Local web native news sites continue to rely heavily reliant on traditional advertising but some are making progress in growing revenue and diversifying their revenue base, according to a new survey of more then 100 sites.
The 2016 survey, which I produced in collaboration with the Tow-Knight Center for Entrepreneurial Journalism at CUNY, sheds light on both incremental progress and significant challenges this fledgling sector of the news industry faces.
While nearly half say they are profitable, most are highly dependent on a single source of revenue – traditional display advertising.
As these small news organizations experiment with new revenue streams and attempt to establish a stable business model, the survey data raises key questions and opportunities for additional research.
- Narrow or wide? Are sites that focus on a single niche topic or a small number of topics within a community or region more readily able than general local news sites to develop revenue streams other than traditional display advertising such as sponsored content, events, sponsorships or merchandize sales?
- Mobile distribution: What will be the impact – financial and otherwise – of new mobile-oriented distribution channels such as Facebook’s Instant Articles that do not direct users to the local website to view content (and display advertising)?
- Mobile advertising: What are emerging best practices for mobile advertising and what role does native advertising play in monetizing on mobile platforms?
- Sweet spot: What market, business and other characteristics and practices are present for small local sites that have achieved annual revenues that top $250,000? Are certain factors or practices consistently present when small local operators succeed?
More than 90 publishers representing 103 local community or niche online news sites responded to the survey in March and April. A summary of the survey data is available here.
About three-fourths of them reported revenue increases over 2015 and nearly half said they turned a profit last year. Half said they were selling native advertising in 2015, a big jump from the 20 percent selling this type of advertising a year earlier.
As these sites grow revenue and become profitable, more research about their practices, the skills they need and the environments in which they operate can significantly help newcomers to the news ecosystem get a head start as they define their audience, their scope, and, of course, their potential revenue model.