Is there still a massive opportunity in local online?

Several hundred people at a Hyatt in LA think so.

And if you follow the local online business segment at all, there are a couple of bedrock beliefs that power much of the discussions in this space:

1. There is still tons of opportunity to connect local businesses to local consumers through digital publishing and marketing

2. Google is the 10,000-pound gorilla and you’re probably better see it as a partner, not a competitor, if you want to have a future

I’m at the Interactive Local Media conference in Los Angeles through Friday, analyzing the state of local business marketing online. (One of Serra Media’s partners, Julia Scott of BargainBabeLA.com, will be presenting on Friday, too.)

I’ll be posting updates to Twitter and you can find the conference stream by searching the hashtag #ILM09. If the morning sessions are any indication, there will be loads of good information presented here.

Already this morning, we heard about data that says that still only 42% of local businesses have a website, only 7% advertise online and only 14% have claimed their free profile page on Google. Clearly, there is opportunity here to connect buyers and sellers online. (And don’t even get us started on mobile.)

A number of companies are raising capital and funding business models to try to crack this nut. I’ll be looking for a few of the more interesting ones to profile here. On the radar from this morning are Kenshoo and Palore.

Kenshoo’s CEO asked for a show of hands this morning on how many people had heard of his company. A small smattering of hands went up. Which begs the 64,000 question: if Google can only get 14% of local businesses to interact with it for free, how will these new-age companies break through?

- Mark Briggs

Sacramento Press launches local ad network

Expect to see more of this in the coming months: indepdent local news and information sites banding together to form a local/regional advertising network.

The Sacramento Press today announced the most recent version, called SLOAN for Sacramento Local Online Ad Network. It’s an ambitious effort, which should be no surprise coming from a start-up news site that has made a lot of progress in a relatively short time. The site counts some 700 contributors to its news machine and will soon have 18 partners to leverage when selling ads.

“We’ve been working really hard on this,” Ben Ilfeld, co-founder and COO, told me last week. “Hyperlocal ad networks have been talked about at conferences, and in the blogosphere, for some time. We wanted to tap into advertisers like auto dealers or Indian casinos and having a network will make that easier.

“Our goal to support people doing interesting and good hyperlocal journalism.”

Upon launch (in mid-January) SLOAN will include The Rancho Cordova Post, Gold River Online, Elk Grove Online, SacMix, The Sac Rag, MyFolsom.com and The Tomato Pages Network.

The SacPress staff will be the only ones selling into the network and Adify will supply the technology, so each will take cut of the action. But Ilfeld said publishers in the network will still receive 60% of the revenue, which is a pretty good deal if you ask me.

“We want to put together enough unique users to challenge the other news outlets, and eventually, maybe even the (Sacramento) Bee,” Ilfeld added.

- Mark Briggs

Social tools and hard work drive local audiences

Social media is increasingly local, and increasingly a major part of local news operations, be they traditional news companies or independent journalism startups. That’s the main point in Leah Betancourt’s piece on Mashable yesterday, which is a must read for anyone trying to engage a local audience. (Yes, I was interviewed for the article so I may be biased.)

Among the highlights is the ChicagoNow project by the Tribune which counts 120 blogs as part of the network. Here’s more:

ChicagoNow bloggers are paid $5 per 1,000 local page views, according to Adee, who said they focus their bloggers on Facebook and Twitter and encourage them to comment on other ChicagoNow blogs. About every month or so the site hosts a party so everyone can meet the new bloggers.

Cory Bergman of Next Door Media said “that about 80% of their stories come from their neighbors and what they post in the blogs’ forums, comments, e-mail, Facebook and Twitter.” He also made it clear that personal commitment outweighs technical brilliance in the local market, saying:

Hyperlocal is a lot of work. There’s no magic formula. We’ve invested a lot of time in covering stories, attending community meetings and introducing ourselves to just about everyone. It’s about people and relationships and trust, not just code. It takes patience, which is (a) rare quality these days.

The Austin-American Statesman and WCCO-TV in Minneapolis were also featured. The key takeaway is that no matter your strategy or software, be it Wordpress, Twitter, Facebook (or yes, even Newsgarden), it takes manual effort to build engaged local audiences. That’s not the message resource-constrained local news operations want to hear — they’d prefer some magical software, for sure — but once you know that it will take a lot of work, the sooner you can start doing the work.

