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[upbeat music] Welcome to the Rebooting show. I'm Brian Morrissey.

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Each week, I talk to a guest who is building a sustainable media business. I'm wrapping up a series featuring those who are building independent local publishing businesses.

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I like to say this is the hardest of the hard problems, and there are many hard problems in publishing. Uh, I wanna thank Outbrain for supporting this series.

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As part of it, we're hosting a lunch during, uh, CES, which is coming up this week. I'm gonna be leaving on a Spirit Air flight for Las Vegas, which I, I cannot wait.

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And, and at the event we're gonna discuss, you know, the advertiser role in supporting sustainable local business models.

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And, and this is gonna get tricky in a recession, assuming that we have one, and all signs certainly point to that.

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Because let's face it, there's a flight to performance and every- everyone has to fight for, for budgets.

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And so, uh, there's been a lot of talk among marketers and advertisers about how they need to really think about, like, where their dollars are going, and I, I think this is an important topic to, to address.

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And to do so, I'm gonna get the views of Crystal Olivieri. Uh, she is the, uh, Global Chief Innovation Officer at Group M.

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The event takes place, uh, this Thursday at 11:30 AM Las Vegas time, although who knows what time [laughs] in Las Vegas, if there is Las Vegas time.

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And if you wanna come, just shoot me a note at bmorrissey@therebooting.com and I'll make sure you get signed up, and it would be great to meet in person. Uh, the event, again, it's at 11:30 AM on Thursday, January 6th.

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It is at The Catch Restaurant, which is in the Aria. Thank you again, Outbrain, uh, for supporting us. You know, they've been great partners, and, uh, they've enabled the, these important conversations to take place.

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Also, one other final quick note. I have another podcast that I do called People Vs. Algorithms. Each week, Troy Young, and Alex Schleifer, and I, uh, discuss patterns in media, tech and culture.

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It's, it's a fun discussion show. It's a little bit different from the interview format of this podcast, and, and we keep trying new things.

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We'll keep evolving it as the year progresses, but please do check it out, I would love any feedback you also have on it. Just search for People Vs. Algorithms on Spotify or Apple.

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So this week on this podcast, uh, I'm going to be speaking with Scott Brodbeck, who is the founder of Local News Now, a network of publications focused on communities surrounding the Washington, DC area, like Arlington and Fairfax.

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These are places that have had high population growth in, in the last, uh, 10 plus years. I can remember when I lived in Washington, you know, they were totally different. The, the entire area was totally different.

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And they're also, let's, let's be clear, very high income areas, and that, that is an advantage in building these models.

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So Scott and I discuss the, the ad model that, uh, Local News Now has, and, you know, what's working, and also the limits of, of nonprofit models a- and much more. I hope you enjoy the conversation.

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Again, would love to hear your thoughts on the Rebooting show and things you'd like to hear going forward. My email is, is bmorrissey@therebooting.com.

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I finally switched to a custom URL, so some real progress on that front. Hope you enjoy the discussion. [upbeat music] All right, Scott, welcome, uh, to the podcast.

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This is the last podcast we're recording in 2022, so it'll be the first one of 2023. No pressure or anything, uh, Brian. [laughs] Just don't screw it up. Happy to be here.

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L- [laughs] Yeah, longtime listener, first time caller, so this is, this is great. Awesome. We're actually wrapping up this series on local, and I, I've really enjoyed it.

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I wanna thank Outbrain again for, for sponsoring this, 'cause, you know, they're important discussions to have, and the reality of the industry that, that I'm in is, like, you know, a lot of the, the sponsors wanna be attached to specific issues around, like, data and stuff like this.

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So it's great that they're underwriting this series, 'cause I love talking about this, 'cause this is the, this is the hardest of the hard problems to solve. So how in the world...

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First of all, like, before we get to Local News Now, like, h- why in the world would you get, go into local news? Uh, it, it is a bit of a questionable decision that I ask- [laughs]... myself sometimes.

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For whatever reason, I've always been attracted to, to local. So growing up, I'm actually here in my childhood home recording with you for the holidays.

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You know, I ha- I bought a scanner, like an old school scanner, that could get cell phone conversations, uh, back in the day. Is that legal? And I would, like, ri- It was. Can't do that anymore.

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[laughs] Uh, but I would, like, ride my bike to see what the fire trucks were doing. And, you know, that, it's that same ethos that has attracted to me, l- me to local news.

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And while I'm continuing to do this 12 years later, uh, you know, even though I figure that there are other things I could be doing, you know, I think local is a very important thing, and it's a very interesting challenge because n- nobody has the answer.

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Yeah. So walk me back, uh, uh, with how, how you got started 12 years ago. So I, a, a lot of people who are running independent local sites like mine come from a print background.

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I actually come from a, a broadpat- broadcast br- background rather. Yeah. I worked at, uh, stations in Washington, DC after graduation.

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And at some point, uh, while I was getting an MBA over at Georgetown, I, I kinda said to myself, looked at the direction of the industry and didn't love where local was going, and ended up leaving, and just on a total impulse, uh, starting my own site.

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It was, like, a one-day thing. Like, I came up with the idea in the shower. Everybody hated the name I came up with for the site, but I didn't like the things that, uh, you know, my friends came up with.

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And so I started it at almost 13 years ago, covering snowstorms in DC that, that winter, and, uh, somehow I'm still here. So wait, what was the name?

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There's three sites now, so but what, what was the name that everyone hated? So, so Arl Now is the flagship. Yeah. It, it covers Arlington, Virginia. Yeah. And then we have, uh, two others that we own and operate.

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So in Alexandria, Virginia, AOX Now, and in Fairfax County-FFXnow. And then we partner with a couple other DC area sites to help them sell their ads and, and, and run the sites themselves.

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Okay, but the first site was the Arlington site? The Arlington site, yeah. Why do people hate- So that's where- Why do people hate A- ARL now? It's like a- Uh, they, they thought... They didn't think people would get it.

