What is the “secret sauce” of online news sustainability?

Michele McLellan, then a fellow at the Reynolds School of Journalism at the University of Missouri, presented this research at a 2013 Community Journalism Executive Training summarized below. 

“I think I’m going to be a little ‘tough love’ with you guys,” she said. “The love piece is that you folks are just doing amazing work and the passion and energy you put into your work is something I’m in awe of. The tough part is: More.  Faster. You just gotta do more faster. If you’re in your comfort zone, you’re not in the right place.”

“The bad news is that I don’t have the recipe for the secret sauce. But we have discovered some of the ingredients.” Her study funded by the Knight Foundation, looked at 18 nonprofit news sites and what they’re doing right. McLellan added data on 50 additional 50 sites.

“What are the organizations that are making the most progress doing? Which of those are things you might want to try? I’m not talking about ‘if you do a lot of events you’ll be as rich as Texas Tribune’, but the practices that underlie that,” and help individual news startups that are growing how to identify ways to grow.

“The sector is growing and revenue is growing, but there’s less dependence on foundation. Two years ago, two-thirds of the money came from foundations, and now it’s half,” said McLellan. But the sector is still very fragile, and leaders are driving the averages; a few very successful standouts drag up the overall gains in revenue.

There are a few lessons we can take from high performers, said McLellan. The number one common factor among the successful sites is simple: they treat it like a business. “You’ve gotta achieve some discipline, even if you’re really small, and even if you’re only one person. You have to achieve balance in how you allocate your resources — if all of it’s going into editorial, you can change.”

It’s critical for organizations to maintain a surplus, McLellan said: “If you have that, when the really cool project comes along, you can go for it.” Customer relationships are really important too, she said. “I know a lot of you don’t want to hear about ProPublica, because they have a lot of money, they’re the unicorn. But if you talk with Dick Tofel who runs ProPublica, he’ll tell you ‘I’m running a small business. I have 50 employees.”

Apart from treating news startups like a business, McLellan said organizations must rein in editorial costs. Typical organizations spend two-thirds of their budget on editorial. “That’s unlikely to be sustainable,” she says. “Content strategy means setting priorities.”

Ruffin Prevost of Yellowstone Gate talked about setting those priorities. “It’s easy when you cover a geography the size of Delaware and Connecticut combined to pull back from a few things. Once I realized that no one really cared if I covered everything everybody else covered, it allowed me to focus on the content that worked.”

“What if we did one less story in a day,” said McLellan. “What would it hurt?”  The resources spent on those could be reallocated to activities that make the business more sustainable. It takes a shift in mindset, one that moves people from thinking of themselves only as journalists, and instead think of themselves as community publishers. Teresa at MyEdmondsNews.com said, “I used to pay so much attention to the content, and to the writing, and to all the things that I love, but eventually I realized that I had to keep sustainability at the top of my mind, and that changed how I approached everything I do.”

Foundation funding isn’t the answer, says McLellan. “Nobody I talk to at a foundation says that [grants] are a long-term source of revenue.” Sites like MinnPost are down to 20% of revenue from grants, says McLellan. Investigative sites that don’t feature daily content and instead publish investigative packages every month or six weeks have bigger challenges, says McLellan.

Nonprofit sites also fail to do something simple: ask people for money. Sites like Texas Tribune, during their coverage of the Wendy Davis filibuster, consistently asked people following their coverage online and via Twitter, to make a donation.

Many independent news site publishers write off examples that come from organizations like Texas Tribune and ProPublica, since it seems as if they have so much money that what works for them won’t work for a smaller organization. But McLellan said publishers do this at their peril. The basics of what Texas Tribune is doing — namely, really owning that they need to really own the idea that they have to find new ways to connect to revenue — is something that’s true for an organization of any size.”

Audience surveys are “a no-brainer,” said McLellan. “It’s not expensive to field a reader survey — you can spend a lot of money on it, but you don’t have to.” Both Texas Tribune and MinnPost can document and tell a good story about the demographics of their audience, and that works with advertisers and underwriters.

Rusty Coats, who worked at a media research company, said that survey results that project information out to an entire market are usually just speculation, but an onsite survey of any kind gives you insight into your audience that you won’t get if you don’t ask.

Lastly, said McLellan, “have an engagement strategy. Don’t be like the classic newspaper person who just assumes the news lands on the doorstop and that’s it. Your audience is an asset, one that you have to build, whether that’s a newsletter, events, membership, or online interaction.”