The important lessons of Backfence’s closing

Backfence logoThe announced closing of Backfence has brought about some refreshing and much-needed discussion on the subject of hyperlocal news and the web. This is an important discussion, because a lot of companies are looking to hyperlocal as the salvation of their business model. But the concept is misunderstood and, as a result, carries a false promise for mainstream media.

Backfence, with 13 sites and $3 million in financing couldn’t build the audience or the revenue streams necessary to generate a return on the investment. Judging by the reaction from the web community, Backfence suffered from poor design, insufficient feet on the street, poor choices for locations, or it was simply ahead of its time. When web businesses shutter, there is no lack of analysis from the web community.

But in this feedback, there are some real gems for those who are pursuing hyperlocal as a strategy for their company.

Let’s begin with Jeff Jarvis and comments to his entry at Buzzmachine:

The biggest challenge facing local news organizations today is figuring out how they can gather more and produce less. That is, how can they help other people produce, so the news organizations have something worth gathering?

After trying one of everything in hyperlocal, I’ve come to believe that this will happen only by combining those various models — so people can join in however they want to — and by answering the questions: How much news will members of the community create and share? What do they need to do that? What motivates them? How can local news organizations enable and encourage them?

Hyperlocal will not, I firmly believe, happen at one site. It will work only via networks: content, commercial, social. It will work by gathering, not producing.

But I still don’t know whether it will work. We need to do a lot of development and experimentation.

In the comments to this post, Mike Orren of Pegasus News proves once again that he’s one of the smartest people around when it comes to hyperlocal efforts. I would advise anyone considering such a venture to pay attention to what Mike says. One of his “truths” is that data is what brings people to hyperlocal sites, and many traditional news people are hung up on other types of content. And building databases is a lot of work.

Our site has neighborhood maps of no more than a few miles radius with stories, events and garage sales plotted. Part of the way we do that is by mining city and school district sites for news in areas where there are no content partners or bloggers to work with.

It ain’ glamorous, but if there’s a temporary road closing near you, it’s news. And you can’t wait/depend on someone in that community to blog it.

Where it gets cool though is that these trivial, government-supplied neighborhood stories, mixed with a little search engine mojo, become breadcrumbs for folks who come in the door, comment on what you got right/wrong, and then start contributing regularly with real narrative reporting.

I won’t kid you — that’s a slow process. And it takes a real farmer to cultivate that kind of participation. The seeding with “release” type news has to continue, because without a flow of content, there’s no frequency and without frequency, today’s item written by a member of the community won’t be read or responded to–Meaning they won’t be repeat contributors and you won’t have a business.

There is also some wonderful discussion over at TechCrunch, only from a slightly different perspective. Here’s an example from the comments:

To some extent, you have to wonder just how interested people are in reading about the town’s little league championship, what happened at the church BBQ on Saturday went and what was decided at the last City Hall meeting. I would argue that the future of news and information distribution is more likely to be hyper-targeted than hyper-local. That is, most people, faced with increasingly little free time, have very specific interests and would probably be most receptive to services that enable them to efficiently and accurately aggregate news and information about those interests. Obviously, there are services like this out there and I think they’re more likely to have long-term success than services which are focused on very narrow local topics.

Both of these threads are well worth the time to read. Follow the links, too, and you’ll have a pretty good understanding of where people stand on the topic.

One problem in analyzing such efforts is the natural tendency to view success or failure in absolute terms. Backfence was only a failure in its pre-defined business goals, but that doesn’t make the effort itself right or wrong. It could just as easily be that the business goals were off-the-mark. Investors want a return, after all.

Hyperlocal is a currently popular theme among mainstream media companies with visions of increasing their reach/frequency numbers by pulling in suburban or outlying users. Advertisers in those communities, the thinking goes, will want their goods and services positioned within such a framework. The trick, of course, is to create “content” without spending a lot of (or any) money by building an attractive user interface that enables citizens in those communities to make the content themselves.

There are two big problems with most hyperlocal efforts.

One, we get hung up on content when content isn’t the problem. The question is how do you make money in a disintermediated, distributed media paradigm? Experiments in hyperlocal media don’t fail because of content; they fail, because they can’t deliver the promise of sustainable revenue. It is the advertising paradigm that’s the real problem, not how to make more or “hyperlocal” content that such advertising will support.

