How Circa can (will?) make money

Circa recently launched a new kind of news app. I’ve been following them for awhile and included them in a roundup of “hot journalism startups”. You have to have a lot of guts to come out and say, We’re here to save journalism! which they kind of did.

Now that the app has officially launched and we can all see the idea that was kept under wraps for so long, it is clear that they have an approach that’s really somewhere between editorial and programmatic. Something like Flipboard is programmatic – it’s repackaging content in a way that makes sense for mobile. A news startup like Quartz is editorial – sure, their newsletter links to other sites in order to create a good experience with little resources, but the long-term goal is to create original content (which is not scalable like technology is).

Circa is an app that gives you a list of story topics, and you have the option to follow each one. If you follow one, you get a push notification when there are updates. Each story is made up of these chunks of story updates. They’re completely fact-based and likely based on some original reporting and sometimes pulling from other sources.

So, Circa could scale but it will be the hard way – by hiring and training more editors. It’s not social so it cannot rely on its users to create content, or grow it via network effects. But, therein lies the opportunity.

What are native ads?

Native advertising is being used by editorial and programmatic companies alike. Facebook and Twitter use it – it’s anything that is in your activity stream from someone you don’t directly follow. The advertiser has to pay Twitter/FB to get in front of you, because you don’t follow it already – but usually a friend of yours has to be following the brand, or you’re following similar brands. This makes native advertising unlike normal advertising. The eyeballs are somewhat “earned.”

Editorial companies, like mine (Mashable) and others such as The Atlantic, use a form of native advertising. In our case this means instead of a display ad in the sidebar, the advertiser buys a piece of content. It’s in the same stream of articles as all our other pieces of content, and it’s written like the other content.

How Circa could use native ads

Since Circa is not social, it avoids the weird double-dipping issue that Facebook has. Brands can buy ad space, but they can also earn exposure by simply creating an awesome (free) page with great content (which is costly to the brand in terms of time and talent but earns Facebook no income). Right now, most people will say that for your Facebook ads to pay off, you must also invest in your page presence. But Circa will not have to offer brands a place to interact for free because everything on Circa is created by its editors, not users. But, they can sell space to brands.

If Circa offered native advertising, it would look like this: In the stream of stories each day, there might be one or two slightly shaded headlines that were actually a brand’s tagline (or other text). You open it, and instead of seeing chunks of a news story, you’ll see info from the brand. Maybe Old Navy: “New line of winter sweaters on sale now,” “Clearance items an extra 25% off over the holiday weekend.” Say you want to follow this brand. You do. Now when a sale is announced, you get a push notification. But, you’ll never get a push notification from a brand you don’t follow, and that keeps the user experience solid.

This type of update-driven marketing is perfect for mobile, and works well for brands. It doesn’t always have to be a sale – it could be more content-based, such as “Visit our blog for Superbowl appetizer recipes” from Heineken the week before the game.

It’s even better for local businesses, who would want to drive traffic to their shops at a certain time. An art gallery, that has a reception, for example.

Will Circa offer local news? Of course, as long as they build up the userbase to justify hiring local editors. In my personal use, I found that I won’t use Circa for most national news stories, but would for local. I used it to follow Hurricane Sandy, and saw updates mostly in New Jersey or other areas, where the action was – but I live in North Brooklyn, and what I really wanted to know was whether power was out near me and if the trains were flooded or I needed to evacuate. Circa doesn’t need a North Brooklyn editor, just an editor in New York who’s sending targeted alerts to people based on location.

With a shift to verifying social media news and original reporting, Circa could become a major news service. If it wants to be free to users (as breaking big news should be, it’s a public service) there needs to be monetization via a third party. The format and experience Circa offers now is a great fit for native advertising, maybe better so than how it’s used currently. Now, who wants to explain the selling points to the agencies? 😉