Case Study: How Village Media’s strong network boosted their business during crisis

SUMMARY

Village Media is a network of 15 O&O properties in Canada, as well as 21 partner sites across Canada, the US & UK. There are not many bright spots in local news, but Village Media has managed to both build and maintain a network of sustainable local news sites. A key part of this success is their ability to build deeply engaged audiences. For their mature sites, 20-30% of the population in their markets are Brand Lovers (visit site 15+ times per month). And on the revenue side, even in the midst of the COVID-19 pandemic, where many local publishers have closed or furloughed workers, and digital ad spend has taken hits of 15%+, Village Media increased revenue. Comparing April of 2019 to April of 2020, Village Media's revenue was up +67%, and on average their sites yield a gross margin of 20-25% after 3 years in operation. Below, we lay out the formula for their success.

All % of pageviews & % of referral metrics indicated are from February of 2020, averaged across 3 representative Village Media sites: Orillia, Guelph, and Midland. Revenue figures are from 2020 to date (averaged across all O&O sites).

SITE SELECTION

Village Media takes a very scientific and regimented approach to entering new markets. They target cities that are:

• Geographically distinct and isolated. These are often places where the majority of citizens can say that they were "born here, live here, and work here." These are communities where citizens are invested in what is happening locally, and so often a good fit for local news.

• 20-200k in size: Markets with a population of less than 20K are challenging to make profitable because there is less traffic and less local business to purchase advertising. Conversely, coverage in larger cities can be too diffuse to be relevant to the average citizen (e.g. if you live on the northern side of Toronto, you're less interested in hyperlocal news on the southern side). 

• News habit but poorly served: A market without any media is challenging since Village Media then has to enter and build up that habit with local citizens. Thus, VM prefers to enter cities that already have a local news publication, or ideally, where a local news site has recently gone out of business. In this case, Village Media can then enter to help meet the local audience's unmet need for local news. 

• Demographics: The Village Media model has found more success in converting older audiences to brand lovers and factors age demographics into site selection.  

• Staff: Have seasoned reporters and sales people who ideally are well-connected and known within the community.

Once they have targeted potential cities to enter, Village Media surveys these cities asking questions about the importance of local news, where people get their news today, and whether they feel local news coverage is adequate. They use SurveyMonkey to build these surveys, and utilize Facebook to deliver them. Village Media then uses the survey response & comments to shortlist a few markets. From there they conduct additional surveys in these markets, and assess potential staff to hire in each market before making a decision.

CONTENT STRATEGY [% of pageviews for representative VM sites]

Two key aspects of editorial coverage are publishing cadence (e.g. 10-15+ stories/day for 5 journalists) and newsdesk coverage (evenings, weekends). The combination of these two strategies result in a site that feels fresh and updated, which further incentivizes potential readers to check in often. For core local news coverage, Village Media seeks to be first to a story, and then update with additional information as it comes in. Village Media also seeks to be the information resource for the community, so if a citizen wants more information on a topic, the news site is the first place they look.

Traffic by topic:

• [44.78%] Local news: The top news of the day for the local area, including topics like city government updates, restaurant/store openings or closings, and other topics of local interest in the community. Some of these may not be typically covered at local news sites (e.g. events, raffles, committee or club meetings) but if they are interesting to the local community, reporters cover them. 

• [16.44%] Obituaries: Sourced from local funeral homes, and manually added to the site (via postings emailed to staff and uploaded, or manually scraped from approved funeral homes). 

• [10.38%] Crime coverage: including press releases from local and regional police departments

• [3.96%] National and regional coverage: to complete reader's understanding of what's going on around them. These are ingested via feeds from the Canadian Press (similar to the US's Associated Press).

• [2.04%] Local sports coverage

• [1.28%] Classifieds: Readers can add postings that range from buying a used couch to finding a new job. For many sites it is difficult to build the flywheel effect to make this work. 

• [0.63%] Polls: evaluating community opinion on recent events

• [0.25%] Event calendar: Users can add community events

• [0.21%] Fuel prices: cost of fuel in the area 

• [0.15%] Weather: displayed at the top of each page, as well as on a separate page in greater detail. Sourced from Environment Canada data.

