Readers Comment on BackFence Downsizing

The departure of BackFence CEO Susan DeFife amid the layoff of 12 of 18 staff members brought in a flood of comments to my personal site. Here’s a selective summary.

Dick Larkin, the Small Business Commando, kicked off the comments, noting that: “This just goes to show that even great local content sites need a solid sales and revenue plan. Viva local sales!”

Local sales is also the focus of comments from EarlPearl, the SEORefugee from the D.C. area, who said he had met with a BackFence sales guy. “They never gave me a feel for traffic. So how could they justify advertising rates?” he asks.

“Rxforbiz” said he/she “never understood how BackFence planned to make money (which is ultimately what publishing is about. Editorial is simply there to stop the ads bumping into each other.) How was BackFence ever going to sell advertising? No plan, no experience. They recently bragged about having 500 advertisers in ALL their properties. The average Big City paper has 5,000 advertisers! The minute they did start making money  if they ever did  their local monopoly newspapers (The San Jose Mercury News, The Washington Post, etc.) could have taken all their advertisers away overnight simply by creating their own ‘BackFence’ sites, then offering BackFence advertisers free ads on that site, plus discounted ads in the main paper.”

Tish Gier, The Constant Observer, noted that: “The biggest problem in BackFence.com’s thinking was believing they could generate sufficient funds simply from advertising. Small-town/suburban hyperlocal paper publications often have to supplement their ad revenue stream by providing other services  or are parts of companies that have other revenue streams besides advertising. Even with the best content and great blogging personalities, sufficient online revenue is *seriously* difficult to generate  unless you’re a crafty splogger gaming the search engines, or participating in some other kind of click fraud. Odd how online revenue seems to work in favor of the dis-honest than the industrious.”

Meanwhile, Tom Britt, the broadband guy behind Indiana’s atFishers blog, noted that BackFence (and its investors) were guilty of having “drank the Kool-Aid. Local portals relying strictly on banner ads and some Google AdSense revenue will fail no matter how much money is thrown at them. A ‘community’ is smaller than 50,000 people. We already get enough news at this level from newspapers.”

But Hyperlocal Media‘s George Johnson, who also publishes Buffalo Rising, says it is all about scale  and not having a print component. “I think local media startups (excluding the aggregators and classified players) who want to scale not just to other markets but in their own and think they can do it exclusively online are kidding themselves.”

But There’s No Excuse for Being Boring

Michael Wood-Lewis, who does Burlington’s Front Porch Forum focuses on the quality of the journalism (as do I). “Perhaps BackFence isn’t aiming at the right target. Stories that appeal to an audience across a 50,000 to 100,000 population (e.g., ‘city council enacts smoking ban in restaurants’) may best be reported by professional journalist[s], as has been the case for generations, and supplemented by bloggers. Stories that appeal to residents of one neighborhood (e.g., ‘utility work closes Maple St. and Birch Ct. to through traffic this week’) are not of interest to the other 49,000 people in town. So, a BackFence model runs the risk of combining (A) stories with broad appeal that may not meet professional journalistic standards with (B) lots of micro-stories that are each only interesting to a very small slice of their readership.”

K. Paul Mallasch, who helped put Muncie, Indiana, on the map with his blog, also focuses on the journalism. “One of the things I think they’re missing in the equation is that you do need trained editorial staff. They’ve had a ‘hands-off’ approach since the beginning. It’s not working. The other, IMHO, is their clinging to ‘online-only.’ There’s still a little money to be made (in the short term anyway) from print sales. This could fund a small news operation (editor, reporter, sales, interns) for each of the regions, I believe. They’ve gone through a lot of funding so far.”

Taylor Walsh, the original community network guy, is the only one to actually defend BackFence, which he calls a “civil” place (unlike me, who thinks the writing on BackFence is just boring). But he notes that if it is personality that we care about, look no further than Baristanet in his old hometown of Montclair, N.J. “The lead on that site comes from the Baristas themselves, who carry personality and point of view up and down the avenue. I can’t tell how quickly the ad revenues are filling the Barista’s tip box, other than by observation there are more ads. And they are doing more cheap and useful things (a mashed map of coffee shops).

Meanwhile, community veteran Howard Owens, who now toils for Gatehouse Media, wonders, “Does this bode ill for the content model, or is it just poor execution by BackFence?”

Marketwatcher Frank Barnako asks “Who’s surprised?” Answered by Liz George from Baristanet: “Not Me.”