The rise of digital advertising has been tough on local news.
Not only have legacy operations, like local newspapers, struggled to survive in the era of Craigslist, Google and Facebook, digital ones haven’t found it easy to gain a perch. Most recently, the owner of Gothamist and DNAinfo shut down the sites in early November after its journalists unionized, with the owner citing unprofitability.
Patch, in contrast, is in the midst of executing a turnaround and has been profitable for the past 15 months. It now serves 1,200 communities with a staff of 148.
For the past three years, the company has been owned by private equity firm Hale Global, which bought Patch from AOL in early 2014 after the company laid off a third of its staff.
Has Patch finally figured out the local model?
“We think we are a long way from having totally cracked the code on local,” said CEO and executive editor Warren St. John. “It’s a super challenging environment. We are encouraged with our progress, but not remotely satisfied.”
Shortly after the acquisition, Patch’s user traffic cratered. Instead of building the site, it had to invest time and resources in migrating all data from AOL’s tech.
But by the second year, Patch had started to take advantage of techniques that worked, such as local news notifications and alerts. Alerts now account for 20% of Patch’s total traffic. In year three, Patch added social media listening and distribution, expanded its newsroom and decided to enter new markets.
“We do [expansions] very differently than the old way, which was to make a very big bet,” St. John said. “Patch would go to Boson with 80 local editors and 80 local Patches. Now, we start small and try to grow into something that works.”
That may mean it enters a new metro area with seven Patches, or a smaller city, like St. John’s hometown of Birmingham, Ala., with just two.
St. John talked to AdExchanger about how Patch is trying to make the local news model work.
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