Tech-Heavy Area Leads Way Into Local Space

Here in Microsoft country, it should perhaps come as no surprise that media companies are trying innovative ways to coax revenue from the Web.

Seattle is, after all, home to the first newspaper in the country to go completely digital. When the Hearst Corporation pulled the plug on the flailing print edition of the Seattle Post-Intelligencer in March 2009, it left the Web site, SeattlePI.com, standing.

That news site now competes with a lively mix of bloggers, community news sites and the usual cacophony of newspaper, television and radio Web sites in the country’s 13^th largest media market.

“Seattle has always been very hot in terms of hyperlocal media,” said Larry Shaw, vice president of research at media consultants Borrell Associates. Now, he added, some of the market’s big players are trying to make money from it.

More than $213 million in total local online ad dollars are at stake here. That number is expected to surge 75% -- to $372 million -- by 2015.

This media market is home to 4.7 million people, who enjoy a median household income higher than the nation’s as a whole. The population historically ranks in the top five for Internet use, according to Shaw.

The Post-Intelligencer’s valiant effort to forge on as a Web site with just 20 editorial staffers, down from the 160 or so it had when it published on paper, is no longer the latest news here.

Observers note with surprised respect that the site has been able to hold onto its following by supplementing a shrunken reporting staff with offerings from local bloggers. According to The Media Audit, which tracks visits to Web sites, 14.3% of Seattle-Tacoma adults visited SeattlePI.com during the March-April survey month, up from 11.9% six months before.

But that still puts it behind the Web site for The Seattle Times (26.4%) and sites for three local television stations, KING 5 (26.7%), KOMO 4 (19.7%) and KIRO 7 (18.2%).

And some of those sites are now unveiling their own groundbreaking efforts.

The Seattle Times (Seattletimes.com), controlled by the Blethen family, has joined with Belo Corp.’s King5.com in a plan to tap the advertising potential of some of the area’s healthy, award-winning blogs.

In 2009, the Times won a Knight Foundation grant to build a partnership with five hyperlocal blogs in the area. The Times now links to three dozen local blogs, said the paper’s executive editor David Boardman, and this year it won an Associated Press Managing Editors (APME) award for innovation.

Among the paper’s partner sites are such established bloggers as Westseattleblog.com, Capitolhillseattle.com and the award-winning Myballard.com. “They’re independent sites,” Boardman said. “We don’t control them but we ultimately control who can be in the network.

“We don’t edit their blogs,” he said, but a Times staffer monitors them and puts on notice those whose postings don’t meet the network’s standards. So far, the paper has had to part ways with only one, he said.

It is the advertising potential of that blog network that the newspaper and television station hope to start mining in coming weeks. Under the BeLocal network, the newspaper and television station’s sizeable ad sales forces will try to sell their advertisers space on the blogs as well, giving regional advertisers an effective way to drill down to desired neighborhoods, King 5 director of digital media Mark Briggs said.

Ads will be sold on a CPM (cost per thousand impressions) model, according to Briggs, with revenue to be shared by the blogs and the BeLocal partners. The TV and newspaper ad salesmen will be careful not to try to sell to advertisers already buying from the bloggers, Boardman added.

“I think it’s going to be a real win-win situation for everybody,” Briggs said. Local media remains a largely untapped opportunity, he said. And while it’s too soon to tell how hungry advertisers will be for this offering, “I think people are hoping that what is happening here is a precursor for the future.”

Over at KOMO 4’s Komonews.com, ad revenue for a stable of hyperlocal community sites recently added to the larger site is already showing double-digit compounded monthly growth, said Randa Minkarah, senior vice president of business development at Fisher Communications. The company owns the Seattle station and 19 others in Washington, California, Oregon and Idaho.

Fisher brought in DataSphere Technologies Inc., a Web tech and hyperlocal ad sales company based in Bellevue, Wash., last year and began launching the community sites on KOMO in August, according to Minkarah. KOMO now has 54 sites focusing on different Seattle-area neighborhoods.

Fisher also invested $1.5 million to become a minority shareholder in DataSphere, and added another 71 community sites at five of its other stations along the way.

DataSphere uses its technology to build community sites for television stations on its own servers and develops applications that let stations do things like post photos directly from mobile phones onto the Web sites, DataSphere CEO Satbir Khanuja said.