Which US-based newspaper website has become so popular that it received over 140,000 user comments on one day this week? One would naturally assume, The New York Times or USA Today, but no, the distinction goes to Topix.net. Topix is a publication that does not have a newsroom, has never printed a paper version, and claims more web visitors than the Washington Post.
Topix, like YahooNews or GoogleNews, serves as an online news aggregator, collecting news from over 50,000 sources. But unlike its larger web colleagues, Topix is also a news community, bringing forums and discussion groups to every US town and city. Topix is the very definition of hyper-local; users simply enter their zip code and the news relevant to them is only a click away. The site also works with national and local news publishers in the US to help them engage their communities while simultaneously improving their revenue streams through classified publishing platforms.
This amalgamation of news aggregator, online newspaper and community website has taken American by storm, and Topix is now a hit. In July 2008, comScore Media Metrix ranked Topix.net the third largest newspaper site in the United States, right behind the New York Times and USA Today. With success like this, it seems that Topix and other news aggregators are here to stay. But what do sites like Topix mean for traditional publishers?
The Editors Weblog spoke to Chris Tolles, CEO of Topix, to find out his view on the relationship between newspapers and news aggregators and what newspapers can learn from aggregator methodology.
Different value propositions
Whereas some newspaper companies have been critical of news aggregators, which the newspapers accuse of "stealing" content, Tolles is positive about the relationship between newspapers and sites such as his. He views them as "different value propositions", which in this case means that newspapers provide the news while Topix provides the platform on which readers discuss the news. Because of this added value, Topix, according to Tolles, "work with, not against local journalistic efforts." He continues, "Topix harnesses the power of the population in places that newspapers can't realistically cover", keenly pointing out that by browsing Topix-hosted forums, journalists at many papers find new stories and new sources they would not have discovered otherwise.
Tolles describes Topix as "a place to engage and participate around local news and events." It's main innovation, impossible before the emergence of the Internet, is that it furnishes newspapers with a space where their readers can congregate around general subject matter and individual articles. In this sense, Tolles views Topix as a "great partner to newspapers"; not only does it provide the discussion platform, but it opens up a newspaper's content to a new audience which may have not previously considered reading the online or print edition.
Targeted content = targeted advertising
One of the areas in which Topix has blazed a trail and surprised many in the media industry is in monetising local content, the $50,000 question in today's newspaper market. Topix's targeted, local content has proved very attractive to advertisers, both local and national. Tolles reveals, "We are able to sell advertising against local audiences for national advertisers as well as being able to use our own targeting algorithms for Google's Ad Sense. We get a large uplift on the CPM rates, about ten times what newspapers not using Topix are able to get." To grow its targeted advertising success even more, Topix is increasing its direct sales staff.
Another interesting feature of the Topix business model is that all the technology is done in-house. "We have built everything used on Topix at Topix," says Tolles. Therefore, everything that is built and designed for the site is done solely with Topix in mind; there is no content management or publishing system that has to be bolted on and squeezed to fit the site's working practises or production needs. Tolles reports that "The localization and categorization technology is patent pending and ours, as is the forum platform, search technology and everything down to the open source web components like our web server and OS."
Topix is an interesting player in the news provider market and there are clearly lessons to be learnt from its scalable model and innovation. Furthermore, the success that Topix enjoys is a stark lesson to the whole industry. But still, everything hasn't been perfect. Looking back, Tolles says he "would have hired sales people earlier, and I would have focused on local (over general categories) from the get go. I would also have worked with others in the industry to give advertisers a clearer value proposition around connecting to local earlier."
As for succeeding in the crowded media space, Tolles suggests the Topix strategy for others, concluding, "I would urge any news organization starting today to figure out what they provide their audience, and then focus on that relentlessly. We did that with participation, but there are other ways to succeed..."