Newspaper publishers everywhere are trying to do more with less, and the battle for local readers is a big part of their struggle, since it is one area where larger players aren’t as competitive and so theoretically there is a lot of opportunity. But even AOL, after pouring hundreds of millions of dollars into its Patch network, hasn’t been able to crack that particular nut. Tim Landon, a newspaper veteran and co-founder of an early online-advertising company called Classified Ventures, thinks he can do it with a hyperlocal aggregation platform he is building called Aggrego — a startup financed by the owner of the Chicago Sun-Times.
Landon said in an interview that he has been thinking for some time about applying the lessons he learned in building Classified Ventures to the editorial side of the newspaper business. Classified Ventures is a $3-billion ad-network company owned by several newspaper chains — including McClatchy, Gannett, Tribune Co. and Belo — that created specialized content sites like CareerBuilder.com, Cars.com and Apartments.com, starting in the late 1990s. And a big factor in its success, Landon says, is that the company was totally separate from the news or editorial side of its owner papers.
“We were able to be successful with CareerBuilder and Cars.com by building separate businesses, and so I thought doesn’t a similar model have to be applied in restructuring and re-engineering the news side? We all know it’s not easy… but it has to be something with separate DNA, something that leverages traditional assets but has enough distance and individual identity that you can succeed.”
Low-cost, data-driven news production
The Chicago Tribune felt the same way about its desire to outsource some of the hyperlocal content it was creating for its regional newspapers, so it formed a joint venture with a Chicago-based startup called Journatic and also invested in the company. The partnership caused a lot of controversy when it turned out that the service was creating fake bylines for some of its stories, which in some cases were being produced by contract workers in the Philippines and elsewhere. The Tribune stopped using the company for a time, but has since returned to working with Journatic.
What Landon (the former head of Tribune Interactive) is building at Aggrego is very similar to Journatic, in the sense that it is a separate content provider designed to fill in the gaps in the chain’s hyperlocal coverage by developing a low-cost system that involves a lot of data-driven aggregation. After he left the Tribune, Landon invested in Journatic, but decided the company wasn’t a good fit and chose to build something on his own, with the backing of Sun-Times‘ owner Michael Ferro (whose holding company owns about 90 percent of Aggrego).
Aggrego currently has about 45 employees, and about a third of those are “community news managers” who are responsible for producing content for several local communities each — the startup now covers about 33 local centers and hopes to expand to more soon, and ultimately wants to expand beyond just the Chicago area to other small communities in the U.S.
Unlike Patch, however — which Landon says suffered from an oversized cost structure that impeded its ability to scale — Aggrego news managers don’t create the majority of the content they are putting together for a specific community “channel” like Naperville, which was one of the first sites to go live. Instead, they pull in content from various sources such as the Sun-Times network of reporters and editors, as well as contractors or other third parties the newspaper works with, and online sources.
“What we call a community news manager is a little like a Today Show producer — that person is not expected to produce all the content for a specific community. They slot in content from the Sun-Times or one of its 40 suburban newspapers, or from independent contractors… so they have a news channel, a sports channel, video content, as well as specialized types of content like a wedding channel or a calendar of events.”
Not just cost-cutting but survival
The other part of the Aggrego model, Landon says, is the “web presence manager,” who is responsible for managing content for local advertisers once a member of the company’s sales staff signs them up. This content is created in much the same way that the news or editorial content is, and appears in the lineup of stories on a site like Naperville, where it is marked as “sponsored.” But the advertising and editorial content are handled separately, he said, both for ethical and business reasons.
One of the criticisms both the Tribune and the Sun-Times have faced as they have begun using services like Journatic is that they are being driven primarily by cost-cutting and are replacing journalists with low-paid “aggregators” and algorithmically-generated content (the Sun-Times was also criticized recently for letting go all of the paper’s staff photographers). But Landon says that those kinds of decisions are what the newspaper industry needs if it is going to survive:
“Other people will see the word aggregator pejoratively, but I feel that it’s the right thing to be doing when you’re trying to build a new model, and that’s what the industry needs. Yes, we are trying to build a new model for journalism, but I think that’s fundamentally the right thing to do — to just hunker down and say we’re going to do the same things as we always have, with the same people, that’s just intellectually dishonest.”
Post and thumbnail images courtesy of Shutterstock / Greg Henry