The Neighborhood Watch

Why do community news sites, once hailed as the future of journalism, so often flop?

Halley Griffin covers Tacoma, Wash., and runs social media in Tacoma for Seattle-based Fisher Communications. Photos: John Keatley

Spelunking equipment, climbing gear and snowshoes are Steve Sutorius’ life. That’s clear watching him as he peddles outdoor-sports merchandise in his shop, Wildernest, on this 10-mile-long jewel in Puget Sound just off the coast from Seattle.

Somewhat further down his list of priorities is his marketing strategy, which, for Wildernest, includes ads on the hyperlocal news site Inside Bainbridge, whose content includes such stories as the one about a woman who nearly rammed her car into a store on Winslow Way called Danger. (Gotta love small-town news.)

While such coverage might not win journalism prizes or bring the government to its knees, Inside Bainbridge “does a really good job of putting out local content, and I wanted to support another small business,” explains Sutorius. More to the point, the payoff for his business was considerable—and quick. Sales grew 15 percent in just the first month his ads ran, while clickthroughs on his store’s website spiked 60 percent. “This,” he says, “has been a cool partnership.”

Five miles away, Inside Bainbridge’s co-publisher Julie Hall considers the experience of operating the website over the last year and a half. In her home office, she pedals her stationary bike as she bangs out another local news item—at the same time she pedals hard to make a go of her site. “It’s personal for me,” she says. “When we started out, we didn’t know how quickly it would grow and how well it would be received.” The Chicago Tribune and Reuters have since republished some of her stories. And yet, the site’s long-term prospects remain anyone’s guess. Shrugs Hall, “We’re still figuring out the money end of it.”

The same goes for many of those who have thrown their hats into the hyperlocal movement. Far bigger news operations that got in this game with so much fanfare now find themselves reassessing their approaches to community news, among them Seattle-based Fisher Communications. Fisher’s string of radio and TV stations in the Pacific Northwest has been hyped up about hyperlocal going back to 2010, though the company is revamping the business in the wake of a slide in corporate revenue last fall. More famously, AOL’s ambitious but money-draining Patch, made up of more than 900 community portals coast to coast, has significantly scaled back.

“What I see happening is a rationalization of [the hyperlocal] market,” says Dave Michela, vp of business development at Internet Broadcasting, which provides online content management for local media companies. Most players are still in the process of figuring out just how micro to go with news content and how many employees they can afford on the news and ad sales sides—and how to make these businesses viable.

This period of adjustment has seen some outright surrender. Among the more high-profile cases is The New York Times, which handed over operations of its New York-based community site to City University of New York faculty and shut down another hyperlocal enterprise in New Jersey. Meanwhile, Allbritton Communications folded its Washington, D.C.-focused into the site of its D.C. ABC affiliate WJLA.

Yet despite the high-profile failures, others continue take the plunge, notes Gary Cowan, svp of product and marketing at Datasphere, which provides media companies with the technology to maintain hyperlocal sites as well as telesales services from its hub in Seattle, offering super low ad rates to small and medium-sized businesses (SMBs) around the country. Owned in part by Fisher, Datasphere’s roster of media-company clients has grown from 90 to 136 in just the last year.

Like Wildernest, many local businesses put great value on advertising via these sites. Among them is Steve Gechlik, who advertises his Sunshine Carpet Cleaning in Tucson, Ariz., on site Downtown Tucson. After Datasphere helped Gechlik create how-to videos for the site, “I got 20 more calls a week,” he says. “You can imagine how my business grew after that,” adding, “I’ve actually lost time playing golf because I’ve had to work.”

Then there’s Bistro Ten 18 in New York’s Morningside Heights neighborhood. One of its owners, Craig Skiptunis, relates that when the restaurant advertised an all-the-mussels-you-can-eat special on neighborhood sections of the site New York, sales grew ninefold. While the clickthrough rate was less than what the business gets via Yahoo or Google, says Skiptunis, “I believe [’s] are high-quality users. If they click, they’re more likely to come.”

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