Hyperlocal still a ‘can’t-miss’ opportunity

Posted: August 13th, 2009 | Author: Serra Media | Filed under: Location is everything | No Comments »

Potential. That word has surrounded location when it comes to news and advertising for a long time.

TechFlash’s John Cook recently asked me why I think hyperlocal is a promising market. It’s a question that continues to bounce around the news and publishing space. The consensus, according to this Fast Company article, is that there is an opportunity here, but much of it remains unrealized.

The challenge is satisfying readers with enough relevant content that makes the pool large enough for advertisers to want to jump in to support the content with cash flow.

Media companies have wasted their opportunity in this space for 15 years by keeping content and revenue strategies separated. That’s why start-up companies or a non-journalistic publisher like AOL see this as a winnable market today.

“Hyperlocal seems like a can’t-miss proposition,” Michael Gluckstadt writes in Fast Company. “The truth is that billions are not migrating to hyperlocal sites.”

Local news companies and yellow page directories have dominated local advertising markets for decades, but most are stumbling into the digital age, hoping to simply survive. They don’t have the tools to engage – and monetize – their audience and leverage their built-in brand awareness in the yet-to-be-won battle for local advertising online.

The combined void of content, community and advertising creates a significant opportunity. Hundreds of new players are starting up to cover their communities with hyperlocal blogs and news sites while venture-backed companies attack the vertical search and local directory markets.

Neither the established players nor the up-and-comers have the technology development resources or strategic thinking they need. So you see new companies forming to attack this opportunity.

Kelsey Group estimates that local advertising in the U.S. will reach $137.0 billion in 2011 and $144.4 billion in 2013. While just 11.5% of that will go to digital in 2009, that figure will double to 22.2% by 2013. Borrell Associates. meanwhile, projects a U.S. online local-advertising marketing worth $15.5 billion in 2013 “fueled mostly by small businesses ditching the Yellow Pages and local newspapers” according to Fast Company.

Serra Media sees the opportunity, and hopes to seize it. Our social mapping platforms and mobile solutions help publishers of all sizes launch interactive hyperlocal destinations that are supported by local advertising, solving the publishers’ double pain of audience and revenue.

The future of hyperlocal lies in bringing neighborhood-level interaction online. Many of our other human interactions and circles of communities are already there. We network with friends and colleagues, share photos with family, play fantasy sports, exchange reviews of books and movies and so on.

But neighborhood-level news was seen as bottom-feeding for most journalists for a long time, so the content wasn’t there to build an audience. Hyperlocal blogs have changed that perception. So the next step is to marry relevant, scalable advertising with that relevant content.

It’s happening already. How many pieces of that $15 billion-dollar pie will be sliced up? That remains to be seen. If there are hundreds or even thousands of slices, then hyperlocal publishing will remain “unrealized” in the eyes of the national business press. But as more readers can find out what’s happening in their neighborhood because targeted advertising is supporting relevant content, the true success of hyperlocal will already have been achieved.

- Mark Briggs

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