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Nov. 17, 2016, 11:49 a.m.
Business Models

At Texas’s thriving Community Impact, print is the focus, not digital (and that’s the point)

“We don’t have a dead-tree edition at Community Impact. We are alive.”

John Garrett would never, ever refer to a newspaper as a “dead-tree edition.”

“That really gets on my nerves,” said Garrett, the founder of Community Impact Newspaper, which 1.7 million households in Texas now receive in their mailboxes each month. “When newspaper executives say ‘dead-tree edition,’ they’re telling every ad buyer out there that the product is not any good.

“We don’t have a dead-tree edition at Community Impact. We are alive. And I’ll tell you what: If the tree’s gonna die, I would bet that they would want to have a Community Impact Newspaper printed on ’em.”

Garrett and his wife, Jennifer, launched the first edition of Community Impact Newspaper, covering Round Rock and Pflugerville, Texas, in 2005. The idea, as Nieman Lab wrote in 2010, was to “take the community feel of a local paper, cover neighborhood news the big papers won’t, and focus on business and development stories relevant to a typical resident.” The product, with highly targeted local advertisements, was to be delivered via direct mail.

Six years later, that’s still the business model, but Community Impact has expanded quite a bit. It recently launched its 23rd edition, in Richmond, Texas, and has 186 employees and 11 open positions (that’s up from 7 editions and 63 employees in 2010). And this year, to help it expand further, Community Impact committed fully to dead-tree-ness and took the unusual step of opening its own printing plant. The 36,000-square-foot, $15 million facility opened in October in Pflugerville, next door to Community Impact’s main offices. (Here’s what the print product looks like.)

“We were outgrowing the capacity of the printer we’d worked with over the years,” Garrett said. “We traveled the Southwest United States and looked at facilities and were really thinking, man, we’re in trouble if something happens with our current provider.” His team went to New York to watch Goss Magnum compact presses, which they ended up buying, in action.

“The day we got back from New York was the day the [Austin American-] Statesman decided they were going to shut down their plant,” Garrett recalled. “That, to me, was just a sign that I needed to control my own destiny.” (In a Medium post, he wrote more about his decision to build the plant; Community Impact also has a section of its website devoted to its printing press.)

It’s not that Community Impact is ignoring digital. “We believe that digital is a piece of the puzzle,” Garrett said. “But we need to have a healthy print product.”

This year, David Arkin, a former GateHouse Media executive, joined Community Impact as chief content officer. One of Arkin’s roles is to beef up Community Impact’s digital presence — not because the print product is in trouble, but because digital is an opportunity, especially since the print product only comes out once a month. Arkin came on in July. By October, site traffic was up 100 percent over the same time in 2015.

“There were a lot of elements in print that could translate well to the web if we could not just repurpose them after the paper came out, but have this flow of content [online] the month before,” said Arkin. He sees particular potential in Community Impact’s coverage of local government, transportation, and business openings and closings. For the 2016 presidential election, Community Impact created an election section with liveblogs, sample ballots, maps of polling locations, campaign finance reports, and voter ID information; all of that information lived alongside Community Impact’s reporting about the election. “I’ve been focusing on taking a firehose of content and figuring out how to optimize it and organize it,” Arkin said.

community-impact-election-takeover

Arkin is also leading Community Impact’s efforts to cover more breaking news. The company recently hired its first devoted Austin city hall reporter. “Those duties were previously part of our paper in Central Austin, but we saw a need and a big opportunity to have somebody solely focused on it,” Arkin said.

It is these efforts to focus on both breaking news and second-day stories, and to delve more deeply into topics like local government, that Arkin sees as being one huge differentiator between Community Impact’s website and hyperlocal sites like Patch. He mentioned original content (“if we take a press release, we’re going to do original reporting around it”), focus, and quality. “A lot of the industry’s loss has been the quality assurance that happens here,” he said. “One thing we think about is, ‘How does the average resident think about this story?’ Part of it is making sure that everything is accurate and the grammar’s right, but part of it is the tone of the story: Is this story right for this audience? Does it make sense? What is the question we’re trying to answer? The Patches of the world, they’re trying to be everything to everybody, doing crime, sports, all of that. We’re trying to focus on niches that we think fit that average resident.”

These niches are on full display in the monthly print product, where Community Impact takes direct advertising to a new level. (The company also sells digital ads at the individual market level, for a fixed cost per month.) The Round Rock edition of the paper reaches 100,000 households, for instance, “but if you own a Mexican restaurant and you want to reach a 5-mile radius around it, we can do a 10,000-piece drop right around your store, very affordably. We’ve gotten very good at that,” Garrett said. (Community Impact runs its own information management system that makes this type of targeting easier.)

In addition, Community Impact’s new printing presses can zone editorial content at the carrier-route level. “If we’re covering two school districts, we’ll be able to piece those districts up,” said Garrett, so that recipients living in different school districts in the same town would receive papers with different covers and news targeted to the school districts they’re in.

The ability to do such extreme targeting means Community Impact’s in-paper advertising is a viable competitor to Facebook. “A business owner can run, for $500, an ad in my paper and reach 80,000 households around their business,” Garrett said. In his Medium post earlier this year, he wrote:

I call it a battle of the Coffee Table vs Mobile. I can’t compete on the mobile platform (yet) — but I can get inside that home and with a quality and useful product I can be sitting on their coffee table. If my prospect wants to reach someone in her 30s with a good household income who lives near their store, I can compete with and beat Facebook and Google.

Local advertising, he believes, is an area in which the newspaper industry has failed. “We’ve chased shiny objects. We’ve chased partnerships with folks that are really our competitors. We haven’t done enough to create value for the local advertiser.

“The reason why a lot of the industry is failing on the print side is, what do you expect when you cut content and cut distribution and when you raise the prices and continue to cut the core product? Do you expect advertising revenues to increase? It’s laughable. But let’s just go ahead and spend some more money on digital? Good luck with that. You can make money on the digital side. But it can’t pay the salaries we need to do the important work we’ve got to do. And none of that has changed.”

I asked Garrett if Community Impact has considered expanding into new sources of revenue, such as events — the types of things that struggling news organizations have turned to to connect more directly with their readers.

“Where do you live? Up in Boston? Every time I talk to someone who’s never gotten a Community Impact newspaper, it’s really hard, because you’re thinking, okay, it’s just a community paper,” he said. He then pointed me to a recent survey in which the city of Round Rock asked its citizens how they get their news. Community Impact was far and away the leading source, beating out the Statesman.

“We’ve built a really good brand. We haven’t said, okay, let’s go take advantage of that at the community level with events,” Garrett said. “It’s just — there’s probably an opportunity to make money there. But I really want to connect with the readers in their homes. We haven’t needed the events to supplement our growth. It’s probably an opportunity for us — but man, I’ll tell you, I’ve got lots of opportunities. And I’m trying to choose which opportunities I want to pursue.”

Photo courtesy of Community Impact Newspaper.

POSTED     Nov. 17, 2016, 11:49 a.m.
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