How Spot.Us Doubled Its Grant Money with Community-Focused Ads

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. (To read more about the genesis of the idea, check out this blog post.)

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 non-profit 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 non-profit 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!)

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 $6,000 to get us started. That was quickly distributed. 

> FreePress did two sponsorships with us for $1,000 each (we matched it with $2,000 from the Harnisch grant). 

> AARP gave us two sponsorships totaling out at of $4,500.

> The Aspen Institute, marketing the Knight Commission report on news and information needs of communities, did a sponsorship for $1,000 (also matched by a Harnisch grant).

> Clay Shirky
did a speaking gig and was given the chance to make a donation to the
non-profit 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 in line with Spot.Us’
mission — we subsidized it with $500.

And finally the biggie. HP Partners did a whopping $10,000 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
page views, 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).

Unexpected

The extra funds from Clay Shirky was unexpected. 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 instead 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 member’s 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 Sacramento Press
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.