Stick a (temporary) fork in this idea

September 11, 2009

I’ve been spending some time thinking about business ideas around local media in the Portland market.  This is an area that I’m keenly interested in.

I would love to figure out a way to build a meaningful business around a network of hyper-local news sites (e.g., ThePortlander.com) and top Portland focused blogs (e.g., OurPDX.com).  There is a lot of great work going on.  Unfortunately, it’s difficult for me to figure out how to build a business around it. There just isn’t enough traffic.

Here is a simplified version of what I came up with.  At this point, I think it’s a “pass.”

High level model assumptions:

  • Top 20 Portland blogs and local news sites = 100,000 unique users.  In reality, it’s probably less
  • Each unique user generates 10 page views per month
  • There are two ad positions on each page selling at an average rate of a $10 CPM
  • 75% of the inventory is sold out
  • Bloggers/journalists retain 70% of revenue

Based on these assumptions:

  • Each of the 20 network participants would take home $525 per month
  • The advertising network operator would generate $4,500 per month in gross revenue

I’ll will revisit these assumptions over time.  For now, I’m sticking a fork in this idea.

By the way, the model looks very different in larger markets (e.g., NYC, LA, Chicago).

Thanks Rick Turoczy for your thoughts on this.

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2 Responses to “Stick a (temporary) fork in this idea”

  1. Einar Says:

    Interesting analysis..I think the $10 CPM might still be quite high..

  2. Tom Turnbull Says:

    I was using $10 because Willamette Week claims to be selling at $15. “Local” is attractive to advertisers (far more valuable than many other advertising venues). That said, a more conservative CPM might be $5-$7.50. A lower CPM just makes the conclusion more solid.


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