News Innovators on the Frontline: The Alternative Press

The publisher of The Alternative Press, Michael Shapiro, left his position as a litigator at a law firm in New York City to launch the site in October 2008. A longtime blogger, he started The Alternative Press (the online-only alternative to printed papers in the area) in just his hometown of New Providence, NJ. But the coverage area expanded quickly and now includes 10 surrounding communities. He says life has improved since trading in his legal eagle wings for community news, even though he’s still pulling 20-hour days.

The Alternative Press, founded by Michael ShapiroNotably, Shapiro’s territory includes Millburn and Westfield, where he rubs shoulders with some big-time media players–Patch (recently bought by AOL) and The New York Times’ The Local (in Millburn)–experimenting in hyperlocal.

How has the launch of Patch and The New York Times’ The Local blog affected your business?
It’s interesting; I’ve been pleasantly surprised so far with how it’s affected our business. Before they got there, I wondered how it was going to impact us. I thought the lure of a big company, with lots of money, would cause a problem. But, we’ve not only held our own, we’ve attracted a lot of their users and one of their reporters came over to us.

The only place its hurt us is in the area of publicity. Believe it or not, despite what we’re doing and the success we’ve had, not a single media outlet has covered us at all. They’ve done all of these stories about Patch, The New York Times, and BaristaNet and here we are, I created the site from scratch, we’re bringing in money, we’re bringing in more in revenues than any of those sites with the possible exception of BaristaNet, which has been around for years, and nobody has covered it. [Editor's Note: The NYT launched a self-service advertising vehicle for The Local on Wednesday.]

It’s kind of frustrating because it’s like, “this is newsworthy!” Here’s a local guy, with all local people competing with them in the same market and we’re never mentioned. If it was something were we weren’t getting traffic or we had no advertisers, I well could understand it. But at this point, we have more advertising than both of them combined. That’s incredible to me.

Have you done marketing to get the word out?
We’ve done PRNewswire and other things to get publicity but nobody picks it up. Otherwise we have grassroots pr. We’re at the Summit street fair and we’re doing email marketing. But, that kind of limits us at this point. Our traffic keeps going up, but if we could get mentioned in a major publication, even in the stories they’re doing about Patch or the Times, our users would go through the roof.

Talk about how you’ve been able to ramp up so quickly. Your staff has grown right along with your coverage area, how have you been able to manage it?
We now have over 100 paid freelance reporters, over 20 columnists and a 3-member sales team, all built up since October.

On the sales and business side, one avenue has been bringing on people like realtors or people with sales experience who are looking for part-time gigs. Like moms whose kids are gone in the morning until three, so they have that chunk of the day and then they’re back to being moms.

The Alternative Press coverage area.Basically, we’re always looking for sales people. We are struggling to handle the volume, we cannot handle the number of calls coming into us. Just in our 10 towns alone, there are approximately 20,000 businesses, so we need more bodies reaching out to the businesses that are not calling us.

What do you see as the potential for growth on your sites?
We have almost unlimited space for advertising, even if we hit the space we can start rotating ads. If we do a back of the envelope, it’s literally millions in revenue. We say to people you can advertise on our site for as little as $99 up to google.

We have a free business directory. For $99 you get an annual premium directory listing, which includes a logo or photo, a link to their website and it comes up first in the directory.
The same goes for real estate listing, which runs $15 to post your house for 3 months, as well as the community calendar. Inventory for those is basically unlimited, but our sales people aren’t even selling them right now.

As far as growing the number of towns, we could be in 100 towns tomorrow, but my feeling is you do it right. Before we launch, we go to do outreach to leaders, build a local advisory board, and put some reporters on the ground.

We’re probably going to continue a gradual expansion to more town in our area. I don’t know if we’ll grow at the pace we went in the first year because 10 towns is a lot to cover.

E-commerce and news, lessons from the UK’s Telegraph

Revenue, revenue, revenue. For good reason in this economy, all of the sites we’ve talked to so far have wanted to hear ideas for making more of it.

So we’ve been a bit surprised at how few are experimenting with e-commerce, which is frequently held up as a strong potential revenue stream for online news. Sure, we’ve heard from a few sites making good money from t-shirt sales and affiliate programs.

But American publishers should heed the experience of the Telegraph in the UK, which started launching a series of e-commerce efforts in 2008. The 154-year-old newspaper now says that a hefty percentage of its revenues come from online users buying those goods and services directly through the site. That’s a nice figure going onto the P&L as advertising revenues continue to shrivel.

“One shouldn’t expect advertising on its own to support the costs of a newsroom,” says Edward Roussel, the Telegraph’s digital editor. “E-commerce is less cyclical, less prone to downturn and more reliable as a revenue stream.”

The Telegraph has been quite successful getting readers to pay for access to games or to services that highlight the organization’s databases. The site’s fantasy football and cricket service and CluedUp, a brand aimed at puzzle nuts, have been perhaps most successful. The Telegraph also gets a commission on transactions made with their personal finance and sports betting partners.

TelegraphShop - e-commerce and the newsOf course, the Telegraph sells merchandise, too, ranging from tulips or a pond vacuum in the garden store, to Panama hats sold in the travel section. Roussel says developing a system that seamlessly matches product to editorial content is still a challenge, but he envisions a day when the e-commerce gardening application will recognize the rose in an article and serve up offers for that rose or something close to it.

Roussel says not all merchandise lines work as well as others, saying the fashion shop, for one, hasn’t broken through as hoped.

“That’s not how people view a site like ours, they don’t view us as a destination to shop,” he says. “That means we have to work harder to come up with the partners that will work.”

Roussel says that publishers need to embrace the ways in which the web has drastically “shortened the transaction chain” between advertiser and consumer. Whereas advertising used to be about delivering information to readers so they could then go out to make a purchase, Roussel says, “now we can say: do it here and now. That’s the value added for news sites–allowing people to make the acquisition on the spot.”

Far better, he thinks, for news sites to embrace this updated approach–providing valuable services for a fee–than to erect paywalls around content that in the age of Google is readily available elsewhere (an opinion echoed here today).

“The fundamental value of journalism is that you pull in a wide audience, then you can direct them to a series of high value services that they’ll pay for,” Roussel says.

Digital Marketer Sapient To Buy Nitro Group

Acquisitions of ad networks have ground to a halt in the past year. But Sapient still wants to do some shopping. The digital-marketing firm said it intends to buy Nitro Group. Terms of the acquisition weren’t disclosed, but the WSJ cites a source close to the companies as valuing the deal at $50 million. The combo will extend Sapient’s presence across four continents, by connecting with the offices belonging to New York-based Nitro, which was founded in Shanghai. Although it runs an ad net, Nitro is considered a full-service agency. The deal is a twist on the usual arrangement, where a traditional ad firm buys a digital one. The recession will likely force a combination of all kinds of ad agencies, as the business continues to struggle amid a severe pullback in client spending across the board. Release