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You know, ARL, what, what is that? People to this day, I, I pronounce it ARL. Other people- ARL... call it ARL. Uh, you know, that's a point of contention. Yeah.

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But, uh, we've stuck with it and, and the shortness of it has actually been an asset. Yeah. You know, you make names mean anything. At the end of the day, I don't think it matters in the long run, does it?

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The, the rebooting show, for instance? Ex- [laughs] Oh my God, now we're getting aggressive.

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It is a little long, I have to admit, and, and Jay is nodding along, the, our producer here, because I think he's been advocating for me to drop the show from it. And maybe, you know what?

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This is, this is beginning the new year, so who knows. By the time it comes out, maybe we'll just drop show off and pretend it never existed. We'll see. We can do that. It work. There's, there's no rules.

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So what was the opening that you saw? Because I lived in, in, in Washington for a s- a brief period of time, and it was, it was in the late '90s, I think it was.

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And, you know, the local news, I was getting the Washington Post delivered every day and stuff like this, and the Washington Post was always, like, between, like, is it a local paper? Is it a national paper?

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They still don't know. Yeah. I... Well, I think it's like, yes, they definitely don't know, 'cause there's a lot of interesting things going on there. I don't know if you have any insights.

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But what, what was the opening that you saw? 'Cause I mean, I think Washington as an area is, like, is actually really attractive, 'cause I think about if I go to...

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When I go to Washington now, it's not often, but it's very, very different than when I lived there in 1999. There's a lot more money. Like, there's a lot of money in the, in the Washington, DC area.

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So I think it is actually a pr- probably a pretty good area to start, like, local news sites. So the initial opening I saw was that Arlington... A- and when I launched the site it, I was in my 20s.

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A- and the only, you know, the, the real local news outlets that were focused on Arlington were meant for people, you know, middle-age and up, uh, living in single-family homes in the more affluent parts of Arlington.

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So, you know, I wanted to launch something that was gonna speak to people my age. You know, people who are, you know, more, more advanced in age as well. But, uh, there was nothing for us.

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Pe- my friends, who mostly lived in DC at the time, all thought Arlington was boring and nothing happened there. [laughs] And I was convinced that that was not the case.

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As it turns out, uh, I was right, and there's actually plenty to cover in Arlington. Now, if you wanna go way back, Arlington had its...

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Well, Northern Virginia, I guess, had its own daily newspaper, so there was a point where people did not think Arlington was boring. But nonetheless, you know, at that point in time- But it's also, it's, it's, it's a-...

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it was just, like, a couple weeklies in the Post. Yeah. But it's also, it's a bo- it's been a booming area, right? Like, I mean, like, the area the...

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I forget what they call it, but the area around Washington, DC has, has boomed, and, like, the population growth in, in, in Arlington, Alexandria, and, like, Fairfax has been tremendous, hasn't it? Yeah.

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A- a- and, you know, to your point, it's a populous, affluent area. And, you know, the model that I'm employing here, which is mostly an advertising-driven model, is working here.

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You know, I would say that that's probably part of the, part of the reason we're doing as well as we are. You know, if we were in a less populated, less affluent area,

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I still think we could make it work, but it's working to the degree it is in part because of the market. And, you know, as you look across the country at, at the various local news efforts out there,

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e- everyone is different, and that is reflective of a bit of the market, uh, dynamics in each place. So what do you think, what, what's the sort of...

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Explain the sort of secret sauce that, that you have, like, with these communities, and also, like, how you identify how local to get, right? Like, I mean, like, why not, like, just have one for, you know, all of the...

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I'm trying to remember the geography, but, like, you know. I- you, you could say, like, you know, Arlington, Alexandria. To me, like, when I was...

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I was living in, in Wa- in, in, in Washington, DC, and I was like, "Oh, okay, it's just Northern Virginia."

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[laughs] So when I s- when I started this, I, I did register domain names for individual parts of Arlington, thinking that that was a possibility, that maybe we needed to go more specific.

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Oh my God, you were gonna go that local. I was just gonna do all of Northern Virginia. Well, the problem you find there i- is that as you zoom out too much, people lose interest.

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If you're trying to make it too general... You know, you want something that's gonna be... You wanna cover news that's gonna be relevant to them, that they actively want to read.

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Because, you know, unlike, uh, the weekly newspapers out there, who get the benefit of just pushing out a print po- product to a whole bunch of addresses, if we wanna succeed, we need people coming to us.

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Now, to a degree, email newsletters are a way to push, but that only gets us so far. We still get, uh, most of our traffic through social and search and people just typing in the domain name.

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So w- we are, I, I should say, a, a, a for-profit site. We're not a nonprofit. There are a lot of great nonprofits out there. We've stuck with the non- the for-profit model.

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It's not very profitable, I, I will tell you, but it's profitable enough that, you know, our, my incentive is to appeal to as many people in Arlington as possible.

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So rather than focusing on a subset of types of news, I try to cover everything on the site, try to appeal to people who live in far Southern Arlington, far Northern Arlington, young and old.

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And that's, I think, part of the secret sauce, is being really audience-centric in terms of knowing what, what it is, what kind of information they want, what kind of information appeals to their daily lives.

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It's a hard thing to get right, and I, I think a lot of other attempts at, at launching local sites struggle with this, where you kind of ha- especially the people coming from a pin- print background.

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I, I think sometimes people wonder, "Okay, what is news?" rather than what is some- something that your readers wanna know. And it's a, it's a fine line, and, and there's a lot of intersection there.

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But-We've, in my opinion, done well in, in terms of knowing what our readers' interests are and serving them in a way that impacts their daily lives.

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[gentle music] So give me an example that's, that highlights that, that divide, 'cause I think it's an interesting nuance about, like, what is news and what, what people find essential, right?

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'Cause, like, at the end of the day, you wanna be essential to the audience, the, like, your, your local audience.

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And sometimes, like, you end up getting pulled in different directions, no matter what publication you have, away from your audience.