AUDIENCE DEVELOPMENT [% of referral traffic for representative VM sites]

At launch, a larger portion of traffic comes from Facebook and paid search and social. As a site matures over time, traffic begins to shift to coming from direct, organic, email (newsletter) and other referrals. Top referral sources for Village Media sites are the following:

• [47.80%] Social Media: Village Media uses dlvrit.com to auto-post stories to their social pages e.g. Facebook and Twitter. The majority of their referral traffic comes from Facebook (90%+)

• [16.50%] Direct: Readers that navigate directly to the site URL. Popular sites may see even larger portions of direct traffic, as readers begin to directly navigate to the site as part of their routine (vs. coming from social, search, or email). 

• [12.91%] Organic search: For newer properties this percentage is much smaller (e.g. 2.25% for Midland) growing to 20.14% for mature sites like Guelph. Most of enabling this is waiting for traffic to grow organically, though VM also does basic SEO (e.g. sitemap in Search Console). 

• [9.64%] Referrers: The majority of this traffic comes from other aggregators such as Google News and Flipboard. Each of these platforms have different inclusion & optimization processes. 

• [8.03%] Newsletters: Village Media collects emails via an on-site pop-up and Facebook email acquisition campaign. Newsletters are sent daily, with stories from the day and a top-nav that allows users to easily navigate back to the site. 

• [1.84%] Paid search: Brand keywords are purchased on AdWords, for terms like "communityName News" "communityName Obituaries" and "Competitor Name".

• Paid social: VM promotes their page on Facebook to attract additional followers. 

• Events: VM seeks to be very visible within the local community--from attending events with branded t-shirts and handing out stickers, to billboards and wrapping cars.

TECHNOLOGY  

Village Media and their partner sites use a proprietary CMS built in-house called Community Engine. They use Google Analytics and News Consumer Insights to monitor and optimize performance. For advertising, Village uses Ad Manager as their ad management platform and Advendio (SalesForce extension) to connect the sales team's orders to Ad Manager. The ad creative is built using Adobe products, typically Photoshop. On the editorial side, their team uses their own social media accounts to monitor for community stories, as well as occasionally aggregation tools like CrowdTangle or TweetDeck.

MONETIZATION  [% of revenue for representative VM sites]

Village Media's monetization strategy relies on creating a product (site) that is the destination for community information. Once that is achieved, selling local ads is a much easier sell. Village Media's monetization strategy is also differentiated by a sales strategy that is very reliant on direct-sold local ads. They also sell programmatic to fill remnant inventory, but it's very challenging to make enough with programmatic ads (lower CPMs) to be profitable. Village Media has assembled a set of local advertising solutions that match business owner's needs, and as such can be sold at a premium.

• [74%] Local ads: This custom set of advertising solutions address local business's needs to be discovered by potential local customers (Hub business directory), drive brand awareness (direct display), and establish the business as a pillar of the community (Community Leaders Program). To offer more context on each of these programs, the Hub business directory offering includes a sponsored article featuring your business, a premier listing in the business directory, $1000 of classifieds posting credits, and a site rotator "logo ad" unit with a minimum 10k ad impressions.  Direct display offers $6K in advertising via standard CPM (traditional IAB units like Tall Blocks and Big Boxes). The Community Leaders Program (CLP) highlights the company's commitment to the community and support for local news, and typically includes sponsorship of 52 articles per year on a topic underserved in the local community currently (e.g. stories about volunteers making a difference covering homelessness in the area), and 1M ad CPMs. By nesting these advertising options, it makes it an easier sell to convince an advertiser to uplevel to the next product, where they will receive a new set of advertising tools, along with what they got before for free. 

• [4%] Contributions: Village Media recently started to promote contributions through Facebook and their email newsletter, as well as a dedicated page on their site. To date, email has driven the majority of contributions. 

• [22%] Programmatic: Standard programmatic advertising trafficked via Google Ad Manager is used to backfill any remaining open inventory.