While other hyperlocal news sites are busy trying to create a scalable model of a website in which paid journalists cover local news against which local advertising can be sold, Chris Tolles, a founder and CEO of Topix, is taking a different approach. Topix hosts thousands of local forums on which community members post local news, express concerns and, yes, occasionally sneak in some porn. And there’s not a journalist in sight. Tolles thinks it just might be the future of news.
Topix began life as a news aggregator and has morphed into something else. Can you talk about the evolution of the company?
We launched in 2004 as a pure play news aggregator — when we noticed that 45 percent of the site that had to do with local news, we realized that there was a hole in the market. After we proceeded down the local path for a while, we saw that there was an issue around having only 1,400 daily newspapers, 4,000 TV stations and 3,000 radio stations producing only a few truly local articles per day. We realized that we would have to boot up a local site, we would have to get unique content contributed by the people on the site, and we built out a commentary system, first to comment on existing news articles, and then enabling people to start their own news stories. Now we are successfully monetizing user-generated local commentary and are profitable based on ads, many of which take advantage of our aggregation of local audiences.
User generated content presents a particular set of problems including inappropriate posts and images. How do you assure advertisers that the content against which their ads appear is within acceptable limits?
Our forums are primarily text based. There are photos, but they are a very small part of the site. We have a fairly robust AI system to moderate the content, and we monetize much of the user generated component of our site with performance based advertising or recirculate the users from the user generated sections to those primarily focused on advertising.
Looking at the “recently updated forums” list on the Topix site, it is apparent that some Topix sites are very active and some are not. What makes a community ripe for an active and engaged Topix site?
We have over 400,000 different categories of forum, including 35,000 local forums. We are focused on the local components of these, and are constantly working on ways to boot up new towns and grow the activity base of Topix. One of the nice things is that having 1,500 active towns makes us a very large player in the hyperlocal space.
What do you think that the role of mobile will be as hyperlocal evolves?
I think mobile is a massive part of all aspects of the space. We have gone from 0 to over 20 percent of our traffic being in mobile in the last two years, which is huge. Figuring out how to do even better here is a key part of our planning.
What is the effect of 400-plus, mostly locally based daily deals on hyperlocal content sites like Topix? What is compelling to advertisers about Topix?
Daily deal sites are paying top dollar for clicks around local. It’s a huge windfall for us that these guys have driven up the prices for local search inventory. Our approach is monetizing our content through third party advertisers, be those traditional display ads or cost per click networks. So, I see content sites like ours as a channel, or a marketing partner for daily deals revenue. We are competing more against different approaches (such as going to television or targeting behaviorally) for ad dollars, rather than against other local players. We are compelling because we can take an ad and easily localize that ad in a single place to a wide set of audiences. It is more likely that the ad agency looking for local inventory is going to buy placement on both Topix and Patch (and local newspaper sites for that matter) if it’s easy, instead of doing a bake off between us. Deciding to focus on local is a win for us and our approach.