In recent months, the Seattle start-up Neighborlogs has stumbled across the perfect match: neighborhood news sites and online web deals.
Ad dollars from popular coupon sites like Groupon, Tippr, and Living Social are now fueling the local news sites Neighborlogs supports. Companies like Groupon can pay a package rate for their discounts to appear on all 22 neighborhood and city news sites on Neighborlogs’ Seattle Indie Advertising Network. The network’s members include sites like Central District News, My Green Lake, Wallyhood.org, Seattle Crime, Publicola, and Seattle Transit Blog.
“The Groupons of the world are all trying to buy web traffic cheaply,” said Justin Carder, vice president of business development for Neighborlogs. “Neighborhood news sites make sense for them.”
The influx of ad revenue from coupon sites marks a shift for Neighborlogs, which previously found its advertising from more traditional venues. Service providers such as dentists, lawyers, and real estate agents used to be the main advertising clients. While Neighborlogs still sees some of that traffic, online deal sites now provide the bulk of business.
Since Groupon, Tippr and the like represent a new concept in online commerce, Carder isn’t sure how the ad relationship will play out in the long run. For the moment, however, he believes the experiment is working.
Neighborlogs launched two years ago as a platform for local news sites. Just as WordPress provides a free service for bloggers, Neighborlogs gives someone starting a new site the tools to build it. Then, when an advertiser pays for a spot on a site with the Neighborlogs platform, Neighborlogs receives a 20 percent cut of the sale. Sites all around the country use the Neighborlogs platform.
The Seattle Indie Advertising Network came later. Six months ago, Carder and Neighborlogs president and CEO Scott Durham decided to try packaging Seattle news sites together to sell ads. They brought on two of their own advertising staff to market the content.
Local news sites that join the network receive a portion of the package sales but can still independently sell ads for their own sites as well.
So far, the Seattle Indie Advertising Network is generating enough revenue to support the small Neighborlogs ad staff.
“It’s a concept advertisers really like because they don’t know how to reach all of these news sites individually,” Carder said.
Both Carder and Durham have technology and neighborhood news backgrounds. Carder ran the site CapitolHillSeattle.com and Durham started Central District News.
Neighborlogs has new projects in the pipeline. Carder wants to develop a more advanced self service advertising tool someone could use on their web site and launch iPhone and Android Neighborlogs apps. The company is profitable and hasn’t raised any outside funding, but Carder said they may look for investments if they decide to accelerate the launch of new products.
The advertising partnership between Neighborlogs and sites like Groupon may indicate a future path for online news sites. Media organizations around the country are looking for new business models to provide enough revenue to support quality journalism. Here’s one that might actually work.