Consistent Quality vs. Huge Marketing Budget for Hyperlocal Sites

I’ve been involved with hyperlocal news for four years as the co-founder of Bowery Boogie and have seen countless sites come and go. Recently I stirred up some shit when I was interviewed by The Villager about the ending of the collaboration between NYU and The New York Times known as The Local East Village. I gave greater detail in my responses, but the sound bytes that wound up in the article came off as direct attacks on The Local East Village. While I don’t agree with some things they’ve done, all in all I personally have no problem with the people involved. I just get tired of seeing big sites fail in this market and people asking where it went wrong.

In the actual interview (but not published), I mentioned seeing the rise and fall of similar hyperlocal sites. What I mean when I say similar sites is organizations with deep pockets that are able to fund things unimaginable to a typical hyperlocal site. As I was digging through some analytics data, I found an example that I’d like to share.

About two years ago, I was approached by NearSay.com. They told me they had solved the hyperlocal monetization issue amongst other things. For those not familiar, there’s no money in hyperlocal. Well that’s a lie. There’s money, just not enough to get very close to the 1%. But that’s not the point here. My point is that NearSay exploded onto the scene, pitched the idea of joining a referral network they were starting, and really made an investment. According to their traffic reports, it’s struggling*. (The asterisk means look at the bottom of the post for more info)

The image below is a chart of traffic to NearSay (publicly available information) compared to Bowery Boogie’s traffic (not publicly available because I’m a dick when it comes to releasing usage data.) NearSay is the red line and Bowery Boogie is the blue line. I’ve left off actual numbers because I don’t entirely agree with the reporting metrics of this 3rd party provider, but it’s direct measurement on the same platform so it works for comparison. Observe the marketing push. Huge launch, 6 months of solid growth, 3 months of gradual increase, followed by 10 months of huge decrease and now a stabilized but drastically reduced monthly audience.

Did I mention that NearSay covers 17 local neighborhoods compared to Bowery Boogie’s 1 neighborhood? That’s not much traffic per neighborhood, but it’s also not their business goal as I explain at the end of the post. Let’s get past the money issue and look at content that would retain a user base. Now that there’s a baseline of four stable months that we can see, NearSay is performing lower than a blog that covers 1/17th of the same neighborhoods. How does a site that originally had such a (relatively) huge audience end up where it is?

Original content vs. re-blogs has always been and always will be a balance act for sites. Do you write about news or do you write about news that other people are writing about? NearSay is primarily an aggregation site curated by editors. Not a damning statement. That’s how websites typically operate. NearSay’s editor who provides much of their Lower East Side coverage lives in Brooklyn and it is likely a 9-5 job for him. I don’t know him so I won’t swear to accuracy here and I’m admittedly not a journalist.

I commute to work too, but the people who are covering breaking news and stories are living in the immediate area and writing about it in real-time day and night. Other sites (and newspapers) come to Bowery Boogie to find their content since our writers usually have first e-ink on stories. Consistent updates with original content is one of the main reasons I think Bowery Boogie’s audience has been growing.

Bowery Boogie’s story

Here’s an example. Bowery Boogie published a story about a restaurant opening. The next day, NearSay published a story based on the Bowery Boogie post and the featured image was a photo from Bowery Boogie’s original post.

NearSay’s post based on the Bowery Boogie post

So what’s the point? Originally I was going to title this post “The Tortoise and Hare of Hyperlocal” because the chart shows a slower but consistent growth compared to a sudden jump followed by huge falloff. That’s not the story though. I think the story is more about how you can throw tons of money into SEM campaigns, Facebook and Twitter advertising, etc. and yet you’re not growing your audience. You’re growing temporary traffic and stats that look good. An audience is built when you offer them something unique. They become returning visitors and spread the word. I’m using Bowery Boogie as an example here because I already have the data, but I’m sure this can be proven by tons of other sites.

* It’s important to note that despite the low traffic to NearSay, the parent company might be onto that whole hyperlocal monetization thing. After initial branding confusion of both the editorial and advertising platforms being called NearSay, they split into 2 properties: Nearsay for the editorial content and LocalVox to handle advertising (on NearSay and other sites.) LocalVox has an executive board of people who have run successful businesses forĀ  longer than I’ve been out of high school and have grossed more money than I can fathom at the moment. Based on their starter $200/month subscription package for businesses and their claim of 700+, LocalVox is possibly making upwards of $140,000 a month. Huge credit to them for that.

Going back to that interview about The Local East Village, I was trying to point out that success with hyperlocal news coverage is tricky and large companies have difficulties making it profitable. A partnership between NYU and The New York Times means a salaried editorial team, technical support staff, and possibly much more. The overhead alone is so high that no matter how amazing the stories are that are written, it will be basically impossible for the revenue to cover operating expenses. Was it a shock that the Times ended the partnership? Not at all if analyzed on a business model basis.

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