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And I think this has been, like, a sort of story of the previous era and, and now I feel like it's now much more common that publishers recognize that they have to be audience-focused to, to be essential.

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Yeah, I, I mean, you were talking about this with the guy from Manchester. Mm-hmm. Y- you can't just cover all local government, you know. That's all vegetables with no, uh, you know, no meat, no dessert.

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We cover anything that we think our readers are gonna be, you know, broadly interested in. So that extends to local business, restaurant openings, restaurant closings. We cover, uh, public safety, so crime and fire.

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You know, I loved f- chasing those firetrucks on my bike as a kid, and w- we're still doing that, uh, essentially with the site. And we do cover local government. We cov- we try to be kinda scoop-oriented.

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So, you know, one of my fellow Arlington-based news organizations is Politico.

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I kinda watched what they did and, and applied a little bit of that to the local model of, you know, being very, very both scoop-oriented and, and, and kind of playing towards storylines. So,

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you know, when there's a topic, right now it's, there's a housing debate in Arlington that we've just covered, you know, over and over again in multiple ways. I, I think we've really served our readers well with it.

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But, you know, that was another thing that I, I saw Politico doing, where they would kinda take this one topic and really run with it. Yeah.

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Yeah, I, I, I think that's, that's always the question, right, with, with a lot of these local, uh, sites, is, like, whether it does the kind of, like,

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the, the blocking and tackling stuff, like, the, the people claim that that is the missing piece. And I think, uh, in large part it's true, and it generally leads to, like, accountability and, and, and stuff like that.

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Because, like, here in, like, New York, uh, there's a little bit of a kerfuffle over... Have you seen this, like, congressman who apparently made up, like- Oh, yeah...

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he just got elected to Congress, he made up, like, his entire [chuckles]... like, apparently just, like, everything.

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[chuckles] And, um, yeah, there's, like, the, the normal Twitter wars, uh, going on over it, like, who to blame other than the guy who made up everything.

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But, you know, like, The New York Times finally got around to covering it after the guy was elected, and Newsday y- which used to be, like, a great local paper, right?

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I mean, like, seriously big local paper, you know, totally missed it. But, like, it, it's about balancing that with the, the lifestyle stuff that people have always relied on, on local papers for, I feel like. Yeah.

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I, I, I think it's a bit of a, a, you know, return to some, some old school principles around, you know, some of the old school newspapering when you didn't have the, uh, regional monopolies that kinda, uh, I, I, I think made newspapers a little lazy, uh, let's say, on, uh, on terms of some of their decisions.

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They didn't have to work as hard- Mm... uh, appealing to an audience as they did before when the, you know, it was a multiple newspaper town. And yeah, I, I... The internet kinda does that for us.

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So, you know, as I mentioned, i- if, if we're putting out something that people are not interested in, they're not gonna read it.

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So we not only have to cover things, but we need to do so in a way that's not super dry, that's, you know, engaging.

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So if, if we're covering local government, and we cover lots of local government, uh, w- we're trying to make it a little more active.

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We're not, you know, this is not a, an attempt to be the Mic of local news or y- you know, one [chuckles] of those efforts that- Oh, no, you don't wanna do that, Scott. No, you don't.

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I don't wanna tell you what to do, but you don't wanna do that.

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So yeah, on the editorial side we're, we're really, uh, you know, focused on if we're gonna cover something that's a dry topic, we're gonna find a way to make it more engaging.

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And, uh, you know, one way that I think brings pe- one thing that brings people in, in my opinion, is our comments section.

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We ha- ARL now especially has a very active comments section that we try to moderate to the degree possible. But I, I've seen that, that, that's a bit of a differentiation. Not everybody- Yeah...

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has opted to keep the comments. We have, and there's a community around it, and I, I, I hear over and over again. Now, some people hate the comments. Yeah. And rightly so.

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The comments can be a bit of a, a, of a cesspool. But, and- I'm a little torn.

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I saw, I saw your, I s- I saw before you sent me, like, your thread on, on the comments section, 'cause it actually piqued my interest because I, I was one of the people who gave up on, on comments kinda early.

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'Cause I, and I think it was related to being, to being a reporter, where, like, I always, I always treated the comments, like, uh, with a little bit of trepidation 'cause I u- I knew there was usually nothing good down there, you know?

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I was like, I'm, like, a big runner, and it was like, s- to me it was like the port-a-potty. It's like, "Don't, don't look down. There's, there's no, there's nothing for you there. [chuckles] Do not look down."

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I mean, to, to a degree you're right. I go into the comments section, I don't necessarily agree with, uh, much more than, uh, you know, 10, 20% of what's being said in there.

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But, but the fact of the matter is, it, you do get diff- uh, especially on a local level, you know, as you, as you contract the community, I do think that it becomes more civil. Yeah. It becomes more interesting.

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It's not just a total food fight. You know, it is, but it's not a total food fight.

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And there are legitimate issues that are raised in the comments-That further stories, sometimes we get ideas of, you know, approaches to stories, uh, follow-ups from the comments.

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They will point out any tiny typo we make. So, uh- [laughs]... you know, by 30 to 60 minutes after something's published, it, it's buttoned up tight. Oh my God.

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But- That's one way to drive engagement, just screw up, like, it's with an apostrophe, without- Oh, yeah... an apostrophe. You'll get, like...

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But it, you know, it's really the, uh, in my mind, the, the best part of it, besides, you know, the engagement, people actually commenting, is the, the fact that it gets people to read.

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It gets people to read things that they might not otherwise be reading because they, they wanna see what people- Yeah... in the community have to say about it, even if it's something they disagree with.

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And so I think some of the news outlets that ha- dropped their comment section a few years ago, they, they really missed out. They really... I, I, I think they, they're, they're...

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I get where they were coming from, but they had their own little social network on their site. A- and they totally, you know, sent those readers to places that were even worse.

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You know, as long as there was just, like, the tiniest amount of moderation there, uh, I guarantee you that the comment section on a local news site can be better than the comment section or the, uh, you know, what I see attached to our articles on Facebook.

