How I turned 20k into 48k

There are many things that excite me about Spot.Us. One in particular, which I believe is part of our pathway to sustainability is “community-focused sponsorship” (CFS). It is the main thrust of my fellowship at the Reynolds Journalism Institute. My evolving view of advertising is becoming a passionate topic.

In some respects CFS gave me a needed shot of adrenaline into the Spot.Us project. If I’m not pushing boundaries and trying something new, I get bored. To date I still know of no other media entity trying anything exactly like it.

So what is community-focused sponsorship?
The quick version: We sell the sponsoring organization a form of engagement on our site (a quiz, survey, etc). Anyone who engages with the sponsor gets a slice of our sponsorship budget. They decide where the funds go. The sponsor gets the anonymized information from community members. Each side creates value for the other. Give it a whirl thanks to HP Partners PCRush.com.

When I first came up with the idea I approached the Harnisch Foundation for support. This is a foundation that considers news and information, among others, a priority. Bless their journalistic hearts. More-over they are interested in finding new models of sustainability. Bless their bold hearts.

When I told them about community-focused sponsorship I made a bold claim that, in truth, I wasn’t 100 percent sure I could deliver on. I told them I could double the money they gave Spot.Us. I asked for $15,000. They gave us $20,000.

I’m happy to announce that not only did we double up on this larger figure, we’ve made $7,250, to spare – for a total of $47,250.

What happened to the money?

Some of it went toward developing the infrastructure of our model. We already had a credit system on Spot.Us, but the database structure needed to be cleaned and a user-interface created, etc. I’ll spare you the geekery so much as to say, it took some work, but it wasn’t insane thanks to early thinking about our credit system and the fine work of CTO Erik Sundelof.

Some was used to prime the pump. When we got our first sponsorship from FreePress.net, we added some of our funds to extend the sponsorship. We even created a few of our own surveys/quizzes.

A worst case scenario of the Harnisch grant would have been if we had not sold any sponsorships. In that case – this would be like many other grants that fund content – except instead of deciding how the funds would get spent internally, Spot.Us was looking to engage community members to make that decision. Still worth it in my humble opinion. Whereas most nonprofit news organizations that get grants decide internally (the publisher makes the call) how to spend the money – we looked to the community.

I triple-dog-dare any major nonprofit news organization to take a little of their foundation budget on the side and let the community vote on how it should be spent. (Oh no he didn’t just bust a triple-dog-dare!)

kitten_money.jpg

So how did we double up?

Talking about money is never easy for me. I am a natural salesperson, but when it comes down to the closing and to put up a dollar figure, I wince. As Brad Flora will attest, you need somebody who can make the sales-kill. I’m learning.

Somehow I’ve managed to sell a few sponsorships.

Mortgage Revolution (our first) gave us 6k to get us started. That was quickly distributed.

FreePress did two sponsorships with us for 1k each (we matched it with 2k from the Harnisch grant).

AARP gave us two sponsorships totaling out at of 4.5k.

The Aspen Institute, marketing the Knight Commission report on news and information needs of communities, did a sponsorship for 1k (also matched by Harnisch grant).

Clay Shirky did a speaking gig and was given the chance to make a donation to the nonprofit of his choice. He chose Spot.Us but instead of keeping the money, we distributed it via a sponsorship model.

We did a focused survey for Way Out West News. The bootstrapped operation gave us $250. Because they are a news organization starting out and the survey was inline with Spot.Us’ mission – we subsidized it with $500.

And finally the biggie. HP Partners did a whopping 10k sponsorship! The main partner benefactor of the sponsorship so far has been PCRush.com.

Total: $28,750 raised for journalism.
That is ALL money that goes towards reporting (spot.us did start taking a commission near the end – details below). These funds are unlocked a few dollars at a time by community members (roughly 5,600 acts of engagement). That’s 5,600 choices made by members of the public to support independent reporting. That might not be earth-shattering in pageviews, but in terms of engagement it’s huge. The average amount of time spent on a survey is 2:45 (much more valuable than a banner advert).

Total spent from the original Harnisch grant?
Six thousand on development and just over six thousand on sponsorships.

Remaining in the Harnisch budget – $8,000
(so I might be able to turn the original 20k into more).

