Spot.Us on the Edges of Revenue and Expansion

The beauty of starting something from scratch is the iterative and agile process I’ve talked about since before Spot.Us began. In this post I’m going to discuss two new developments at Spot.Us. One is an exciting feature and revenue stream. The other is in relation to our expansion into new regions.

For almost two years now, Spot.Us has been growing and evolving. I’m very happy to say that the last month has possibly been the most exciting since our launch. We grew almost 30 percent in terms of users. Even more exciting is that the technology behind Spot.Us is starting to show real signs of scale between our expansion into Seattle and other regions, which I’ll describe below.

So what’s happened in the last month?

Community Centered Advertising

I’m normally good about breaking news of Spot.Us on my personal blog and Idea Lab. But last month we unleashed a feature somewhat quietly, using just an email to registered members of Spot.Us (sign up for our newsletters here). It was later covered in Poynter.

We call it “Community Centered Advertising.” Before I go off on a rant about it, let me ask long time readers, friends, acquaintances, lovers of journalism or revenue geeks to try the following demonstration.

In less than two minutes and five clicks you can help an independent reporter (and Spot.Us).

1. Go to Spot.Us and login or register.
2. Click “Earn Credits” in the header navigation.
3. Take a simple and short survey.
4. Submit the survey and earn $5. Then you’ll be taken to a page with all our active pitches.
5. Select the pitch of your choice (this is the fun part), click “Apply Credits,” and confirm that decision.

Bill Mitchel from Poynter wrote about it and summed it up: “In some ways, it seems like a no-brainer: Encourage consumer engagement with advertising by giving users a stake in deciding how the revenue gets spent … Spot.Us itself is an experiment in transparency and control of money for news. This is just a matter of applying it to advertising.”

What we are doing is making it very transparent how advertising money gets spent on Spot.Us. It’s so transparent that we give up ownership of that decision to members of the public who engage with the advertisement. Spot.Us is sponsoring this current campaign but we already have our next sponsor lined up. (Interested in being a sponsor? Contact info@spot.us).

Is It Working?

1. The numbers don’t lie: Our engagement percentages went up drastically. When fundraising online you can expect a certain amount of attrition. People will view your site and not engage. It’s a big mental burden to reach for your wallet even if it’s not a financial burden. Folks like Beth Kanter have been talking about it for years; there is an engagement
ladder and people have to start from the bottom. Well, now the bottom level of engagement on Spot.Us can still support stories financially at no cost to the user. As expected, user engagement went up dramatically — it quadrupled, in fact.

2. The numbers got better: We also saw something that I didn’t expect to happen — we got more financial contributions on Spot.Us as well. I figured with the “Earn Credits” option nobody would donate their own money. To the contrary, many did. The $5 in credits was an appetizer.

3. The challenges for this revenue stream: I feel confident that this model is ethically sound in that the advertising won’t influence the content — at least, no more than could be argued advertising impacts content for any publication. That said, we want sponsorships that engage people in a positive way. Wouldn’t it be great if people were engaging with the advertisement not just because they wanted the credits, but because it served their information needs somehow? Still, we are a non-profit startup. Unlike the Bay Citizen which had $8.7 million at their launch, we have just me to try and sell sponsorships on top of everything else. So challenge  number one is finding a way to sell sponsorships quick and easy. To do this we need a broader appeal. Which brings us to the next part of
this update.

Spot.Us Creeping into Your Town (Lessons on Assumptions)

Today we are publishing a pitch that is in collaboration with both The Uptake
and MinnPost.com, two of Minnesota’s finest nonprofit news organizations. 

There have been two aspects of Spot.Us that, since launching, I realize have not worked the way I envisioned. One was around the idea of distributing content. Most news organizations are adverse to running content that isn’t 100 percent produced by them or produced by somebody within the mainstream media club. Hell, even the larger nonprofits have trouble distributing their content to the AP. It’s a challenge and we’ve gotten around it by partnering with news organizations from the start of a project. That was a shift from my original vision.

It’s time now to question my original vision of expansion, and this creep into Minnesota is a perfect example. The pitch we’re publishing today is to cover the gubernatorial race via video from The Uptake coupled with reporting from MinnPost. You couldn’t find two better partners to do this. Meanwhile, they have large enough audiences such that if 10 percent or so take action on “community centered advertising” we’d start fundraising large amounts. Even better, it wouldn’t divert from their regular fundraising efforts. If anything, it might bolster it by giving potential future donors an easy route in.

But this is the only pitch we have in the Minnesota region (more are welcome — just click “Start a Story.”)

Meanwhile, over in Seattle, we’ve funded two stories and a third is close. After that’s done, I’m going to have to start emailing around to convince reporters to create a pitch. Not an impossible task, but a drain nonetheless.

At the same time, I’m getting pitches from places like Portland Oregon, Sacramento California, Vermont, Maine, etc. Even as far away as Guatemala (international is a whole other can of worms). These locations don’t necessarily merit their own network. I don’t suspect I could get a steady stream of pitches from Maine. But the pitch that has come my way is pretty good. It is local and covers civic issues. I certainly wouldn’t want that to die on the vine because I couldn’t find three other Maine reporters to create sister pitches.

From the start, I thought Spot.Us would expand ala Craigslist: Pick locations, create sub-domains and let people aggregate around them. Certainly San Francisco and Los Angeles have worked like this. We always have about five active pitches in both locations at any given time. Seattle however, might not be that way. I fear I’m viewed as an outsider — perhaps even as “competition.” And perhaps outside of The Uptake and MinnPost.com, I will have no luck in Minnesota either (I hope I’m wrong).

But that shouldn’t stop me from expanding. Especially not when I am getting very solid pitches from around the country.

Which is to say: Spot.Us might need a new organizing principle for expanding. Maybe the network or “region” shouldn’t be a factor at all; maybe we will expand to wherever a decent pitch comes calling, be it in New York or Sante Fe. Making this shift would undoubtedly raise more questions, such as how we decide what pitches to take, etc. But I am prepared to have that conversation.

What do you think?