Ultra-Niche, High-Value News

A strategy for creating a profitable ad-supported news site that isn't used often, but has been used successfully by several small online publishers and is gradually becoming more popular, is to concentrate on a tiny news niche, one that may attract only a few thousand or even a few hundred readers whose attention is extremely valuable to a similarly limited set of advertisers.

This Web site business model assumes that you have specialized knowledge of a particular industry and are willing and able to cover that industry in more depth than anyone else. An example might be a site that reports on government building regulations that affect the construction of high-rise office towers not when those regulations are enacted, but when they are first proposed. This site would be promoted, on the reader side, only to decision makers in national and global construction firms. For specialty construction equipment manufacturers, this is a golden audience; cost per thousand readers is not a valid way to set ad rates for it. A maker of (for example) specialized tower cranes that sell for $500,000 or more may be willing to pay thousands of dollars per month to sponsor your site even if your average daily readership is measured only in the hundreds. Accumulate five sponsors, each willing to pay $5,000 per month for a link from your main page to their sites, and as long as you keep your staff small and your quality high, you will have no trouble earning a decent living.

This is not something just anyone can do. To pull it off you must have name recognition in your field among both readers and prospective sponsors. If that field is international-scale construction, a test might be whether the president of Caterpillar will take your calls. If so and if you can get him and a few other major construction equipment vendors to sponsor your site you will be able to make this work.

What if you're not a noted expert in a field like construction law or another one that might lend itself to a "premium audience" site, but are a skilled, Web-hip promoter and entrepreneur? Fine. Accumulate a stable of experts in different fields and make a series of premium sites. You do the sales and marketing, and provide hosting and business services, while your experts provide the editorial content. Your experts aren't going to work for free or purely on percentage. No one who has a strong reputation in a high-stakes field needs to take that kind of risk, so you must take the need to pay substantial authors' fees into account when you set up your business plan. At least, by running multiple sites, you will spread your risk. Allowing a one-year "make or break" cycle for each site is probably prudent. If you have not been able to locate appropriate sponsors for an "expert site" after a year of trying, that site might as well be written off. But if you set your margins correctly and keep your expenses under control, you don't need every site you create to become profitable. Ideally, you should allow for a site failure rate as high as 80% when you first set up this business. This is a pessimistic view, but if you allow for the worst and get the best, it is better than the other way around.