Tom Grubisich wrote a great piece on the failure of local news sites to capture the boom in revenue happening in local online. He made a great point on the news market not capturing this local revenue.
“The issue that no one seems know the answer to is how to channel even a small fraction of the billions of dollars that flow to local non-news digital into news.
I have spent a lot of time trying to understand why ads worked in newspapers before. I mean, of course, people read the paper to get the news not to find out about wedding dresses at Macy’s. But the surprising thing is that a lot of people get the newspaper not to read the news but to find information about just that same wedding dress in a marketplace the newspapers have created that gets delivered with the paper. In other words, over the last 50 years, newspapers created a market place for local shopping that they owned.
- You are never going to make an effective local ad by sticking ads in online news stories
- You have to create new market local market places online
- No matter how much local news a digital news business like Patch creates, it will never be successful financially without taking that audience and creating a set of commercial marketplaces.