Gelf Magazine - Looking over the overlooked

Media

July 25, 2010

A Hyperlocal Pioneer's Next Frontier

Mark Potts last hyperlocal effort stalled after losing three million dollars. Here's why he thinks his next one is poised to succeed.

Michael Gluckstadt

For many people, "hyperlocal" is a term that only exists in the abstract. Whether they think it's saving journalism or destroying it, they discuss the concept without ever getting into its trenches, or as the case may be, suburbs. This is not true of Mark Potts. Potts spent 15 years with the Washington Post, Chicago Tribune and other esteemed news organizations as a print journalist before moving on to their incipient digital efforts. Then in 2005, he cofounded Backfence.

Potts introduced Backfence as "a local, grassroots approach to helping community members share the news and information (and advertising) that they believe is most important to them." An early pioneer in the hyperlocal space, Backfence excited media speculators and venture capitalists alike, raising $3 million in seed funding and a whole lot of expectations. But for a variety of reasons, the site didn't take off and in 2007, Potts had to shut it down.

Mark Potts
"There's money to be made selling local advertising; local site operators just need to go out and do it."

Mark Potts

Undiscouraged, Potts learned from Backfence's issues and returned as the CEO of GrowthSpur. Rather than seed hyperlocal blogs, Growthspur's aim is to support existing independent ones. The key, he says, "is to work hard and keep costs to an absolute minimum."

In the following interview, which was conducted via email and edited for clarity, Potts tells Gelf what he learned from past mistakes, why he's optimistic about hyperlocal's prospects, and why some of the big players are going about things all wrong.

(Due to a miscommunication, an earlier version of this article included some off-the-record material, which has since been removed.)

Gelf Magazine: What is your outlook on hyperlocal?

Mark Potts: I'm very bullish on hyperlocal. I think there's a huge need for this sort of focused coverage of neighborhoods and communities, and I think there's an emerging business model—involving very low costs and advertising from local businesses—to support it.

Gelf Magazine: What factors for the growth of the field are different today than they were a few years ago?

Mark Potts: The biggest difference is the explosion of local sites and blogs over the past couple of years. Five years ago, when we started Backfence, we had to create local sites because they didn't really exist. Now, with ubiquitous, easy-to-use blog software, the decline in traditional media leaving big coverage gaps, and many displaced journalists covering their communities independently (to name just a few factors), there are thousands and thousands of hyperlocal sites around the country.

Gelf Magazine: There is something of a divide between larger companies that are seeding hyperlocal sites from the top down, and smaller independent sites that are cropping up on their own. Do you think one of these models is more likely to succeed?

Mark Potts: The explosion in independent sites renders the Patch model essentially obsolete. You don't need to hire people to cover communities—they're already being covered by bloggers, often in multiple instances. The key is to support and encourage the independents—whose motivation is not just financial—rather than spending money trying to do what they're already doing. This is a huge change in the last two or three years.

Gelf Magazine: Who are these independent bloggers? Are they mostly hobbyists or does blogging earn them a livable wage?

Mark Potts: The independents are mostly hobbyists, but there are some who are learning you can make a living at this if you work hard at selling advertising. There are local bloggers bringing in six figures a year. Not a lot, but the common denominator is basically ad sales. We think a lot of the hobbyists can be upgraded to making a living at this.

Gelf Magazine: As a self-described "recovering journalist," I'm sure you're familiar a with the much-repeated trope that only a pro can cover a community. Do you put any stock in it?

Mark Potts: There's great coverage done by amateurs who are passionate and know things about what's going on around town—we've seen hobbyists break all sorts of stories. Remember, this ain't Woodward and Bernstein stuff. A lot of it is really mundane—why is that streetlight still broken, who's going to move into that empty storefront—that's really important to local communities. And this isn't an either/or proposition. Pros can and should still cover what they can, but they can't be everywhere, and the bloggers fill the gaps.

Gelf Magazine: Blogging is something almost anyone can do, and lots of people want to do. Neither of those things can be said about ad sales. How can local bloggers be trained to be their own sales force?

Mark Potts: Can bloggers sell ads? Sure. They just need the training and motivation. The bloggers that are making money are mostly journalists who took the leap to sell. We want to make more of them.

Gelf Magazine: Other than straightforward display advertising and listings, what innovative revenue opportunities are there for hyperlocal blogs?

Mark Potts: We think there's a lot of potential in moving the Groupon Deal of the Day down to the neighborhood level—the result is much more relevant advertising for consumers and easily measured results for advertisers. We also see great potential, down the road, in local ads on mobile devices and using video.

Gelf Magazine: When Jeff Jarvis unveiled his hyperlocal news business model, it was greeted many. Have you seen his numbers? Do you believe them to be a feasible projection for a hyperlocal startup?

Mark Potts: I have no trouble at all with Jeff Jarvis' numbers (he's an advisor to us). They square with our projections and, more importantly, with our firsthand experiences with local sites and with research we've done into successful sites. There's money to be made selling local advertising; local site operators just need to go out and do it. Those that have done so have tended to do quite well.

Gelf Magazine: Why didn't Backfence succeed? Was it a failure of strategy or execution, or simply bad timing?

Mark Potts: Backfence was too early, and simply didn't execute as well as it could have.

Gelf Magazine: Where does GrowthSpur fit into the emerging hyperlocal ecosystem?

Mark Potts: GrowthSpur is all about providing the revenue and business underpinnings for all of these hyperlocal sites. We help them with advertising sales by providing training, tools and access to local sales networks that allow the bloggers to sell each others' ads. We believe this support of grassroots community journalism efforts is essential to their success.

Michael Gluckstadt

Michael Gluckstadt is an editor at Gelf and host of the Varsity Letters speaking series.







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Comments

- Media
- posted on Aug 20, 10
Tracy at WSB

Will you guys please quit calling independent community-news reporting "blogging"? Thank you. "Blog" is only a publishing format. Nothing in this conversation acknowledges the fact that many of us ARE JOURNALISTS, both journalists who previously worked in 'old media' and people who are journalists by virtue of the community journalism they are doing now.


Article by Michael Gluckstadt

Michael Gluckstadt is an editor at Gelf and host of the Varsity Letters speaking series.

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