If the emerging “hyperlocal” journalism upstarts are to succeed, they’ll need a business model.
Addiply, Waghorn’s next project following his MyFootballWriter.com site, built with his Norwich Evening News redundancy payout, isn’t trying to beat Google (NSDQ: GOOG) in the advertising game; it’s a purposefully simpler model than AdSense or AdWords…
In the latter case, Lichfield MP Michael Fabricant has bought a month’s text ad on the Lichfield Blog for £10.01. But with each offering, publishers keep 90 percent of all revenue generated, with the remainder split between Addiply and PayPal, which is used to handle transactions.
Waghorn says the whole process takes three clicks for a company to buy ad space and that the model requires no search engine optimisation — a month’s display ad on his own MyFootballWriter is £150 plus VAT, for example. “The classic local newspaper market get that… they don’t have time, interest, knowledge for someone to go on at them about PPC, CPM and all those things.”
For now, the platform is used by 11 UK and US hyperlocal blogs and a French property portal. But nationwide local publisher Trinity Mirror’s Newcastle Journal publisher NCJMedia has signed a deal to use it on its network of 22 postcode-based sites in the north east of England – an interesting win from a major publisher.
But why would Trinity Mirror (LSE: TNI), a regional and national newspaper group that attracts big brands, use such a small ad platform? About 25,000 unique users read the 22 North East sites’ local news and information each month and the company says Addiply offers a “simple and low-cost advertising option to business owners with that same ultra-local appeal”.
But Trinity has also been making widespread commercial and editorial cuts across its regional titles (there were 1,200 in 2008 alone), so it could also be that a simpler ad model is more efficient for a tightly budgeted major publisher’s small-scale local projects.
Waghorn tells paidContent:UK he wants the platform to be very much “part of the solution” when it comes to funding the next generation of online news: “For the people that this was originally aimed at, like the Lichfield Blog and Digbeth.org, the first aim is to see if we can get them on the first rung of the ladder, which is not for loss.”