Analysis: The trials and tribulations of launching an online newspaper
Its exactly one year since Stewart Kirpatrick and his team launched the Caledonian Mercury, the online newspaper. Here is his report from online's frontline.
My account is called Situation Excellent. For those of you who are unfamiliar with French military history, this is a reference to a communique sent by the impressive Marshall Ferdinand Foch during the First Battle of the Marne in 1914.
It read thus: “Hard pressed on my right. My center is yielding. Situation excellent. I attack.”
The great man’s words resonated with me over the summer. I stared at our analytics, sweat beading on my brow, ice weasels fighting in my gut, trying to make the traffic graph swing upwards by sheer force of will. All the while, I was lulled by the gentle sound of grave dust swishing through our bank account. And a mantra tumbled through my brain like a kitten in a tumble dryer: “We need more copy. To get that, we need more advertising revenue. To get that, we need more readers. To get them, we need more copy.”
The Caley Merc’s first incarnation, the Mercurius Caledonius - Scotland’s first newspaper - closed after just three months in 1661. At times, every month the 2010 version made it beyond three felt like a First World War victory: incremental, slow and bought at a terrible price in blood.
I was a heartbeat away from fleeing to a secluded glen with a hundredweight of baked beans and a potato distilling kit. TS Eliot was wrong, April is not the cruellest month. That honour belongs to June, July and August 2010. They almost broke me.
And broke is something I know all about. Neither I nor my two fellow directors have made a penny out of the Caley Merc. Every penny of the many thousands of pounds of revenue we’ve made has been passed to our very patient writers. We checked our business plan with its various strategies. Things were not promising. For instance, Plan C was “work for food”.
How had it come to this? We’d had a fantastic start, with bags of traffic and publicity thanks to a blip in allmediascotland.com’s CMS leaking news of our launch early.
But I had forgotten one of the key principles behind the paper: online advertising is not enough. That’s why we talked about a print product so much when we launched The Caledonian Mercury.
The bottom line is that no publication’s online advertising reflects the value of the editorial beside it.
Let me explain. The basic measure of online advertising is called CPM (cost per thousand). A respectable cpm is £5. That means that for every thousand page views an advert gets, the publisher receives a fiver. So, to pay a columnist £150, their article needs to generate 30,000 page views. On every publication, the vast majority of pieces get nowhere near that. And, in the case of the Caley Merc, our most read story received 21,000 page views.
(In fact, to my mind, publishers should get together and point out to advertisers that, while random network ads, such as your Google ones, may be cheap, advertising beside quality content should carry a substantial premium to cover the cost of creating it.)
If I had a penny for every time I’d heard a potential advertiser enthuse about our innovative, exciting publication but then not actually put their hand in their pocket, I’d have a lot more than our advertising revenue for June.
However, with the great Foch’s words shining before us, we kept at it. And something marvellous happened: we got a nice slug of revenue (which, of course, was given straight to the writers). And our traffic did, finally, start to climb and, reaching some 100,000 readers in November - an impressive number for a publication that did not exist a year ago.
We've also had some great industry recognition, winning the NUJ Regional Press Award for Multimedia Publisher of the Year and coming joint second with the Guardian in the Newspaper Awards 'Best Digital Service' category.
2011 promises great opportunities to build on our large audience because, as well as chasing online ads, we will mine other revenue streams. The market has changed and there are ways of connecting with the reader that do not involve advertisers. I still don’t believe people will pay for content on the web. However, they will pay for podcasts, apps and newsletters.
Watch this space.