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Well, that's the thing. I mean, that's, it, it... I mean, that's why I, I found it interesting 'cause, like, it's true.

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Like, in some ways, publishers outsource the engagement part to Facebook, which is kinda crazy, because why wouldn't you want that to happen within, you know, your own environment?

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But it requires, like you pointed out, it requires putting a resource against. I know that I gave up on comments in my last job once.

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Like, I was like, "Oh my God," like, it's like impo- like, this game of Whac-A-Mole would be like... It was just... I prob- this was probably not a strategic decision.

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[laughs] It was probably, like, me, like, I, getting tired of getting, like, some, like, you know, random, like, Slack message like, "Oh, there's spam in the comment section."

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And then it's like, okay, somebody's gotta take care of this, or why is there this? And I was like, "Oh, no." It's a major headache at times. The comment solution we use, we use Disqus.

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It, it's gotten better over time because you can now restrict it to only people who have commented before. I, I actually find that that- Yeah...

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raises the level of the discussion, so it, it makes it e- uh, the practical effect is, is it makes it easier to ban trolls, and they can't just, like, create a new account and start commenting. Yeah.

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A strange thing for me, just for some reason I always thought Disqus was discus, which makes no sense, like, at all because it's, like, obviously about discussion. I actually have no idea. I could be wrong.

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[laughs] It's gotta be discuss, though. I, I realized it later. It was just, like, I guess I didn't run in a lot of circles where people talked about it that, as much. So, [laughs] like, I was, like, calling it discus.

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I find-- I have this problem with a lot of words in The New Yorker that are unfamiliar. I just mispronounce them. So talk to me about the business model 'cause, I mean- So-...

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you started this at a time before, like, subscriptions were, you know, frankly even, like, considered for, for most news.

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So, so Brian, I know you're a fan of, uh, publishers giving you their revenue numbers, uh, and they never do. Oh, yeah. Uh, I'm gonna give you- No, do it. Let's go. I, I, I will, uh, open the kimono a bit here.

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[laughs] So we are an ad-driven model. We are primarily advertising-driven. Uh, I'll give you a percentage breakdown, uh, of our revenue to- Wait, that's not, that's not the numbers. You were promising me the numbers.

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[laughs] I, I didn't mean percentage numbers. They're relative numbers. It's better than nothing, right? Uh, so about tw- 25% of our revenue at this point is programmatic.

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Uh, we do, you know, get a decent chunk from programmatic, believe it or not. About 5% is what I would categorize as other, so that includes memberships, which i- which is just on the Arlington side at this point.

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Merch sales, we sell some shirts and stuff. And then, uh, there was one other in there, uh, that, that's not coming to mind.

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The rest, about 70%, is direct sold ads, and much of that comes from inbound interest of people wanting to advertise with us.

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And so we've really optimized our business around finding solutions for local advertisers that, like, actually work in providing them a good customer service experience, uh, which apparently is something that has not, uh, necessarily been the case with some of the, some of my print competitors.

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We, we really focus on trying to make it a streamlined experience- You mean just, just being-... for advertisers and actually providing ROI. You mean just being, like, easy, easy to work with and, and that stuff?

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Or, you know- We-... just deli- i- and delivering on the business, like, objectives. So, you know, we, by virtue of being a independent, uh, publisher and not having any, like...

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I had no idea how this business worked, to be honest with you, when I started it.

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[laughs] Uh, I, I didn't even know what insertion orders were, so, like, we never started out with some of that, like, those legacy processes.

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And I kinda just saw what was going on and thought that our advertisers probably just wanna place ads as quickly as possible and not have to deal with a whole bunch of, signing a whole bunch of stuff.

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So, you know, we really have tried to streamline it and make it so that even though we're a smaller buy for a lot of our advertisers, they're not spending a ton, ton of time doing so.

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[gentle music] Yeah.

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I think one of my big takeaways in my adventures in sales was, like, and they're probably truisms, but it's be easy to work with. [laughs] Yeah.

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And, like, we, like, make it really easy for people to, like, you know, give you money, and, and be responsive. Like, I think those two things, like, go a long way in sales.

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Not totally there on both, but I'm trying to get there.Yeah, no. We've-- We-- That's definitely something we've done, and we've tried to, to the extent we can, innovate around some of the offerings.

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So we were early to sponsored content, which now is well above fifty percent of our business compared to display advertising.

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We're, we're continuing to try to find, you know, things that we can do with the sponsored content. We've a-added some interactivity with, uh, you know, sponsored polls and sponsored forums.

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Playing around with it, it, it's-- The problem is, uh, e-especially on-- at this local l- of a level, you know, it's taken years and years and years just to get people out of a print-p-print mindset.

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So when I started the site, I was still dealing with advertisers who were wary of us because we were on the internet and not a newspaper.

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And we're finally getting to the point where, uh, our advertisers are almost universally somewhat savvy [chuckles] about the internet. I, I know that's a weird thing to say in twenty twenty-two. Yeah.

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But, but doing some of the more advanced stuff, some of the, some of the interactivity is new to some of the local advertisers we work with, so we're trying to work that into the mix.

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And, you know, in addition to that, uh, a, a major focus recently has been automation and efficiency.

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So I had dreams, you know, starting out these sites, that we would grow, and we would have a newsroom the size of what has come before us. You know, ten-person newsroom covering things in Arlington.

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Uh, that has, has not been the case. Right now, our company size is about ten people total- Mm-hmm... full-time, uh, plus some freelance.

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And we have about two plus employees per site, and that includes, uh, editorial staff, and then we have a staff photographer. I do not see the path to growing that much more beyond what we're doing.

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You know, we have outbound sales efforts trying to drum up that business, but I, I... Right now, as, as it stands, there seems to be a cap.

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So the question is, how do we maximize what we're doing with the existing business we have? And what we've been focusing on is ways to increase efficiency.

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So we, we have found ways to be more efficient on the business side. So rather than hand-creating each report to a- to advertisers, we use the tool to automatically create that each month.

