In hopes of finding a way to replace its declining dial-up business, AOL is investing ~$150 million into a network of local news sites called Patch.
(AOL is also investing in the Huffington Post, which it acquired during the spring.)
We’ve been speaking with current and former Patch employees about whether or not the experiment is working. We also heard from a Patch advertiser.
The latest source we’ve spoken to is still a salesperson at Patch. This person is not happy, and is looking to quit as soon as possible.
The salesperson says one reason is that “corporate does not care one bit about their clients whatsoever.”
The salesperson told us a story about a local merchant who ended up paying a $1,000 CPM for three month campaign:
I had an client who bought exclusivity on the home page (300×250). The cost was $1,000 per month.
The clients campaign got bumped down to [a lower] 300×250 [ad slot] without a rate adjustment once they started filling the top 300×250 with Ad.Com ads.
When I addressed this huge issue with my Regional Publisher, they said, “do not address this with the client, wait for them to bring it up. We need to reach profitability!”
Over three months the client received 2,878 impressions at a total cost of $3,000. The client has since cancelled their campaign with Patch… Which is becoming extremely common across the country.
Pretty clearly, the problem here is that Patch charges local advertisers flat fees to sponsor sites that just don’t get very much traffic. Subsequently, the local merchants end up paying very high rates for not much return.
Here’s Patch’s rate card:
Other views on Patch:
- Confessions Of Patch Salesperson: “It’s Been A Disaster”
- Confessions Of A Patch Editor: “The Model Isn’t Sustainable”
- Confessions Of A Patch Advertiser: It Hasn’t Helped Business Yet, But I’m Hopeful