I’ve seen sales people salivate over the idea of creating a “page” or “section” or “channel” that will deliver an audience that traditional ad models can serve. While it’s true that some advertisers is suburb A will want to put ads in a web platform that serves suburb A, the numbers just aren’t big enough to justify the expense, because the ad model requires a BIG audience in order to deliver ROI. I know there are exceptions and that I’m making a generalization, but we simply have to start thinking differently about this.

This is why I keep harping on organizing the local web and building databases of knowledge at the local level rather than trying to make another content play. Google (the hyperlocal winner) has proven that advertisers will pay a premium for actual business leads, but that has never been a part of mass marketing. How we put advertisers together with users is the key, and “news content” isn’t the only way to do that.

Jeff Jarvis is absolutely correct when he states that network dynamics provide the revenue key for tomorrow, but that key will be more about direct marketing or micro marketing than anything resembling the old reach/frequency model. And Mike Orren is spot-on when he states that “little crumbs” of data ARE news at the hyperlocal level.

Two, in terms of building sites that appeal to “local” people, we simply cannot begin with revenue assumptions. In fact, I would argue that this guarantees business failure right out of the box, because the whole business of local advertising is evolving. How on earth can we create a business plan based on revenue when we don’t know what that revenue play will be? We simply must have the courage to move forward to build audience before we tackle monetizing that audience. If we do this, we’ll build things differently, because we’ll approach the process differently.

This is the flaw of the Newspaper Next recommendations, which begin the brainstorming process with revenue goals. This is entirely backwards, and it’ll produce the same kinds of “return” that the Backfence effort produced. Again, it’s the mass marketing paradigm that’s being disrupted by the personal media revolution, not the distribution of “content.”

I believe strongly that niches are where it’s at downstream and that the long tail is the economic model for tomorrow’s media, so I very much like the “idea” of hyperlocal. But really, folks, Google is the hyperlocal model and their global mission ought to be our local mission — to organize our community’s information and make it universally accessible and useful.

We owe Mark Potts and Susan DeFife, founders of Backfence, kudos and thanks for the vision and effort that went into the project. Now let’s learn and move forward.

Comments

  1. Nice writeup. Definitely agree that in general, niche media is the way to go. Hyperlocal media will have its place, but I don’t think it can ever reach the old local media model. So whether it’s an interesting biz opp really depends on your lens (forward-looking or backward-looking)…

    search is entirely a different story…

  2. I agree that Backfence had a tough row to hoe for a variety of reasons, but what about this factor: Reston is served remarkably well by three weekly newspapers. Not bad for a population somewhat north of 56k that isn’t even a town. Can the demise of Backfence also or actually be a case of an entrenched non-digital media slaying a newcomer?

  3. WestportNow.com is now in its fifth year as Westport’s 24/7 news and information source. We draw more Web visitors than any newspaper site in the area and frequently break stories and post pictures that are exclusive.

    Area newspapers and cable, radio and television outlets frequently cite us as a source or use us as a tip service.. In the last year, we had more than 50 citizens contribute news and photos. Last month, the Connecticut section of The New York Times ran a front-page profile of one of our regular photo contributors.

    Earlier this month, the billionaire founder of a Westport-based hedge fund posted a comment on a story about his charitable giving habits that itself made news, bringing widespread coverage by others.

    Hyperlocal news can be done successfully. It just takes commitment, dedication, and consistent reporting of news in a credible manner that cannot be found anywhere else.

