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Three years after going live, The Batavian, according to Owens, is profitable. It offers a promising example of local online journalism. The site has grown from fewer than 2,000 unique visitors per day in 2008 to roughly 6,000 now, generating close to 600,000 page views each month. Owens won’t say what it costs to run, but The Batavian operates with a skeleton staff: Owens, his wife, and two part-time employees, in addition to freelancers who are paid a small sum per story. The site posts about five short reported stories per day, and additional bulletins or photo pieces.
Most impressively, The Batavian has about 100 advertisers at any time—up from just three in 2008—and pulled in between $100,000 and $150,000 in ad revenue in 2010, Owens says. He aims to double ad income in 2011 and to hire one or two full-time employees. “I don’t really have to sell anymore—they call me,” he says of local advertisers. “It’s driven by word of mouth.”
One factor driving that word of mouth is The Batavian’s modest advertising rates. The site eschews pricing by traffic completely; instead it charges a flat fee of $40 to $260 per month (though one premium package runs as high as $400).
Owens estimates that a month’s run on his site would buy just one day’s placement in his print competitor, the Daily News. “I wanted it to be an easy decision,” he says. “What’s another $200?”
Online, of course, the supply of space available to sell to advertisers increases with traffic, because “impressions” are the unit of measurement. A small site like The Batavian would be hard-pressed to support 100 advertisers with the top-of-page banner model used by many large metro dailies. With one major banner per page, each sponsor would get just 6,000 impressions per month, or $30 worth at a fairly generous $5 cost-per-thousand. (In 2010 comScore found that average newspaper CPMs were $7 nationwide, though its analysis included the largest newspapers and newspaper chains in the country; small local outlets tend to have lower rates.) At that rate, the site would earn $36,000 a year. If there were two big banners on each page, annual revenue would rise to $72,000.
Instead, Owens runs the site like a “pennysaver”—every advertiser appears on each page, in long columns running down both sides of the site. Their positions rotate during the day to make sure every merchant spends some time near the top. And to encourage scrolling, every article appears in full on the site’s front page, with the most recent items at the top. It is possible to absorb all of the day’s news without ever clicking beyond the home page. Owens doesn’t have to worry about driving traffic to various corners of the site to deliver impressions to different advertisers. He designed this approach based on his experience at three newspaper companies, with access to online data for more than 100 local papers. “I saw that it’s very hard to get people to move past the home page,” he explains. “So I decided to base my business on that.”
A national brand probably would not place its ad alongside 100 others. But Batavia’s merchants have the sense that they are sponsoring a popular local resource at a reasonable price. Local boosterism makes a difference, Owens insists: “Some advertisers just want to support community.” His advertisers rarely ask about click-through rates, though Owens says some are pleased to learn that, say, a total of eighty people clicked on their ad over the course of a month.
A useful metric for evaluating this approach is not CPM, but RPM—revenue per 1,000 impressions. Assuming The Batavian earned $125,000 in 2010 (the middle of the range Owens claims) and averaged 600,000 page views per month, it achieved an RPM of $17, an impressive figure for a news site serving a small and far-from-affluent community.