Should the Newspaper industry be concerned with Patch? Or should this hyper-local initiative from AOL be dismissed as another web-fad destined for the digital scrap heap? Ya know, kinda like Monster.com, Craigslist, Gawker and Groupon?
It’s easy to understand why many legacy publishers still scoff at Patch’s effort to be a local, online newspaper. Cookie cutter sites, questionable traffic, editorial missteps and lack of early advertiser support provide some level of comfort for those that may feel threatened. But we think it’s a beautifully executed smoke screen; a diversionary tactic to keep local publishers at bay for just a little bit longer, while Patch quietly builds local business relationships.
Legacy Media Overlook Real Threat. The semi-obvious motivation behind AOL’s $50 million investment is to grab local advertiser budgets. No kidding. Groupon, Reach Local and Google are well aware of this head spinner of an opportunity. mum-and-pop dollars are the life blood of local news organisations. Patch is quite confident it can snatch an unfair share of them. Oh, and don’t be fooled into thinking they don’t have the chops to pull that one off.
The Patch Business Model. It’s not just about selling banner ads next to reports from last night’s school board meeting. Let the old school bloggers handle that chore. Their real objective is to steadily build relationships with local advertisers. Once that local bond is there, then Patch will offer them a wider portfolio of digital marketing solutions, similar to what Reach Local, Tribune’s 435Digital and AT+T are doing in many markets right now.
As Promised, Patch in 500 Towns. They’re also on a hiring rampage. To date, 800 editorial & sales positions have been filled with reported salaries ranging from $40K to $100K. This is in stark contrast to the 13,500 pink slips handed out by the Newspaper industry in the last few years. In addition, Patch has smartly “poached” seasoned execs from TV, newspaper, and even the Newspaper Association of America. Ouch.
Two Masters: Reader & Advertiser. Which one does Patch put first? Distasteful as it may sound to some, sales and revenue need a front seat in every online effort, just like they do with legacy papers. Without sound financial footing, community news and civic engagement are non-existent and newsrooms eventually get gutted. Online journalism is a means to an end for Patch. That end is local revenue share and profit margin. Sounds like good, clean, capitalism to me. And if Patch can get quickly their hooks into enough small businesses, don’t be surprised to see a substantial upgrade in their editorial and staffing in the very near future.
Here’s the webinar I recently did for a large group of Newspaper executives:
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