In July, it closed Hill Now, its site covering the Capitol Hill neighborhood, and merged its coverage with another one of its sites, Borderstan, which focused on a handful of neighborhoods near Dupont Circle. Then, in December, with revenue flagging, the company also shut down Borderstan, which was run by two full-time employees and averaged 85,000 unique visitors per month.
“We were not generating enough advertising revenue to pay for the brand of journalism we were creating,” Local News Now founder Scott Brodbeck told me.
The company still operates two hyperlocal sites in D.C.’s Virginia suburbs — ARLnow in Arlington and Reston Now in Reston. The company has five full-time employees, including Brodbeck. One of the former Borderstan staffers has joined ARLnow; the other has left the company.
Local News Now is blessed with unusually fertile ground for a local news site; the D.C. metro area has the highest median income of any in America, and its suburbs are even richer. (Arlington County has the sixth highest median household income of any county in the United States. Fairfax County, which includes Reston, ranks even higher, third.)
Local News Now exceeded $500,000 in revenue for the first time in 2016. “The sites in Virginia are solidly profitable and the company itself is profitable,” Brodbeck said. ARLnow averages 250,000 unique visitors per month and Reston Now has 70,000 uniques.
Brodbeck and I discussed the thinking behind the decision to shutter the two D.C. sites, what’s next for Local News Now, and why he thinks digital advertising can still be a sustainable revenue source for hyperlocal outlets. Here’s a condensed version of our conversation, edited for length and clarity.
These sites are both profitable. They’re both going in a great direction. They have big readerships. We’re going to be doing more in 2017 with these sites. We’re going to do more with multimedia and video. We’re going to invest a bit more into some of the reporting, and find other ways to make readers and our advertising clients happy.
In D.C, we’re in a bigger city. Our brand is community journalism; what we were doing in D.C. was neighborhood-level journalism. There were lots of readers who appreciated that, but we didn’t find much of a market for advertisers who wanted to reach that audience. The advertisers we have in Arlington and Reston are very focused on reaching audiences in Arlington and Reston, respectively. We do have some advertisers in both areas who are trying to reach readers in multiple places, but by and large, they are very focused on these specific geographies. There was a little less of that in D.C. We didn’t find advertisers who wanted to advertise in the specific neighborhoods that we were in to the degree that we needed to fund the reporting.
We’re going to back to the drawing board a bit in terms of what we want to do next. We know we want to keep improving what we’re doing in Arlington and Reston. At this point, launching another owned-and-operated site is not really being considered, but we are considering maybe working with other online local publishers who could use some of our expertise and resources on the tech and sales side, executing on advertising and sponsored content campaigns.
We’ve been ahead of the curve on, for instance, going HTTPS for our hosting, doing sponsored content before it was popular. There are other publishers who could benefit from that.
The other lesson is that every market is different. Maybe not every market is right for the kind of journalism we’re doing. We want to be doing local news where we have full-time paid employees with benefits who are earning a living reporting the news. I believe in a high-quality future for local journalism.
I know that there are others out there who want to figure out how to produce local content with as little investment as possible. I believe that readers are not going to pay enough attention to low-quality content to make it worth anyone’s while. We want to be producing local news that everyone in the community would want to read. When I look at my unique visitor numbers in Arlington and in Reston, it’s pretty darn close to, if not at times higher than, the population of those areas. Having that high market penetration speaks to us doing something right.
We are making attempts to diversify revenue. We’ve been doing some events, looking into the possibility of a subscriber revenue component, but we haven’t pulled the trigger on anything yet. I think a variety of revenue streams is important. For now, even though it’s not perfect, advertising is paying the bills, and until there is a better solution we’re going to stick with it. But being nimble is very important. You don’t have to chase every trend, and we make a point not to, but keeping on top of what readers want and how they get their news and what advertisers want and how to best get their message to readers is something you absolutely have to do.
We’re uniquely positioned in local when it comes to sponsored content. When sponsored content is truly local, it’s automatically relevant to someone who lives in a given community. I’m less bullish on some of the national sponsored content efforts, like a large corporation writing a post on a website out there. When you get down here to a granular, more niche level, people actually read the sponsored content we’re writing because it’s of interest to them. We’re definitely continuing with it.I would argue that the same applies to banner advertising. It gets a bad rap as not particularly effective. I’m sympathetic to that on a more national level. It seems like the biggest thing is programmatic and targeting. How do we target specific users? That is a very inexact science. On Twitter not too long ago, I was going off about how the ads I see on the web, Facebook excluded, if they’re targeting to me, I have no idea how they’re doing the targeting.
On local, it basically is targeted. It’s automatically geotargeted. If we have an advertiser who is in Arlington and trying to reach people in Arlington: Guess what? We reach people who live and work in Arlington exclusively. I think relevance is important in advertising, and local is automatically relevant to connecting local advertisers to local readers. I think that display advertising is going to continue, though I hope we continue to find other ways to connect our clients with our readers.