Cory Bergman

My wife Kate Bergman and I co-founded a network of Seattle neighborhood news sites in late 2007 called Next Door Media.  Today, the 10 sites along with our regional guide bring in 230,000 unduplicated unique users a month with a combined social media following of nearly 40,000 fans and followers — at a much lower cost per audience than the Patch model.

One of our key learnings from creating the network — which I presented at the Online News Association conference last week — is something I call “economies of proximity.”  It’s a different spin on economies of scale.  WalMart is the classic example of scale: as it grew, it was able to negotiate lower per-unit pricing from suppliers and achieve cost efficiencies in distribution. 

For Next Door Media, we’ve noticed cost efficiencies in proximity.  All of our sites are right next door to each other in the North Seattle region, and neighborhoods aren’t mutually-exclusive.  You live in one, shop in another and commute through yet another.  When something big or particularly interesting happens in a nearby neighborhood, you want to hear about it.  Your geographic sphere of interest flexes beyond your neighborhood and your zip code.

So we share coverage, marketing and advertising across the sites in flexible, proximity-driven combinations.  A story that happens on the border of one neighborhood is also posted on other neighborhood site.  A regional story is posted across all ten.  That reduces the cost of coverage by amortizing the effort of creating a story across multiple nearby sites. 

Hence, economies of proximity.

We also share story tips, and nearby editors help each other during breaking news and vacations.  They also retweet each other, and occasionally cross-promote on Facebook (which helps explain why Next Door Media has one of the largest combined social media following for any Seattle media organization.)  All the sites prominently cross-link each other across the top in order of proximity — as well as cross-link the most interesting stories — which consistently drives more network traffic than Google or even our relationship with the Seattle Times.

The economies of proximity continue on the sales front.  Many of our advertisers buy more than one site at a time, reducing the cost of sales.  After all, businesses attract customers at varying levels of geographic reach.  A neighborhood coffee hangout may have a half-mile reach, but a furniture store may attract customers five miles away.  Our advertising clients can buy custom geographies by buying different combinations of sites, targeting their customers exactly where they live and work.  And larger, citywide advertisers are increasingly attracted to our network because of its overall reach.

At the end of the day, proximity reduces costs and opens the door to larger sales opportunities.  If the network were to grow to a new geography — another “cluster” of next door sites with a regional guide site — we’d also begin to experience economies of scale, especially in product development.  But that’s another discussion for another time.