Big Hyperlocal Blogs Are Struggling Because They’re Looking At Advertising All Wrong
xAd | 03/22/2012
Recently, media guru Bob Garfield and others have argued for the inevitable demise of the hyperlocal media industry, citing AOL’s struggling Patch network; Gannett’s decision to shutter its hyperlocal parenting network, MomsLikeMe; audience fragmentation and the inexorable downward spiral of online advertising prices.
These sites seem to defy the logic of mass media by catering to niche audiences in highly specific geographies, yet have managed to carve out a successful business from a very limited set of potential readers.
So what’s the truth? Are hyperlocal endeavors destined to be a drain on the bottom line? Or can this content be monetized in a way that’s economical and makes sense for big media? I feel strongly that the latter is true, primarily because of the convergence of three major trends. First, today’s readers demand a highly personalized experience online, with content that is curated and relevant to their lifestyle, making hyperlocal sites a natural fit.
Second, high-quality local content is becoming easier and less expensive to produce because of companies like Contently that connect publishers with freelancers, and ones like Demotix that serve as a newswire of citizen journalism for mainstream media outlets. Third, and most importantly, innovations in the field of online advertising have made the economics of hyperlocal more practical for publishers.
It’s this last point that I want to explore further, because the bottom line is that traditional models simply don’t apply. In order to be successful, publishers need to think differently, be better at adapting to the needs of hyperlocal readers and experiment with new strategies that are outside of their comfort zone.
Outsource local ad sales: Standalone publishers just don’t have the sales force necessary to source ads from all of the smaller markets. White label providers like Group Commerce, Signpost and NimbleCommerce do the work of finding high-quality local ad content in the form of deals from local merchants.
Make it easy for local advertisers: In addition to a direct sales team, the biggest publishers typically rely on media buying agencies to facilitate large national buys. However, this approach excludes local advertisers who want to do small, one-off campaigns. By creating a self-service platform for local businesses that want to conduct smaller buys, publishers tap into a new revenue pool that doesn’t rely on the involvement of a sales rep.
Think beyond the banner ad: Banner ads are a dying breed, and they’re even less effective with hyperlocal content, whose readers are looking for relevant, engaging ads that complement what they’re reading. Luckily, this kind of content opens up a range of ad options, including those that can be integrated into the actual content, like event listings, Facebook and Twitter promotions and daily deals.
Use specialized ad nets to sell remnant inventory: A handful of networks specializing in hyperlocal ads have recently popped up, giving publishers a relatively easy way to sell excess inventory. Publishers can choose from national nets like Local Yokel Media and City Grid, or regional ones like The Sacramento Local Online Ad Network and The Seattle Independent Advertising Network.
Monetize mobile: Most publishers are already sinking precious dollars and resources into creating and maintaining their mobile apps. Partnering with a location-based mobile advertising ad network like WHERE and xAd enables them to easily monetize these apps through geotargeted ads and offers.
As I’ve followed the debate over the future of hyperlocal content, one thing has become very clear: there are no silver bullets when it comes to figuring out the right business model. The good news is that the stars have aligned on many fronts – reader behavior, breakthroughs in ad technology and the accessibility of high-quality content – to open up a rash of new possibilities for getting this right. The key is a willingness to ignore the naysayers, try new things and accept some failures along the way.