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A startup conceived at Yale University has a business model based on a college campus bulletin board, and is betting it can save newspapers from extinction.
PaperG Inc. raised nearly $400,000 in seed capital late last year from a list of angel investors that includes former Boston Globe vice president Stephen Taylor, and Washingtonpost.Newsweek Interactive co-founder Mark Potts.
PaperG’s Flyerboard software places a virtual bulletin board widget on news pages. Much like the board on the quad, the Flyerboard widget lives in a permanent location and can display multiple ads at a time. Media clients so far include the Boston Globe, Metro International, The Weekly Dig and MinnPost.com.
The idea started with a community events widget for local blogs, based on a virtual bulletin board used by students at Yale, said co-founder Victor Wong. “We saw a large uptick in local ad dollars being spent on these local blogs to post local ads,” he said. Likewise, the strategy has multiplied the ad rates news sites can charge for space that otherwise might be sold as a remnant, Wong said. Anything websites can’t sell as a premium ad typically goes out through ad networks at $1 to $2 per thousand impressions. Flyerboard space containing multiple small ads typically sells for $7 to $10 per thousand impressions, Wong said.
It’s an incremental improvement to the bottom line, but it adds to a rising tide that may lead newspapers back to profitability, said Taylor, the former Globe executive who in the 1990s co-led with Lincoln Millstein the launch of the paper’s website, Boston.com. Taylor met PaperG’s founders at Yale, where he is a School of Management lecturer.
“Some of the better web operations, their revenues are growing steadily,” said Taylor, who is a member of, and now manages investments for, the Taylor family, which owned and operated the Globe from its 1872 founding until its 1993 sale to the New York Times Co. for $1 billion. “While the (online ad) revenue totals are far less than the print totals, they’re growing to the point where they start to become meaningful,” he said.
Spending on print newspaper ads has dropped continuously since 2005, according to the Newspaper Association of America. But at $3.2 billion in 2007, online ads were a mere sliver of U.S. newspapers’ total ad revenue, which hit $42.2 billion that year.
Wong said PaperG has increased value in segments of the paper traditionally unfriendly to advertising, he added. Premium buyers tend to shy away from pages that might display news of fires or crime. But the local insurance agent is happy to get that space. “Local content online has been mostly served by traditional ad networks,” Wong said. “No one really has been able to bring in the local ad dollars for them.”
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