Hyperlocal ad network scales to local news environment

Community news publisher Justin Carder learned first-hand the shortcomings of traditional news advertising systems. Carder started Capitol Hill Seattle blog in 2006, a site that is now read by 5,000 people daily, according to information on the site. CHS was voted “Best Site — Specialized Geography”  in 2010 by the Society of Professional Journalists.

Carder noticed a big void in small scale advertising.

“There was a day where CPMs were ridiculous, then they plummeted to a penny,” Carder said. “And the [Google] AdSense framework is a misunderstanding. On average, it’s just garbage — its pennies and you have to have millions of impressions, not thousands.”

Seeing, and being part of, the explosive growth of independent community news start-ups around Seattle — a hotbed of entrepreneurial journalism — Carder has ventured into advertising sales territory geared specifically for new local, online journalism. Carder and business partner Scott Durham run the the Seattle Independent Advertising Network, or SIAN.

“You look at the environment around local news, and there really aren’t any good networks,” Carder said. “The existing ad network opportunities for independents do not support hand-crafted newsgathering.”

SIAN begun in 2008 by Instivate, a company co-founded by Carder and Durham. Instivate is behind Instiads, the ad platform that serves SIAN. The network has about six active campaigns at a time, and sometimes buys advertising inventory from a third-party provider. The two also experimented with place-based blogging platforms through Neighborlogs a few years ago and which has since folded to concentrate on the advertising network, Carder said.

Carder said 80 percent of advertising revenue goes to the publisher partner, and the network retains 20 percent. He said yearly revenue this fiscal year will reach about $130,000. The network is small compared to national ad networks that sell in huge bulk. He said publishers make “about enough money to buy dinner” once a week, but it’s a useful tool for exposure.

“This is puny,” Carder said. “We’re talking about over 1 million impressions in the course of a month. In a day, maybe 40, 50, 100 impressions. This is about independent news, about giving an added flow of revenue that it just happens that they can take advantage of. If they had any other choice that was worth more, these people would change their inventory, but we’re it. We’ve got the space.”

Seattle-area hyperlocal publisher Amy Duncan, who runs My Green Lake, is one of a dozen neighborhood advertising partners in SIAN. Duncan said aside from her own advertising efforts, she has two spots dedicated to SIAN on her site — a banner ad under the first post and a spot on the home page’s right-hand column. She said there are no SIAN ads there today due to low inventory at the moment.

“We’ve had these spots for about two years, displaying network ads most of the time,” Duncan said in an e-mail. “The benefit to us is that the network opens us p to citywide or regional advertisers which might not otherwise contact individual neighborhood sites on a one-by-one basis.”

However ad networks are not for all small news publishers. Tracy Record of West Seattle Blog, an early entry into the community news start-up space, runs a profitable site and sells her own advertising department with her husband. The two draw on their past experience in journalism and news advertising sales.

“We are currently not participating in any ad networks, either regional or national, and  never have,” Record said in an e-mail. “Our sponsorship-space priority is to serve West Seattle businesses.”

Carder said SIAN ad impressions are sold at a premium since the network can deliver a specific location and audience, a value to advertisers.

“People call us, they need inventory in the city. They know we have a unique and highly engaged audience. And they call us,” Carder said. “Our prices are high compared to what you pay on AdSense, we’re talking $7 CPMs, not 7 cents.”

Carder said SIAN  used to be an aggressive sales network, but that tactic was too expensive to maintain. Instead, the company receives calls when publishers need them.

“What we do now is provide a service,” Carder said. “They call when they need inventory.”

Coverage map of SIAN network:

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