Patch, AOL’s big local bet, continues to lose money and is scaling back freelance budgets. It is using “smoke and mirrors” to look profitable, losing sales people and forcing editors to drum up sales leads.
But its president Warren Webster told Street Fight the organisation is chugging along.
We are succeeding on a number of levels, and our users and advertising clients remind us of that every day. Building something as ambitious and important to communities as Patch is a long-term investment. We’ve said that since day one.
We continue to be amazed at how quickly the sites have been adopted in their communities, both by residents and businesses. Our business plan is right on track, and while we obviously can’t comment on timeline, we couldn’t be happier about the track we’re on.
Additionally, AOL is not in the market to offload any of the sites.
“There are no plans to sell off community sites, period,” Webster said. “The company is very committed to Patch as a strategic investment.”
AOL never said this was going to be a quick road to profitability. The Patch president notes that traffic is up 250% on the year and they are scheduled to have almost 1,000 patches by the end of 2011. That’s not insignificant progress.
There are, however, concerns about the sales side. A number of people have left, citing the difficulty of selling ads, and one of the commentors on the Street Fight story offers his opinion.
Basil C. Publisi, a digital marketer who says he worked with an AOL VP, writes:
Patch features one of the most unsuccessful advertising products in the local market place. As a former employee and a consultant that had several clients using Patch advertising in 4 markets in three states, I have the data that makes a compelling case that in my opinion, Patch advertising is a failure.
And another astute point from the comments section:
Patch’s biggest news problem now is the inconsistency from site to site, so it’s a crap’s shoot if your community Patch will be a real source of news or a fluffy joke on the Internet. It’s biggest financial problem is the lack of marketing Patch has committed to in these areas. Even after 18 months, many many people still have no clue what Patch is. And that’s a problem.
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