- Mark Briggs

Today, mobile means local

In case you missed it last week, hyperlocal took center stage at the Techcrunch 50, an unlikely venue for what has previously been thought of as too small a problem for the Silicon Valley elite to get excited about.

Those days are gone. In the wake of acquisitions by AOL (for Patch.com), MSNBC (for Everyblock) and Examiner.com (for NowPublic), hyperlocal is hot and two of the top three entrants at the Valley’s premier technology showcase were hyperlocal focused startups. Redbeacon seeks to build a better alternative to yellow pages or craigslist by matching local service providers with prospective customers, while Citysourced is partnering with cities and municipalities to provide real-time reporting tools to citizens who want to report problems where they live.

Sean Blanda, writing for eMediaVitals, highlighted the obvious irony of this development earlier this week:

Both Citysourced and RedBeacon are profit driven methods of servicing a community, and both ideas could have been revenue generators for a local news outlet.

Mobile, of course, is at the heart of this movement. Half-jokingly, I told my Serra Media co-founder Glenn Thomas that Citysourced is the application that we set out to build in 2006 when we first came up with the idea for Newsgarden, but without an iPhone available, we traveled down a different path than we would today. Blanda sees strength in the mobile movement for hyperlocal as well.

The success of local at TechCrunch 50 might be attributed to Web 2.0 fatigue, but it really is a tribute to the cost and availability of location-based tools on the market. GPS-enabled smartphones are becoming the norm, thus increasing the potential market for location-based mobile applications and web sites.

Adding an iPhone app (and other mobile apps) is critical to any local strategy. (Which is why we’re building mobile into each of our product lines.)

As I often say to audiences during various speaking gigs, publishers should view mobile in 2009 as if they were looking at the web in 1998. Then I ask: “what would you do differently, knowing what you know now about how the web evolved?” Blanda sent a similar caution:

Local community news sites would be wise to jump on the bandwagon before scrappy Internet startups eat their lunch.

Again.

Community fruit mapping – now that’s hyperlocal

What is hyperlocal? It’s certainly a buzzword that some people in the news and advertising business are getting tired of hearing. Discussion of the definition of what constitutes hyperlocal news often goes unsettled with one person drawing the line between what’s interesting and what’s trivial differently than the next person.

When you think about it, that’s a pretty simple formula: local + interesting = relevant. Whether a news story, an advertising message or a web site is categorized as “hyperlocal,” depends on how large a geographic area would find it interesting. The smaller the area, the more likely it can be called hyperlocal.

Whether something qualifies as “news” is a different conversation altogether. For example, this effort in Seattle to map fruit trees is unquestionably hyperlocal, but probably wouldn’t pass for news in most traditional newsrooms. The Rainier Valley Post, unquestionably a source for hyperlocal news and information, recognized the relevance and spread the word, writing …

Map Your Fruit Trees! City Fruit is a new organization that promotes urban-grown fruit as a valuable community resource. Why let the 150 pounds of Bartletts from a medium-sized pear tree on Beacon Hill drop to the ground?  Deliver them to a food bank, or share them with neighbors—or make pear butter.

“I know it when I see it” is how Justice Potter Stewart defined obscenity in one of the more famous Supreme Court cases in history. It’s a pretty good guide for hyperlocal, too.

- Mark Briggs

Hyperlocal news sites, ideas profiled

Just a quick linkfest: I’ve been posting more content on my Journalism 2.0 blog lately related to hyperlocal happenings. I want to make sure readers of this blog are aware of them, so here are some recent links:

- Sacramento Press thriving, looking to expand

- Startup news site rocking the boat in Portland

- Chaos shouldn’t cloud current opportunity in hyperlocal

Are questions the answer in local?

Yahoo and Merchant Circle made news this week for deploying question-and-answer forum technology as a key part of their respective local strategies.

Yahoo is adding a section called Neighbors to its Yahoo Local pages and hoping to replicate the success it has enjoyed with Yahoo Answers. Merchant Circle, meanwhile, is launching two new features for its customer-facing side, one called Neighbors and one called Answers.

