If you want to be in the news business and don’t have an online strategy, you ought to have your head examined—and your cofﬁn sized. Unless you’re John Garrett. The 37-year-old Texan publishes 13 editions of hyperlocal Community Impact Newspaper, delivered free each month to 855,000 homes in the Austin, Houston and Dallas areas. (Daily circulation at both the Houston Chronicle and the Dallas Morning News is roughly 400,000.) And it makes money: It pulled in an estimated $1.5 million in operating income in 2012 on advertising revenue of $10 million. But less than 5 percent of that business comes from its website.
Is Garrett holed up in his own Alamo, hoping to make a heroic, if desperate, last stand for print? Media consultancy ZenithOptimedia ﬁgures that by 2015 spending on internet-based ad campaigns will hit 23 percent of the $182 billion US market, outstripping what’s spent on both newspapers and magazines. In fact, Garrett is no Luddite and has had a website since 2005, when he launched the business with his wife, Jennifer.
“I think about online a lot,” he says. “But our focus is local content, and that’s best monetised via print. For mom-and-pop businesses there’s just not many other ways to get exposure to the community they live in. When local content is better monetised digitally, we’ll be ready.”
Back in 2005, while advertising director for the Austin Business Journal, Garrett was shocked that no local publication was covering the construction of a huge toll road. He saw an opportunity for some kind of neighbourhood news source. “It doesn’t matter who you talk to,” he says, “everybody is interested in roads and taxes.”
But what sort of media vehicle—and how to get it out there? He wasn’t interested in starting a blog, and Austinites were unlikely to go searching for civic news.
A tabloid-size paper with full-colour photos, the Business Journal was distributed by mail weekly to subscribers who pay about a buck an issue. Garrett copied the look and feel of the paper but wouldn’t have subscribers. He decided the way to build a true community paper was to mail it to every single home in the area and charge nothing for it. “It’s ‘push’ technology called the US Postal Service,” he laughs.
To start, he and Jennifer borrowed $40,000 on a low-interest credit card. Because he was an ad-sales guy and not a journalist or wordsmith, Garrett tracked down someone whose verbal skills and temperament he trusted: His eighth-grade journalism teacher. “I thought for sure he was going to try to sell me some Amway,” says Cathy Kincaid.
Suspicions allayed, Kincaid helped to oversee coverage of the new toll road, the most complete of its kind, in the inaugural September 2005 issue. She’s been executive editor ever since, managing a staff of 30 journalists, just 35 percent of Impact’s total head count.
It doesn’t take a lot of personnel to put out a monthly, especially when half its content is ads and coupons. Each edition usually has one editor and one reporter, plus a general manager, a couple of account executives and a graphic designer. No big-name columnists, no newspaper union members and no pension funds to worry about. The editorial voice is about as earnest and devoid of irony as you can get in this business. “We don’t editorialise,” Garrett explains. “We lose all credibility when we take one side of an issue.”
Impact has taken a few hits from critics as providing little more than a shopper. “We want to do in-depth stories on sometimes controversial issues, but we don’t want to do investigative reporting,” says Garrett. Examples: Features about proposed changes to middle-school sex education in Round Rock; contentious zoning issues; the ﬁght to close down Planet K, which sells imported smoke products and erotica.
Mostly, though, the papers try to appeal to everyone by providing useful, need-to-know info. You can learn about the effect of Exxon Mobil’s giant new campus under construction in The Woodlands, the efforts to plant new trees to replace those lost to last year’s drought or the threat of decrepit upstream dams to the Houston water supply.
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(This story appears in the 08 March, 2013 issue of Forbes India. To visit our Archives, click here.)