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Uh, we have a bunch of automation through Zapier to, you know, streamline some of the, the creative process. And as AI has come along, not to touch a third rail topic, you know, the GPT-3- Oh, yeah. Let's go.

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[chuckles] I-I've been looking for ways to potentially incorporate that into some of our business and editorial processes. Uh, I will tell you that we're not doing a whole heck of a lot.

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It's more along the lines of, like, suggesting tweets, uh- Yeah... on Slack, uh, and coming up with, uh, potential headlines.

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But I, I do think, you know, as this technology advances, there might be opportunities down the road where it can do things like, uh... We also have it sum-summarizing some articles for, for our members.

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But I, I do think that there might be more opportunities down the road as that technology advances. It's... Right, right now, it makes up too much stuff to have it write anything of consequence. But- Yeah...

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uh, you know, if we can have our reporters focusing on higher impact reporting, you know, the local government, coming up with scoops, and find kind of the, uh, less important things but still interesting to readers type,

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uh, content for, for the A-AI to help with, I'm open to it. Yeah, and- Even though my reporters are a little afraid of it.

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Well, I think it's natural, like, to be afraid of, of the technologies a-and they come-- when they first come out a-and go into dystopian. I mean, this is just how we think. I've, I've, like, said this before.

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We just-- We inevitably go, "We love technology 'cause we're a technological species. We would not be here without technology." [chuckles] But at the same time, we always have this fear of technology replacing us.

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It's been for forever, right? And, like, in reality, so far, our track record is pretty good. Like, we haven't yet been replaced by technology.

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You know, technology comes and displaces, like, jobs and stuff like this, but I think the, the upside is exactly what you're talking about, is the reality of, of, of running businesses and having them even be able to, to exist is, is due to productivity gains and, and efficiency gains.

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And this has, at least on the surface, has a ton of potential to help exactly the kinds of businesses that we need on the local level, I think. So let-- I, I'll come up with an, uh, uh...

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I'll give you another example of how we're using automation, not necessarily AI. Mm-hmm.

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But we do a morning post on each of our sites with links to other outlets, uh, and some interesting things they've covered, also the weather. Uh, we started automating that, so, uh, to, to various degrees.

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So the weather is automatically created. The links to other sites, we just, uh, aggregate that with RSS and then use the automation to put that in each morning rather than, you know, hand copy and pasting it.

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Events that are coming up that day in our event calendar. So that, that all gets automatically generated overnight.

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Uh, we don't have to spend a minute doing it, and then we can just put in, you know, some of the more, you know, handcrafted editorial content on top of that.

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You know, opportunities to do stuff like that I, I think is gonna be important because, again, when you're in a resource-constrained environment, and certainly at the community news level you are, you need to, to maximize what you're doing with the talented people you employ, and having them copy and paste events is not that.

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Yeah.

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I mean, these are the sort of-- Like, I mean, I think back, like, you know, my 20-odd years, like, working, like, how many automation tools have made, like, kinda bullshit tasks that were part of [chuckles] my job, like, before obsolete.

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And, like, that's amazing. It's great. It didn't make, you know, what I, you know, the roles that I had obsolete. It made a lot of copying and pasting, like, unnecessary, and I don't see that as necessarily a bad thing.

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And I think, like, all of these-I'm glad you brought up the efficiency discussion because it-- the way you solve these problems is not just, like, as you said, like, there's a cap.

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The reality is, like, there's a cap to a lot of the sizes of the market opportunity. Like, and the only way you, you can... The thing that you can control is your cost base. Like, you can definitely control that.

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And so getting more efficient, it to me just seems like the necessary thing, even though a lot of people don't like to talk about it. I don't know.

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You know, I don't think it's a mistake that the, that the, the outlets you see kinda making a national play on the local level, the Axios Local, Six AM City- Mm-hmm...

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even if we were to go back to Patch, they're all based on a, a very efficient, a low headcount model.

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And look, do, do I think that that's necessarily what the future's gonna be, is m- mostly aggregated content and easy, you know, copy and pastes of, of press releases in some cases? No, I, I hope not.

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I, I hope that the future of local news is people going out and doing original work. And of course, local news exists in, in, in multitudes.

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You have the nonprofits doing, you know, certain types of things, and you have, you know, sites like ours doing other things. But i- in general, I think i- if you want to see more local news across the country,

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you're gonna have to find ways to systematize it, to find processes, and to find efficiencies. Now, I, I have thoughts o- o- on Axios Local. I, I think they're doing- Yeah, no, I wanna get into it.

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I'm glad you, like, segued into this, 'cause they're your neighbors- So-... and they're, like, getting into your backyard. So, like, what's up? Yeah.

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So, so Axios Local, so we, we actually shared a co-working space in the Clarendon neighborhood of Arlington with Axios. And, uh, suffice to say, they have grown faster than us. They're now at the top floor- [laughs]...

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of that building and doing quite well. And I, I'm, I've been really... You know, I, I think I've been really impressed from, from an operator standpoint o- o- of how they've been able to expand.

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I mean, they've expanded Axios Local at a really fast clip i- if, if you really think of what, what goes into it. But they, they've had a model that's uniquely suited to them.

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So they were able to take their existing Axios, you know, these huge lists of, uh, from their existing national newsletters and find ways to, you know, promote the local to them, and so they had a built-in audience.

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Then they had a very efficient model for acquiring new readers beyond that, you know, pr- through, you know, probably Facebook ads and, and some other means.

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And then they, they have the two to three people per site where, you know, there's some, some local rep- some original reporting, but a lot of aggregation, and you have a lot of central, uh, central resources so that those, those products they're putting out, they're very buttoned up.

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You're not gonna find many typos in there. They're well done. The people they hire are good. [upbeat music] I've sampled a bunch of them, and I feel like,

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I, I feel like, uh, I don't wanna cut you off, but like, I feel like a lot of like, you know, purists are gonna be like, "Oh, this is like," you know, not...