    Gordon Joseloff
    Publisher
    WestportNow.com

Trackbacks

  1. […] The closing of Backfence this week has encouraged good discussion about hyperlocal content. Terry Heaton pulls some of the threads together in a post today. […]

  2. […] Backfence.com, a pioneering hyperlocal media company, is shutting down. Terry Heaton, pulling together Web commentary on what he calls some important lessons, says: The announced closing of Backfence has brought about some refreshing and much-needed discussion on the subject of hyperlocal news and the web. This is an important discussion, because a lot of companies are looking to hyperlocal as the salvation of their business model. But the concept is misunderstood and, as a result, carries a false promise for mainstream media. […]

  3. […] THE IMPORTANT LESSONS OF BACKFENCE’S CLOSING  —  The announced closing of Backfence has brought about some refreshing and much-needed discussion on the subject of hyperlocal news and the web.  This is an important discussion, because a lot of companies are looking to hyperlocal as the salvation of their business model. Source:   Terry Heaton’s PoMo Blog Author:   Terry Heaton Link:   http://thepomoblog.com/archive/the-important… Techmeme permalink […]

  4. […] ___ Related: Terry Heaton rounds up discussion of the Backfence closing from around the Internet. […]

  5. […] — pomoblog. An encouraging prescription as long as Google and AP don’t get the idea that they can aggregate content from citizen bloggers without help from regional news organizations. […]

  6. […] Terry Heaton’s PoMo Blog: The important lessons of Backfence’s closing “[D]ata is what brings people to hyperlocal sites, and many traditional news people are hung up on other types of content.” (tags: hyperlocal data journalism backfence) […]

  7. […] Local (and, “hyperlocal”) company Backfence is shutting down it’s 13 community news sites in a few days. Check out the comprehensive write-up at Screenwerk, Terry Heaton has a great “lessons learned” post, and Scott Karp writes Wrong On Hyperlocal: Google And Web 1.0 Killed Backfence. […]

  8. […] The important lessons of Backfence’s closing — Terry Heaton “Backfence suffered from poor design, insufficient feet on the street, poor choices for locations… [there’s an opportunity in] organizing the local web and building databases of knowledge at the local level” (tags: internet participatory journalism hyperlocal citizenmedia backfence) […]

  9. […] There are many insightful posts examining the reasons for Backfence’s demise. But essentially  start-ups that fail all do so because they run  out of money before they learn the lessons that can put them on the path to profitability. […]

  10. On Hyperlocal News Sites

    Terry Heaton summarized why the Backfence experiment failed. Of note, is the distinction between hyperlocal versus hypertargetted. Increasingly, the physical world is so small that people who share common interests no longer live in the same town, or i…

  11. […] Terry Heaton has aggregated the views of several commentators, including Jeff Jarvis and the good folks at TechCrunch, but Terry’s own view really nails it: I believe strongly that niches are where it’s at downstream and that the long tail is the economic model for tomorrow’s media, so I very much like the “idea” of hyperlocal. But really, folks, Google is the hyperlocal model and their global mission ought to be our local mission — to organize our community’s information and make it universally accessible and useful. […]

  12. […] The important lessons of Backfence’s closing at Terry Heaton’s PoMo blog […]

  13. […] “Hyperlocal” ist neuerdings der Kampfbegriff der Lokalzeitungen. Letzlich zeichnet sich ein Dienst durch Hyperlocality aus, wenn er seinen Leser oder Nutzer an seinem Ort mit seinen Bedürfnissen erreicht. Das klappt nur dann, wenn man weiß, was der Nutzer braucht. Daher auch der (nicht zuletzt vom Scheitern des angeblich so hyperlokalen Bürgerjournalismus-Portals Backfence geprägte) Gedanke, dass eigentlich derzeit nur Google wirklich hyperlocal ist, weil Google über die Suchanfragen weiß, was ein Nutzer sucht. Dabei sollte es doch auch die Lokalzeitung sein, die weiß, was ihre Leser interessiert. Wie wäre es jedoch mit der Lokalzeitung, die sich mit lokalen Diensten umgibt — dazu gehören natürlich Informationen über Events, Preisen, Angeboten, statistisch darstellbaren Ereignissen. Letzlich einfach Dienstleistungen, die die lokalen Bedürfnisse gut befriedigen: […]

  14. […] Many insightful posts examine the reasons for Backfence’s demise. I have no inside knowledge about Backfence, and nothing to add to that discussion. But start-ups that fail tend to do so for essentially the same reason: they run out of money before they learn the lessons that can put them on the path to profitability. […]

  15. […] — pomoblog. An encouraging prescription as long as Google and AP don’t get the idea that they can aggregate content from citizen bloggers without help from regional news organizations. […]

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