State of the Spot Two years in......2011Trying to plan for another two....2013
Not Just About Journalism• Spot.Us doesn’t want to save journalism for journalism’s sake.• This is about serving the information needs of local communities.
How Spot.Us Worked • Original Model:Principle: Bring transparency and participation to the process of journalism
Added to Model • One aspect of journalism is advertising. Our version of this, based on our principles of transparency and participation is “community-focused sponsorships.” • Acts of engagement are monetized by letting community members decide where the sponsorship funds go. + = $ Opt-in Act of engagement Fund a Story A user clicks“Free Credits” + Provide anonymous feedback = You decide where the funds go. to the sponsor Our advertising budget - your decision
Sponsorship possibilities.... endless • Included with Spot.Us credits are coupon codes. • Acts of engagement that incorporate Twitter, Facebook to increase ROI and sharebability of sponsorship • Survey results shared publicly, if sponsor approves, to stir conversation about topics (the Pew effect) A new form ofadvertising that is....... • Transparent and participatory. • Empowers people to act as humans rather than treats them like “This is one of the best advertising eyeballs. experiences I’ve ever had. I gave something of what I know, I got • Inspires engagement - making it something of what they wanted me valuable for the sponsor as well.to know, and I gave the resulting spot $ to a story I wanted to support.” • Mutually beneﬁcial relationship.
Strategic Options for Spot.UsBoldness Scale 1 • Consider it a successful experiment. Extrapolate lessons until funds run dry and we experience the Spotocalypse. 3 • Continue as open-source lab experiment with incremental additional effort. Would require a sustaining grant in late 2011 early 2012 to continue at pace. 7 • Scale aggressively, remain not-for-proﬁt with focus on local news. Aim for self-sustainability within 2-3 years after Politically incorrect crosshairs of victory investment from a foundation. 10 • Spin-off into a for-proﬁt company. Seek private funding for growth.
Ideal Revenue NumbersWhat David has sold personally in 6 months What is needed to become sustainable. with all of his copious spare time. • $35,000 in sponsorships • $15,000 in sponsorships a week. “sold” (one 5k donation) • Rate at $6 every ‘act of engagement.’ • Average sponsorship: $5,000 • Spot.Us takes 20% ($1) every act of engagement. • Average 1 sold a month. • 2,500 active engagements a week.* • $20,000 grant from • Roughly 25 pitches a week at $500 each, Harnisch Foundation every pitch getting 100 community members allowed us to build and to take action.* subsidize some * Selling sponsorships is the hard part. If we have the sponsorships. sponsorships I’m conﬁdent we can scale up to 30 pitches a week with 100 community supporters (over time).
To Sell sponsorships - Must answer the following • Audience demographics and numbers • Metrics: Average time of engagement (2:45) • Average response time (Currently: 1,000 users in two-three weeks - need to get this to 2,500 in one week) • Show ROI for sponsors (Can we build a coupon model?) Compare this with Cost-per-action rates. • The time problem: Need a sales person (team?) (In short: What’s the measurable ROI on top of the concept which most agree is sound
To increase number of pitches• Find organizations that see beneﬁt in making money (that’s not a hard sell).• Branded experience via an A.P.I. and widget.• Find percentage of survey takers who become donors (for nonproﬁts).• Let them publish ﬁrst.• Cross pollination of communities/linking, etc.
Conclusions and Next Steps CONCLUSIONS• The model DOES work at our current scale.• We aren’t going to disappear in 2011 - but in 2012 we face serious hurdles we need to address.• Redesign #3 in progress - reaching optimal user-interface.• See slide #4 - make a decision. How can we tackle what is in the crosshairs? NEXT STEPS• Find a way to apply for grants without distracting from forward momentum. Kauffman Foundation (rejected) Omidyar Network, Whitman Institute, McCormick Foundation, Knight Foundation, Ethics and Excellence in Journalism, Harnisch Foundation, Carnegie Foundation, MacArthur Foundation. etc.• Pursue relationships with media planning and buying agencies that will take on this exciting challenge of selling community-focused sponsorships. Note: Without foundation support, many won’t take the time to learn how to sell unique adverts for an organization that isn’t at a high scale and might not live past July 2012.