Monday, March 8, 2010

Aggregating and monetizing local news pages; a talk with Outside.In's head of business development, Camilla Cho

It really caught my attention: a help-wanted ad for an advertising sales rep with local media experience . . . not from a newspaper company, but from news aggregating company Outside.In.

Outside.In is looking to hire their first advertising representative to call on interactive agencies in order to sell the millions of impressions they have available on their local news pages -- pages found not only on their own web site, but on the sites of newspapers and broadcasters that use their services to create hyperlocal news pages through their Outside.In for Publishers platform.
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The company, backed by Union Square Ventures and other venture firms, as well as CNN, works with newspapers and local broadcasters by creating aggregated local news pages drawn from media outlets as well as bloggers and social media networks.  I spoke with Camilla Cho, VP, Business Development, about her company and her experiences working with the media industry to create these new local news pages.

"We realize that everyone is working on a million things, we realize budgets are not super high," Cho said about her company's media partners.

"When it comes to local, when it comes to hyperlocal, there are a few key areas that they (publishers) are always looking for. That is aggregation, and the capability to really define their neighborhood," said Cho. "And then they want to create hyperlocal, quality pages for monetization for better revenue."
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A local news page from NBC4 in Columbus OH.

By having hyperlocal news aggregated by a company such as Outside.In, publishers do not need to assign individual editors to each neighborhood or zip code news page created. But for Cho, the key to creating a valuable local news page is still good editing -- or curation, to use the proper term.

"We provide a curation tool through Outside.In for Publishers, and the curation platform makes it as easy as literally clicking a button to suppress any feeds you don't want, you could suppress at the story level or at the feed level."

"Aggregation is great, automation is great, but there has to be some level of curation, some human curation that's layered on top of the automation and aggregation to make a meaningful set of content for the users to consume," said Cho.

The aggregated content originates from some 40,000 RSS feeds, according to the company, as well as content from bloggers writing local news content. Bloggers can sign up on the Outside.In to have their content considered for inclusion, then geo-tagged so it can be properly fed onto the proper local news pages.  The obvious advantage for bloggers to join Outside.In for Bloggers is having traffic driven to their sites.

But what does Cho tell prospective clients, publishers and broadcasters, about the reasons they should include this content?

"Why not harness the power of all of the other local publishing going on in your market, whether it be from your competitor, whether it be from a local blogger, whether it be from the radio station. If you can't cover it all yourself, we make it really easy for you to tap into the other sources that are covering on that story."

"We totally believe in the whole notion of the ecosystem, in terms of driving traffic all over the ecosystem back and forth to one another," Cho said.

Since the content is derived from publicly available RSS feeds, a newspaper publisher's online content is open to aggregation -- either from search engines such as Google and Yahoo, or from news aggregators. As a result, a paper's content is open to aggregation from their news competitors, and vice versa. Unless a publisher is willing to turn off their RSS feeds, there is no way to avoid having content available for aggregation.

But as Cho puts it to her clients "You could be the Google Reader for your market."

Outside.In offers publishers and local broadcasters three models for creating local news pages.

"The first and easiest to work with us," said Cho, "is the free model. You get the publisher platform for free, and all of the great aggression and curation capabilities. However, the output, the widgets that get produced from the platform, will contain some ads that we will bill. So it's an ad supported model."

In this model, Outside.In aggregates news content for your neighborhood pages and supplies the content within a frame. Within that frame is also some advertising originating from Outside.In.  Surrounding that window is the publishers frame. In this way, the page contains your design, your brand, and allows the publisher to sell local advertising -- to monetize the hyperlocal news page.

For now, Outside.In is utilizing Google AdSense and other platforms to put ads in their portion of the local news window. But, as is clear from their help-wanted ad, the company wants to start to go after actual advertising dollars themselves. The logical buyer of this advertising would be national companies who would want to have localized advertising appear -- for instance, AT&T could advertise across the Outside.In network, with ad showing their local AT&T stores appearing.

"We have no intention of competing with local sales team," promises Cho. "Now that we have a lot of inventory under our control, and we have grown the network to a healthy size, and due to the fact that some publishers struggle to generation healthy RPMs on their own, we think we can provide some form of revenue by boosting our sale efforts."

The second model Outside.In offers is a developer model: Outside.In will provide the aggregated content, ads are stripped out, and the publisher is responsible for all monetization efforts.

"The third way, actually a new revenue model we're introducing this year with our publishing partners, is where we are doing the monetization generating online revenue on their hyperlocal pages for the publishers," Cho stated. "We are starting to realize that a lot of publishers are struggling to generate healthy online revenues on their hyperlocal and local pages. So what we will do is power the entire local pages for the publisher, all within their brands."

In this way, Outside.In provides both content and sales effort. It is essentially a revenue share model: you provide the site, they provide the pages containing content and advertising, and together you share any revenue.

This points out one of the problems newspapers often face when creating these new types of partnerships: often the relationship with the vendor originates from one department such as editorial, or interactive. Unless the sales department is brought along, from the beginning, these types of project face challenges.

One concern many sales teams have is the low revenue generated by local advertising versus both national and what I will call regional advertising.  That is, a quarter page ad that appears in the full run newspaper might generate large dollars, versus an online ad that only appears when a reader calls up a hyperlocal news page.

For me, this screams telemarketing, but many newspapers are not organized to sell hyperlocal advertising and will need to reorganize themselves in order to succeed.  A couple options would be to have the vendor, in this case, Outside.In do all sales; another might be to outsource the sales to either independent contractors, or even to local competitors. I would prefer internal telemarketing sales, but getting media executives to support their internal sales efforts is getting to be harder and harder.

Camilla Cho and I chatted a bit about some of the things she sees when she attends industry functions, but I'll leave that for another time. Suffice it to say, that bringing in the sales teams up front when creating any new online news pages is the best way to guarantee success.