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And I'm like, "Yeah, honestly, like, I would get the one, like, in Miami," and I'm like, "Hmm, this, like, gets... This is, like, seventy-five percent of what I need."

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So for casual consumers of, of call it more regional news, so, you know, the, the metro level news, you know, I know a lot of people who, who, who like it.

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I, I do think that you can't rely on, on, on a product like that to get to drill down to the more local level, 'cause it, they're just taking a h- too high of a, you know, a, a, a more higher level view, uh, of the news, and so you're gonna get a breezy read that's easy to get through.

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I, I do question whether they will be able to expand their model much beyond what they're doing.

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'Cause if you look at, at, at a lot of their, their outlets, including the one in DC, there's not a, there's actually not a ton of local advertising. Now, I'm sure they have local advertising in some of their markets.

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Their Charlotte market, where, you know, they acquired Charlotte Agenda, which was just rip-roaring in terms of their, their business when they were acquired. Charlotte's very strong.

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I'm sure there are other strong markets. But DC a- a- and at least a couple of others I've seen, it's been all national advertising.

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Now, that national advertising is an advantage for them because it's giving them a business model, but can they grow much beyond the revenue that a national, you know, advertising model targeting local provides? Yeah.

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That, that's the big question. I'll be an- anxious to see what they do. Yeah, 'cause I don't know if...

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I think that's a great point because, like, if you're gonna create more surface area, as, as the business people like to say, about for adverti- national advertising, like, local is, like, a really inefficient way to do that.

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[laughs] Like, you know what I mean?

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Like, if you're looking for more, you know, if you're Axios, like, you need to create new markets, not, like, just take your existing advertiser base and find new places to, like, place them, I don't think.

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Well, the other thing that, that I think is a challenge i- is the national brand, like, gives you a head start, but I, I think it provides a bit of a ceiling.

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There's people on a local level, they do like things that are, you know, more uniquely local. I, I think local brands just resonate more, and i- i- all things being equal. It'll...

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I'll be interesting, it'll be interesting to see, in my view, you know, whether they can make Axios Local, you know, Axios Charlotte, Axios whatever, uh, a, a brand that really resonates strongly with people beyond where they're at right now.

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Yeah. So what do you think of the nonprofit models? Like, I mean, I know, like, nonprofit is, is, you know, tax designation and stuff, but we've seen a lot of activity with nonprofits.

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And I think it's likely gonna be part of the solution. I always compare whatever happens with local news to kinda like healthcare.

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Like, uh, there's gonna be an imperfect, like, patchwork of all kinds of different things, and we'll never fully get to, you know, blanket coverage.

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But, you know, we could get ourselves a good part of the way there with imperfect solutions.So first of all, there, there are a lot of great nonprofits out there. I, I'm a member of LION, Local- Mm-hmm...

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Independent Online News Publishers. Lots of great nonprofit LION m- uh, members, uh, that are doing great work. Uh, my critique of the nonprofit approach to local news is I, I just don't think it's the main thing.

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I don't think it's, like, the, the, the main outlet for a given local area. I, I don't think that's... I, I think that they do a good job providing certain types of coverage in certain types of places.

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And a difference between, uh, just very generally speaking, that, that it is just a tax designation, so- Yeah... this doesn't necessarily apply.

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But e- especially for those getting funding, you know, institutional funding through foundations and whatnot, you know, your, your priority, whether you think this way or not, your priority is doing coverage that's valued by the people giving you the money, right?

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Yeah. My, my advertisers, they just wanna reach as many people as possible. A- and so in that way, I think the non- the for-profit model, it, it, like, like, you know, first of all, no paywall for me, for me.

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Uh, that's another, you know, point of contention where I, I, I think local coverage should be a- accessible to as wide an audience as possible. I do know that the paywall works for, uh, a lot of sites out there.

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What, what's interesting to me is being able to have as much impact in the community as possible. I don't think you can do that if you're shutting off access- Yeah... to most of the people in the community.

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And by most of the people, it's, like, 98%. I mean, you're not getting much more than a couple percentage of, uh, the overall population subscribing to you. Yeah.

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I mean, that was actually part of the, like, Twitter fight over this. I, I'm, I, I can't believe I'm recounting this Twitter fight.

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But anyway, there was, like, a newsletter writer, I won't drag him, who was like, "Oh, well, you want,

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you want the local paper to break the news a- about, uh, about this co- this fake congressman [chuckles] with a fake record? Then s- then you better pay." Like, and it's like, oh, well, it's your fault for, you know,

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that, that there isn't, like, you know, good local coverage because you're not paying for it, and I don't know if that's- Yeah... totally the best approach. I think pa- paywall's great if you have a, a, a niche site.

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So it works for a lot of, you know, business-oriented publish- publications. The Post, The Washington Post i- in DC, obviously they're big enough that the paywall is mostly working for them. Yeah.

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Uh, although, you know, to- they're having some issues right now. Um- It could be going in reverse.

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[laughs] But to finish- But it's also, it's you gotta, you gotta match it up with your, your business model, right, and your mission. You, you gotta match your business model up with your mission.

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And if your editorial mission is to make local communities more informed about, like, the communities around them, like, it's really hard to square that with a paywall. I think you can... Membership is still possible.

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I mean, you can finesse the direct revenue where you still maintain your mission. Yeah. And our, you know, our membership product, it, it, it's just a couple percentages of revenue. Yeah.

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But what I will say about that is, is that that percentage of revenue this year is the difference between, between us being in the red and being in the green. Mm.

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So even though it's not a ton, it, it's very important for us, where we can't really squeeze that much more out of the advertising side. The support from readers is, is really making a difference.

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So I, I do like the, the membership model. A- and just to kinda land my plane on, on the nonprofit side- Yeah...

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I think that the nonprofit mo- nonprofits on the local level, on the local news level, are gonna play a very important role in the overall ecosystem going forward.

