While independent online news start ups report progress in growing revenue, they nonetheless face significant challenges.

My independent survey of news start up publishers earlier this year underscored the progress many of these organizations are making - 27 percent reported growing revenue as an area of success in 2013 compared to only 7 percent who cited revenue success a year earlier. 

But revenue is also where the challenges lie. Six in 10 cited revenue as a challenge compared to three in 10 who cited content.

Publishers in the survey repeatedly cited these issues:

1. Marketing and advertising sales (primarily for-profit sites). Like their peers in legacy media, start up publishers find it challenging to sell online advertising to customers who are used to traditional media.

Watershed Post: "How to  offer value to local advertisers "beyond banner ads" in a way that will compel them to advertise regularly on my site."

Camel City Dispatch: "Finding sales staff who can explain an online-only format is a challenge. Our numbers are better than most other media outlets in town, but it takes someone with time and an understanding of local media to make the sale. Online-only is new territory for many local businesses, and those who do not themselves have a strong online presence are harder to convince of the need for advertising in this format."

Tribeca Citizen: "Local advertisers need to learn more -- I've made more money from the site this year because I've spent much more time explaining online advertising to local businesses."

Alaska Dispatch: "Like all for-profit, online-only sites, our biggest challenge is educating advertisers in online marketing. We've seen tremendous growth in advertising, but the biggest struggle is getting advertisers to take the leap from traditional marketing channels to online-only. Those that have taken that leap have become repeat customers."

2. Diversifying revenue sources. Nonprofit news organizations in particular face the challenge of reducing their reliance on foundation grants and developing other sources such as sponsorships, events and memberships. For-profit sites remain highly dependent on advertising with little capacity to explore other sources. 

Chalkbeat: "We are working hard to learn about how to raise sponsorship dollars, conduct effective individual donor (or membership campaigns) and revenue-generating events."

Lake Texoma: "So far we are 100% advertising based but interested in finding new streams of revenue."

Bungalower: "We are focused on finding a revenue model for local journalism that isn't dependent on advertising. To do this we launched a membership model to drive consumer revenue. This mission to drive revenue from consumers will continue to be a challenge because there isn't a model to follow for what works."

3. Building the capacity of the organization. As these organizations become more visible and popular in their communities, the demands for coverage grows. It's a problem for-profit and nonprofit site share.

Uptown Messenger: "Like any news organization, we have many requests for our time from many different important sources every day, and a limited staff to respond to them. Fortunately, as our revenue is growing, we are beginning to add more staff in hopes of becoming even more responsive to the needs of Uptown New Orleans."

Fayetteville Flyer: "Besides sales, billing and accounting duties that keep the Flyer running, our small staff also works to cover local meetings, business openings, art events and other happenings that lead to interesting stories. There's simply not enough time or resources for long-form, investigative journalism right now."

VTDigger: "Our growth has outstripped our ability to perform. Readers expect us to be as content rich as big local papers ... They also expect robust social media engagement. This pressure is real and constant."

Despite the challenges, a good number of sites are making progress. As I think about when I started conducting this survey in 2010 as an RJI fellow, I've see a clear shift in attitudes and expertise. Back then, journalists were often in denial or ignorance about the need to raise money and operate like a business. Within a year or two, they were asking how to do just that. Today, I see more and more sites who have figured out the basic how and building on that.

Start ups are volatile by definition; more fail than succeed. People who compare them to mature sectors of the industry will inevitably find them wanting. But it's an unfair comparison. What matters is whether they are making progress. Judging from the survey results, many are. 

The surveys are conducted on my database, www.micheleslist.org. More than 65 publishers responded to questions about successes and challenges. Here are some additiona numbers:

Where would you say your site is having the most success?

Journalism - 64%

Community engagement - 34

Revenue growth - 27

Reach/visibility - 21

Where would you say your site is most challenged?

Revenue - 63%

Content - 30 

Engagement - 12

(Because publishers could site more than one sucess or challenge, percentages total more than 100.)

Here are previous posts on results of this year's survey:

Local news start up survey: Most publishers report revenue growth

Survey: Independent local online publishers rely heavily on ad revenue

Survey: News start ups don't spend enough money on making money