From the ever-wonderful Hugh Macleod at Gaping Void.

New Homes Magazine ad sales are up 20 percent year-over-year through the May issue, without any increase in ad rates.

Online revenues from YoChicago and Housing Newswire are largely theoretical at this point - a bit beyond the fabled "tens of dollars" that newspaper sites were once mocked for generating, but not enough to talk about.

Weak online revenues are not yet a cause for concern. Print's up substantially over budget. And, we have yet to finalize our online offerings and begin asking for orders.

We've been focused on recruiting, adding and training several new staff members. We've also redesigned the YoChicago site (rollout next week) even though it's new, has been well received and is growing its audience.

The bulk of our time and attention recently has been devoted to establishing a base for our neighborhood guide content and our other audience-building features. More on that topic soon.

The March issue of New Homes Magazine goes to the printer on Friday. It's entirely transmitted over the Internet, and has been for some time now.

Orders for the issue closed at 17% over goal, a 30% year-over-year increase.

We don't (yet) have a plan for investing the higher-than-expected revenues into more rapid expansion of Yo Chicago's online content.

Our online efforts have had a single-minded focus on content, with hardly a glance at exploiting that expanded online content and reach to drive print sales. We're probably 60 days away from turning our attention in that direction.

We made a presentation about Yo Chicago to the Triangle Neighbors last night, one of the 12 groups under the umbrella of the Lake View Citizens Council. This was the first of what will be many, many such presentations.

After all the effort, it's reassuring to get positive feedback from the outside world on what we're doing, including several unsolciited "great URL" comments. And. it's great fun seeing and talking to Chicagoans again after too much time spent on the road.

The first issue of New Homes Magazine this year is slightly ahead of budgeted revenues. We've budgeted a 10% increase for 2006, coming after a nearly 30% increase in 2005.

All of the increase in print revenues, and more, is being invested in building online content.

In an earlier post, we offered a partial explanation for the non-success – the publisher objects to calling it a "failure" – of our Neighborhood update product.

Some of the resources that were devoted to that product are being redirected into a different approach to selling a single element of the product: housing news releases based on HomePagesUSA.

We’re in the process of building a new Web site for our refocused effort. You can see a pre-alpha static mockup of the site’s home page at HousingNewswire.com. We’re blogging that effort separately, since HousingNewswire is a free-standing product whose audience is different (in large measure) from the audience for this blog.

I’ll use the words of Karl Marx, embodied in a Marshall Berman title, to summarize the publisher’s reaction to this development: “All that is solid melts into air …"

The headline quote is from IDEO's David Kelley, via Tom Peters.

Barry Pearce, the New Homes CEO / Editor / Publisher, suggests in a comment in response to an earlier post that I'm premature in dubbing our Neighborhood upates product a failure.

He's probably right - and doesn't seem to have focused enough on the "so far" part of my conclusion.

I have a bias for quick shifts in emphasis, and for not pouring resources into losers. "Fail faster. Succeed sooner."

Neighborhood updates isn't dead. In my take, it's just going from a private room in intensive care to a double-bed room on a regular ward until it gets better and can stand on its own.

The end of the publication year for New Homes Magazine, and the ramping-up of our planning efforts for NewHomes1.com, is a good time to analyze the success of our novel Neighborhood updates product. We viewed this product as a source of user-generated content as well as a source of revenue.

In brief, the product has to be counted a failure. It failed to generate enough revenue to justify the effort that went into it. Real estate agents, the target buyer for the product, either didn’t see its value or weren’t willing to make the effort to find novel ways to connect with home buyers and sellers.

On the plus side, the product proved an attractive feature in print (PDF file), and prompted significant click-through activity on the Web. Advertisers, however, have so far been unable to trace any contacts to that activity.

How do make sense of the product’s failure? I often look to The Innovator’s Solution, by Clayton Christensen, for insights. It’s one of the most useful business books I’ve ever read. Christensen contends (pp 76-77) that:

When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can ‘hire’ to get the job done. This is how customers experience life. Their thought processes originate with an awareness of needing to get something done, and then they set out to hire something or someone to do the job as effectively, conveniently, and inexpensively as possible. The functional, emotional, and social dimensions of the jobs that customers need to get done constitute the circumstances in which they buy.

We made a credible effort (see the Tales from the front posts) to create awareness of the need for real estate agents to find novel ways to develop relationships with home buyers and sellers, rather than tapping into a need that they perceived. To the extent that we were successful in creating a perception that this was a job they needed to get done – and we did have some success – we failed to account for the “functional, emotional and social dimensions" of the job.

Our efforts to establish the Neighborhood updates product won’t end, but they need to consume fewer resources and wait passively for the customers who have prioritized the job of finding a smarter way to market their services.

My views on how to do the math, and some other views which accord more with the editor's, can be found in the comments here.

That said (and it's said to insulate me from charges of inconsistency), we're making better progress toward profitability than I had expected.

We just sent the September issue of New Homes Magazine off to print, and there were several Photobox ads, using HomePagesUSA, that were ordered without my assistance, or even knowledge. They came rolling in on the day of our deadline last week, and made the trip straight from the online ordering process to the magazine, exactly as they should. Momentum is building, and word is spreading.

The Neighborhood update feature is starting to catch on as well; we're offering agents an ad in print that includes a Home Page with updated, detailed market analysis and insight (an "adicle," as Joe discussed previously).

I'm still focusing my own time and energy on two essential aspects of making this work: getting the word out, and educating my consumers. As with all sales jobs, there are days when those jobs can be immensely frustrating. But there are days, like last Wednesday, when I can watch ads appear in our system, knowing that it's the value of the ads themselves, and not my skills as a salesperson, that's making that happen. Those are good days.