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I, I just think that n- they're not gonna have the ubiquity of, like, the local paper, because they're gonna approach their coverage in a, in a more niche way that's not necessarily gonna, you know, a- appeal to the entire community or, you know, maybe they're not even necessarily trying to do that.

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Maybe they're focusing on a, a specific type of news i- in a metro level. Yeah.

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You know, we, uh, a, a line member that comes to mind is one that, that covers health news in North Carolina, which is, you know, I, I think it's awesome that they, they're able to cover an important topic on a statewide level and use a nonpro- I think they're a nonprofit.

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If, if so, I apologize. But it, you know, I, that's, that's, I think the non- I think why you have a nonprofit is to help fund something that wouldn't otherwise exist. Yeah.

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And I feel pretty strongly that, that for-profit local news can exist, uh, in most areas out there. And, and, and so I, I don't think that, uh, nonprofit's gonna be necessarily

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the thing that achieves the ubiquity that everybody's hoping for. Yeah. I couldn't agree more. I mean, I, I think, like, the, ultimately in, in the market, you have to create a product people want and value.

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And, and they can value it with direct payments to you, or they can value it with their time and their attention and their engagement with your sponsors, hopefully.

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But ultimately, when you're running a, a for-profit business, you've gotta be, you've gotta be focused o- on, and particularly if you, particularly if you're able to make it, like, you know, your audience being the focus.

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Because, like, you have to be focused on your audience, where I think, like you say, you bring up a good point, where I think a lot of times people skip over that, is if you're relying on a foundation for your, your sustenance, well, it's clearly going to steer, it's gonna steer your coverage just as much as, like, the idea that you're not gonna have any quote, any quote-unquote conflict if you're, like, a nonprofit to me is naive to some degree.

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I think if you have, you know, a, a group of funders who are, you know, mostly kind of thinking the same way about how, the direction your news outlet should be going, you're gonna go that direction.

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You're not going to, uh, you're gonna be a little reluctant to do something that's going to upset a large percentage of the people, of the revenue you receive.

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Now-Look, there, there are conflicts of interest in any business- Yeah... any media business. You know, uh, obviously advertising, there are some fraught areas.

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But I, on a local level, we have a couple hundred advertisers, uh, across our three sites, and so any one of them drops away, it's not killing us.

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That's the other thing is, is if you're a for-pr- if you're a non-profit with a lot of individual funders, you know, a lot of people contributing to you, you maybe have more freedom to, to go certain ways that, uh, you know, a, a one or two large funders being your main sources- Yeah...

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of revenue wouldn't necessarily want you to go. Yeah, you need a broad base. That's [laughs] no matter what. I- if it's subscription, you need a broad base. If it's advertising, you need a broad base.

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And, and if you're relying on grants, like, you need a broad base. 'Cause otherwise, you know, you're gonna be beholden to- Yeah... a couple of people.

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You are always beating the drum of having, you know, a diversity of revenue sources. Exactly. And- I try to. We, we've been trying that. We've been trying to sell those T-shirts. Okay. Uh- Awesome.

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I wanna get one, but, like, we're gonna le- leave it there. I really appreciate you doing this, Scott. Thank you, Brian. [gentle music] Yaron, welcome back.

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Let's talk about, like, everyone's favorite topic, the, the death of the third-party cookie. Are you game? I'm game. I'm game. I think that's part of, uh,

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the, you know, the issue that I have with, uh, the whole cookie, cookie-based, uh, advertising world, which is really values retargeting regardless of where the, uh, the user is, if they're in a premium environment or not, whether they're engaged or not.

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And, you know, in that respect, the eventual, sometime in the future, death of, uh, third-party cookies I think is actually gonna be...

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It, it'll be short-term painful for many publishers, but I think long-term, it's probably the best thing that's happened in about 20 years because it, it kind of brings back the sovereignty, the, the importance of a, the premium-ness and the user experience on publishers.

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Uh, I think that's probably the biggest thing, uh, that could've, uh, uh, could've gone in favor of, uh, publishers. I think that's gonna be good. You know, it's been- People keep telling me it's gonna die.

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I, like, I, you know, I think I remember it was two years ago, I, uh, I had, like, our, the creative director at, at Digiday come up with, um, you know, uh, all these things.

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They put the cookie in a guillotine and, like, all this stuff around the cookie, but yet the cookie is still freaking with us. Like, [laughs] eventually, supposedly, it's going away.

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Um, but, like, let's just assume it is going to eventually go away.

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I mean, first of all, for, for the, for those who are not totally up to speed, how did the third-party cookie s- play this unlikely central role in the advertising industrial complex, as you called it?

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[laughs] Yeah, it's, it's weird, but, uh, when the internet started, and I was starting my first companies around, around that time, um, '95 or so, uh, the, and the cookie first came out.

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That was, uh, it was like a very neat hack. Uh, I looked at it and said, "Wow, really cool idea. Very neat." And, you know, it's gonna survive a year, maybe two, before kind of the hack is, is prop- properly productized.

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And here we, we are 25 years later or more- Yeah... and the whole industry is, uh, is based on third-party cookie. I, look, I, I think it's a, it's a terrible identifier in, uh, in two ways.

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Uh, the first way is the fidelity of data is very low. Cookies come and go. They get deleted. They're, they're very hard to keep, uh, persistent over time.

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And so for a user that wants to be identified, wants to register for a service and wants to get a better experience and personalization, uh, cookie-based is, uh, is low fidelity for that.

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On the other hand, it's kind of a, a net that captures all data across, uh, places where users understand and don't understand.

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And so it's, uh, very broad in, in the bad sense, and it's not high fidelity enough in the more narrow sense.

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And so, you know, I think it's high time that as an industry we ultimately get rid of it and, uh, find identifiers that are user-driven, where the user understands what they, data they're opening and who they're opening it to and have those be more persistent.

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But it's, it's gonna take time. It's a whole industry. Yeah.

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So do you, from your perspective, is, is the greatest argument against the, the cookie just that i- it's, it's, first of all, it was never meant to do all the things that it's, it's doing, and it's not very good at doing them probably as a result of it?

