Backfence Stopped Ad Sales Months Before Folding

If the fact Backfence stopped selling ads several months ago is any indication, it’s no wonder the network of community sites shut its gate for good last week.

“We just stopped selling,” Backfence co-founder and former CEO Mark Potts told ClickZ News. Potts resigned last week, and said he has high hopes for the “pile” of other user-generated journalism projects he’s working on.

According to Potts, Backfence is now in the hands of its investors. “There’s nobody running the company,” he said. There remains hope interested parties will take the fledgling firm under their wings and help it survive in some capacity. Potts said he’s in regular contact with the company’s investors.

Potts did stress the sites had ads running in conjunction with still-remaining advertiser contracts, up until the ad server was disabled recently. The company laid off its ad sales staff in January, along with other staffers in an effort to focus on things other than attracting new ad clients. “The shutdown had nothing to do with the volume of ad sales,” he continued.

The small network of hyper-local community and citizen journalism sites based in California, Maryland, Virginia, and Illinois, announced June 29 it would cease operations. The general message posted for visitors lamented, “Unfortunately, business issues are forcing us to close our doors and shut down the site.”

The publisher originally offered paid display ads, enhanced yellow pages listings, and classifieds, going after typical local advertisers such as small retailers and local restaurants to monetize the user-generated news and community forums it set up in 13 cities — perhaps that number was the ominous portent.

Champions of local media and citizen journalism hailed Backfence’s mission, but the company fell prey earlier this year to staff layoffs as well as the departure of co-founder and original CEO Susan DeFife. Though Potts was vague as to why the firm ceased ad sales — its sole revenue stream outside investment funding — some suggested the attempt to garner local ad dollars was daunting in the face of competition from entrenched yellow pages and local media sales forces.

It may also have been difficult to communicate to advertisers the value of Web sites that had yet to fully gel. Local businesses didn’t understand how buying on Backfence differed from placing ads in yellow pages or the local paper, suggested Peter Krasilovsky, principal of local media consulting firm Krasilovsky consulting. “Small businesses complained that they weren’t really sure what they were buying,” he said.

Potts disagrees with that notion. “We sold a lot of advertising. I’m not aware of any hyper-local site that sold as much as we did,” he said.

The limited response to Backfence’s shutdown from site members suggests low user engagement contributed to an inability to attract ad dollars. Three comments were left by members of one of Backfence’s original sites in Reston, Virginia. One came from a Reston ex-pat living in Philly. Members of the Arlington, VA and Bethesda, MD sites left no comments in response to the goodbye post.

Backfence was “not able to jumpstart those communities,” said Ken Doctor, newspaper industry pundit and lead news analyst at media market research firm Outsell. “They did not ignite the passion that they needed.”

Despite the demise of Backfence, industry insiders have praised it as an incubator for innovations — such as photo-uploading, local events calendars and citizen reporting — that have made their way onto larger and more heavily-trafficked local broadcast and newspaper sites.

“[Backfence] was a laboratory for so many things that people are doing in community journalism, and they really should be appreciated,” said Krasilovsky.