapers of yore. “I feel like an old-fashioned pioneer journalist,” she says. “I am the editor, reporter, market director and webmaster. I haven’t had this much fun in years.”

So Bowman’s now a local Web site editor and publisher, a couple months before she intended. An outbreak of news can have that effect. But she’s learning valuable lessons—and starting to build an audience—that will make the launch of her full site much easier. If you’re thinking of starting a local site, stop thinking—and just do it.

Make The Local Business Community Your Business

February 23, 2010

In almost every discussion with operators of hyperlocal and niche sites, we make the point that to become a business, you must be an integral part of the local business community.

That means attending meetings of the local Rotary and Lions clubs, the chambers of commerce and other business-development groups. You need to go as an interested participant, not just a disinterested reporter or, even worse, someone who’s just schlepping there out of a sense of obligation.

This week over at the Reynolds Journalism Institute’s News Collaboratory, West Seattle Blog’s Tracy Record makes the same point in first-person eloquence:

Direct and personal involvement with your local business community is an important part of entrepreneurial journalism, practiced this way, if you run a community-news/information website. NEVER in a mercenary “hey, we’re schmoozing you to get you to buy an ad” way. Businesspeople can see that from a mile away, and if you don’t see anything in a relationship with them besides “what’s in it for me,” just don’t bother.

GrowthSpur partners will find more advice like that from us in our Operations Manual.  Run a local site but not a GrowthSpur partner yet? Drop us a note.

While we’re at it: We also talk and write a lot about having a focus for your site—the best ones hone in on defined geographies or tightly drawn niches. One of us was reminded of this today, while helping his wife finish a freelance writing project.  Want to know the ins and outs of America’s theme parks? There are not one, but two separate niche sites devoted to them—complete with user reviews and nicely produced point-of-view videos of the roller coasters. Both are chockful of ads designed to appeal to roller-coaster aficionados.

So don’t revert to the “most things to most people” model of classic major media, the newspapers and broadcast stations that dominated the late 20th century. Instead, write for a narrowly defined audience—do what you do best—and let others handle the rest.

If you want to know a bit of geeky economics because why this works, check out our Tom Davidson’s blog post here.