As publishers debate whether hyperlocal websites will be the news organizations of the future, GrowthSpur is preparing for that eventuality.

The startup, which was co-conceived by Backfence founder Mark Potts and a cast of industry all-stars that includes super-blogger Jeff Jarvis, is preparing for the new media world. It’s one in which armies of neighborhood bloggers, local events sites, community discussion forums and small-town print and online newspaper publishers will fill the gap created by the passing of media giants. It’s building a back-end business system that it hopes will enable these small publishers to quickly monetize their businesses while building a network that multiplies opportunity for every member.

The company, which was announced less than two weeks ago, is targeting a US local advertising market estimated at $25 billion that has been devilishly difficult for publishers to monetize.

Second Try

GrowthSpur CEO Mark Potts

CEO Potts has been here before. Backfence was one of the earliest and most notable experiments in citizen journalism. The venture raised $3 million and expanded to 13 local communities before collapsing in 2007. One problem was that Backfence was ahead of its time. With GrowthSpur, Potts thinks his team has got the timing right. The influx of thousands of journalists who have been laid off over the past two years has created a petri dish for online innovation. But it’s also created a gap: few of those journalists know the first thing about selling advertising.

“People are starting to build replacements for newspapers and we plan to support them,” he says. “We think a local site in a decent-sized town should bring in $100,000 to $200,000 a year.”

How does Potts arrive at that figure when most small-town newspapers struggle just to make a small profit? The GrowthSpur founders think that best-of-breed sales tactics, combined with a robust network of regional advertising outlets, can make the difference.

QuickBooks For Community Media

Media blogger Jeff Jarvis will advise GrowthSpur

The startup is building a technology platform and local network that fledgling publishers can easily tap to generate and manage revenue. It’s kind of a QuickBooks for community publishers, Potts says. The platform, which is still in development, will give publishers the wherewithal to manage everything from ad serving to invoicing while connected them to a network of nearby sites where customers can also place advertising.

That feature is one of GrowthSpur’s more intriguing ideas. Potts’ Backfence experience taught him that many local businesses want to advertise in a wider geographic radius than that provided by their local newspaper. Most community publishers lack the connections or infrastructure to place their client’s ads outside of the outlets they control. The result is a frustrating experience for advertisers and lost revenue for the publishers.

In the GrowthSpur model, the more publishers who adopt the platform, the more powerful the ad network. “The idea is that we can get you on the local mommy blog, the food blog and the site in the next town,” he says.

Sticking to Its Knitting

GrowthSpur is being driven by a small but elite group of publishing veterans. The venture is currently self-funded but is entertaining outside financing. GrowthSpur doesn’t have pretensions of being all things to all publishers. It’s strictly a sales and business management engine with no content management or editorial production features. In addition to technology, the company will bundle advisory services and deliver enhancements like do-it-yourself ad creation and search engine optimization through partnerships. The venture will make money through revenues shares. There will be no upfront costs to the community publishers and no payments to GrowthSpur unless revenue is coming in.

The size of the market opportunity naturally begs the question of why existing newspaper companies haven’t done more to take advantage of it.  Potts response is simple: “A lot of the big metro dailies haven’t even tried,” he says. “It’s too inefficient for them to sell below about a $10,000 campaign level. The money’s out there but many of big guys haven’t tried to get it.”

GrowthSpur is going to try. The service formally launches early next year, but the company is already fielding an “enormous” number of inquiries and has put some basic tools and services in place, Potts says. Although principals like Potts and Jarvis have been vocal critics of the newspaper establishment, GrowthSpur is born of a sense of optimism.

“This is an incredible time for journalism,” Potts says. “We’re going to see a fascinating multiplication of voices.”

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This entry was posted on Wednesday, August 12th, 2009 at 6:08 am and is filed under Facebook, Fake News, Google, Hyper-local, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.