Un-expected

The extra funds from Clay Shirky was un-expected. And I’ll be honest with you – there was a fair amount of time I considered not giving it away via community-focused sponsorship, but saving the money for an organizational rainy day (see my triple-dog-dare above).

Even without those funds Spot.Us still would have doubled-up its original investment from Harnisch.

When I spoke with Clay to get his permission to publicly distribute the funds he brought up an important point – that this model shouldn’t be about Push/Pull advertising. The sponsored engagement shouldn’t dangle the $5 above a community members head and make them jump through an annoying hoop. This, in the long run, will isolate Spot.Us from its community members. As we get larger and more corporate sponsors (fingers crossed) this will have to be something we really “push” back on – pardon the pun.

Since Clay didn’t have anything specific to sell, although you should buy his book, he let us do whatever we wanted with his sponsorship. Keeping in mind his suggestion – we asked folks for their view on objectivity in journalism. The idea is that we (a. genuinely wanted to know (b. this is a stimulating conversation/question and (c. once we got responses we could turn around and share their aggregated answers creating value back for the the collective community. See: “What the Spot.Us community thinks of objectivity in journalism.”

This final analysis became another selling point we did not anticipate. When I showed it to Free Press, now on their second sponsorship, they wanted a similar analysis. On that note: here’s what the Spot.Us community thinks of public media.

In both cases the analysis became a topic of discussion in the Twittersphere and beyond. Here were REAL numbers based on REAL responses from people who were asking and answering difficult questions. That it funded independent media was icing on the cake from the sponsors perspective.

In some respects we are doing what Pew Center for Journalism does – in a less scientific and faster way. As organizations will constantly need to keep a finger on the pulse of things – I think our sponsorship model will be a way they can do that and support journalism at the same time. (I also double-dog dare Pew to sponsor a survey on Spot.Us).

Obstacles

I still don’t have a sales team. It’s just me emailing people I meet or know.

I am confident this sponsorship model sells, but it doesn’t sell itself – somebody has to be there to make the phone calls and talk people through it.

What next?

Sell more sponsorships any way I can – without falling into the push/pull trap mentioned above. I think that would be a death-spiral.

We hope to create an affiliate model whereby anyone can sell a sponsorship and earn a commission. I am in talks with SacramentoPress to be the first to try this out. They have a sales team (mostly does local) and if they can sell a sponsorship – I will gladly let them keep a healthy commission.

I also believe that this sponsorship model could be a way to bring in foundation support outside of the traditional foundations that support journalism. It is great that Knight, MacArthur, Patterson, McCormick, Harnisch and other foundations support journalism (they should triple-dog dare their large grantees to let the community decide as well). I believe that by sponsoring quizzes and surveys about topics of interest to them – we can get more foundations interested in journalism. A foundation that supports child education might not ever see funding independent journalism as high on their priority list. At best they would support journalism about children’s education which while well-intentioned misses the point of independent reporting that reflects a community’s issues – instead of trying to dictate concerns.

Through this model that foundation could raise awareness on issues of child education, getting feedback and educating the public and at the same time support independent reporting. it would be icing on the cake.

Finally: We are taking steps on Spot.Us to emphasize the community-focused sponsorships and de-emphasize donating from an individuals own bank account. With our HP sponsorships there are more funds to distribute than we can with our current audience size. It may turn out to be a bad idea. We might realize that by de-emphasizing donations we are leaving money on the table. But so far people have reacted very positively and we should give people more opportunities to support reporting without having to whip out their wallet. We won’t remove the ability to donate funds – it just won’t be the first option people see. Rather – they will see the option to earn credits until all those options have been completed.

(UPDATE: The above paragraph turned into a failed experiment, people complained, we reversed).

UPDATE #2: Spot.Us has always said that commission would be “optional and transparent.” well, now it’s just transparent. We take 5 percent out of every community-focused sponsorship. Which means when you earn $5 in credits and you start to donate $4.71 goes to the pitch of your choice and .29 goes to Spot.Us. Hey, can you blame us? If so – let us know in the comments.

We also need to build out the types of engagements we can produce. We started by mimicking parts of a Google Form. We still can’t do everything Google Forms offers. But we will get there. There are tons of potential engagement opportunities we could build.

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