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Or is it around it being, like, a true, quote-unquote, "privacy threat"?

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Because I, I can remember over the years, I've always said, like, with, like, with privacy and this industry, it was always the last panel of the day at events, okay, number one.

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[laughs] And number two, like, the responses ended up, 'cause I've had to moderate a lot of these last panels of the day, Yaron, I gotta be honest with you, and the responses were always the direct mail guys are sketchier, number one.

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[laughs] And, uh, no PII. There's no victim. Find me a victim of, like, you know, the cookie. Like, where is the victim? Um, but it sounds like you're just saying, like, it's a bad tool.

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I, again, I, I think it was a, uh, intended as a short-term hack that's, you know, you, you don't base an entire industry on a, on a short-term hack that was built for, for something very different.

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Um, I, as an identifier, I, you know, I think probably as humanity, the, um, the vocabulary is probably, uh, not doing us a big favor in, in using a term like privacy. Uh, I do think there,

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uh, uh, the stuff that usually can be done by cookies I don't view as any violation of privacy. No one's coming to my home. No one's knowing what my name is and all that.

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Um, but I, I do thinkPeople get the eerie kind of, uh, creepy- Yeah... experience of, uh, you know, I touch this shoe on one site, and I'm like, how is that following me?

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I feel like I'm in a dark alley and I have this helicopter with the [chuckles] with the spotlight on me wherever I go, and I think that creepiness is something we need to get rid of. Yeah.

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I mean, that was always the thing. It's like the, what's creepy and what's not is always is the, the, the question. And, and the problem is it's like it's very vague, right?

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It's like and, and it's not like cut and dry, and I think everyone wants like cut and dry answers.

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And I think particularly internet advertising to me was mostly built by technologists and like sometimes like just because you can do things with the technology doesn't mean you should.

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Like, so maybe like have a few humanities majors around. As a humanities major, I'll just say like don't cast all of us out. I, you already said we-we're gonna still need editors, so I appreciate that already.

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Um, but like I, I think that, you know, when we talk about the, the trust issues and when it comes to, um, publishing and journalism, I think you can't discount this because the system got built to such a degree that so many things had to happen in the back room.

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It's just like now they bring like the credit card machines finally in the United States to your table, and somehow the rest of the world, they were able to do this for like a couple decades before us.

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I'm glad it finally arrived. Um, but like my problem is not like that everyone was like stealing my information by taking my credit card and disappearing with it for twenty minutes.

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I'm like, "Why are you taking my credit card for twenty minutes and disappearing with it?" Like, it's just very strange. Um, I don't know what's going on in the back room.

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Maybe you're making a copy of it, maybe you're not. I don't know. Um, and I think that is what, you know, ends up leading to a lot of the more conspiratorial things. Like I, I remember

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right before COVID, I was talking to a, a, a group at a agency in Boston. There was like two hundred people from an ad agency there. I think it was Digitas.

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And like I asked how many people think that like Facebook is listening to them through their phones. A-and a majority of hands went up, right? [chuckles] I don't believe Facebook is listening to us through our phones.

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No, I, I don't either. [laughs] But, but I keep having friends that are saying, "Ooh, I had this, uh-" Right...

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thing where they're listening, and y-you know, I think people don't understand, uh, the coincidences and just probabilities just kind of calculated- Yeah.

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But I, but I think to me the, the-- it's so unlikely, and I'm like, my God, like if you see how like, you know,

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duct taped together a lot of these systems are, there's no way that like that they would l- would be able to do that.

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But I think because like a lot of the stuff has not involved consumers, it's never been truly explained to consumers, and so much is happening by companies that they've never heard of and never actively l- had a relationship with in order to like provide the experience that like their minds go, um, in this direction.

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So I think that's like-- But like I think from a publisher perspective, what I'd like to get at is the big question, and it's like hard because there's so many different kinds of publishers, but like are publishers broadly speaking winners or losers in whatever this new era that we still haven't totally identified what it is, 'cause we don't know what the identifiers are gonna be, as this new era begins of digital advertising and targeting?

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Yeah. So as you said, there are different, a lot of different flavors of publishers, but I think in general, the publishers are gonna be the biggest benefactors of, uh, this.

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I think the biggest losers are gonna be, uh, the folks, especially technologies on the advertiser side, uh, that are trying to recapture users in that dark alley with the, with the helicopter.

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Uh, I think for publishers, th-they're the ones that are touching users and engaging them, uh, day in, day out, and I think that's the kind of engagement

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they haven't been able to sell to advertisers for the past fifteen, twenty years because those users are just a commodity that can be captured by rechargers.

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I think suddenly the, really the only place you can get them is by interacting with the publishers that best engage their, their audiences. Yeah.

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But like, so everyone's talking then about first-party data and, and known users, getting users in a logged in state and all this, and I think that that sounds like a great like building block and stuff, but the reality is like most publishers, the overwhelming number of users who are going to be arriving on their site are gonna be unknown, right?

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Probably for most, uh, publishers, you know, it's probably gonna be a Pareto, uh, eighty percent, uh, unknown for a while and, and maybe, maybe if they're lucky, twenty percent.

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The thing is, I don't think it's a trade-off of, uh, you know, one, one-to-one ratio of a user being unidentified or identified.

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I think the fidelity of data you have by a registered user, someone that, that knowingly and intently, uh, put in their email and has logged in, uh, the value of that is so much greater than one anonymous user, uh, where I think the, uh, our models, uh, uh, that we played around with showed that if you got just fifteen percent of your audience to, uh, to register, not, not, uh, paywall, just register with their email and be logged in, the fidelity of data that you get across browser, across, uh, device is so much greater than on advertising you're gonna make the, that trade-off worthwhile.

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[upbeat music] Thanks again to Jay Sparks of Podhelp us for producing this podcast. To find out more about how you can get your own podcast, please visit podhelp.us and get in touch with Jay.

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We'll be back next week with, uh, another episode. [upbeat music]