It’s clear that these companies see opportunities for engaging a local audience with targeted interactions. Message-board forums may seem like a 1990s approach, but with 2009 technology improving the user experience, a question-and-answer solution makes sense on a local level, providing a more effective and targeted networking opportunity than the huge, general experiences you find on Facebook and Twitter.

- Mark Briggs

TechFlash interviews Serra Media’s Mark Briggs; Local Onliner profiles TownLuxe

Serra Media CEO Mark Briggs chatted recently with TechFlash’s John Cook about hyperlocal news, the future of journalism and innovation.

BargainBabeLA.com, which uses Serra Media’s TownLuxe platform, was also covered today on the Kelsey Group blog and Local Onliner blog. In the post, blogger Peter Krasilovsky talked about some of the appealing deals he learned about thanks to BarbabeBabeLA.com.

Here are some highlights of the Techflash Q&A. Check out the full interview here:

What makes hyperlocal news a promising opportunity? “To me, it is that one untapped area especially for online advertising. I think there is still a lot of potential and opportunity within the digital local space because you have all of these small, little advertisers who maybe did yellow page advertisements and they couldn’t even afford the newspaper…. Now, with digital technology if you build that targeted audience, you can deliver super, highly-targeted ads that the audience is not going to see as interruptive.”

As a new media pundit, what do newspapers need to do to survive? “I think they would be smart — and I’ve always thought this — if they actually committed to being a Web site first. (If they) considered themselves a digital property that happens to put out a print product, they would be ahead of the game.”

Where should they invest? “If you had an Internet company called The Seattle Times, you’d be pouring massive amounts of resources into mobile right now. Massive. Because mobile is going disrupt news and information just as the Web did ten years ago. So maybe they missed on the Web, but they can still take advantage of mobile.”

On launching the TownLuxe local shopping service: “(My wife) looked at Newsgarden and said: ‘That’s great, Mark, but I think it really should be used for shopping…. BargainBabe.com launched our platform on July 1 and we’ve actually seen more contributions in one month to her, than we have in one month for any of our news platforms. So we think people may be more interested in contributing items about shopping, than they are about news. Shopping is something that everybody does … and everybody at one point or another has bragged about a great find at a store or a great deal they’ve got. That’s what we are tapping into.”

- Amy Rainey

If you’re looking for a trend in hyperlocal news, keep looking

An investor once called them “the cockroaches of local media” (because they should have died and didn’t). But Mike Orren and his team at Pegasus News are probably the best example of what works and what doesn’t for a hyerplocal news startup.

In the five years since Pegasus News launched in Dallas/Fort Worth, the company has survived near-death experiences and been sold twice. As recently as May of 2009, in the middle of the recession, the site was setting records for page views and advertising revenue. So Orren knows what it takes to survive the roller-coaster ride of an independent journalism startup, making his recent blog post essential reading.

Last week saw a number of developments in the hyperlocal space. While it’s natural to try to draw a trend from deals, launches, closures and acquisitions, it doesn’t usually work. Orren wrote:

In the market space in which I presumably operate, there were great examples at both ends of the spectrum last week. My pals at Everyblock sold their company to MSNBC, and instantly, Hyperlocal is a Business Now. Seemingly moments later, the Washington Post shuttered its “hyperlocal” site for Loudon County, VA — and voila, Hyperlocal is Dead. My friend, Greg Sterling, quickly saw the fallacies flying.

Orren analyzes his own experience with Pegasus News as an example of what a typical startup is likely to go through. In the end, he boils it down to this:

• Data is as important as news.
• Individual behavioral customization is the road to winning readers and delivering effective advertisers.
• What happens in your neighborhood or to people you know is as important, if not more so, than the three-alarm fire downtown.

Those are the core concepts Orren built the business plan around in 2004. “Today, these sound laughably obvious, if not pedestrian.,” Orren observes today. While five years of experience has taught him that his instincts were mostly right, it has also taught him that execution is everything:

Anyone who’s worked on or invested in a start-up will tell you that there are two parts to the business: the concept and the execution. While both are critically important, I’ll argue that a flawed concept with great execution has a better shot than the inverse.

If you’ve read this far, then you’re obviously bitten by the hyperlocal startup bug so be sure to read the entire post.

- Mark Briggs