A new Forrester report takes a fairly skeptical look a the hubub around hyperlocal strategies in news products. The analysis strongly suggests that some assumptions made by newspaper and television companies staking their future on hyperlocal efforts need to be reexamined:
Forrester data shows that more consumers care about what’s happening in their country than what’s happening in their neighborhood. In addition, there’s a disconnect between the sources consumers rely on for local news and information versus those they rely on for business listings. This is a huge problem for local TV stations and newspapers, which bear the cost of content production without reaping the benefit of classified ad sales. Companies that are poised to dominate the hyperlocal space will have three key assets: 1) low-cost, community-generated content; 2) an agile human sales force paired with smart ad sales automation; and 3) mastery of the mobile channel, which drives local offline interactions.
Make no mistake: Hyperlocal products work, but they work with an economy of scale and the Forrester research is backing this up. The neighborhood tabloids and free alt-rags are not facing the same troubles as major metro market products who are trying to go deep into neighborhoods with coverage, but don’t have the ad structures and rates to work for customers at that level.
I’ve spoken with and consulted with a number of free print local publishers who didn’t bat an eyelash when online hyperlocal targeted products sprouted up in their backyards. Turns out they were pretty much right. They had the relationships with the local advertisers, they had the relationships with the PTAs and the coaches of the youth sports, they had cheap writers, free distribution and advertising prices that worked.
I’ve also worked with and spoken with a number of successful neighborhood bloggers (and we have a really good one of those behind good old lostremote), they are doing all right with steady traffic and are pulling in a few bucks from online ad networks. They are not for the most part, however, making the jump to real ads, because hyperlocal advertising services don’t really exist for them and they barely have the bandwidth to keep up with the content, let alone sell ads against it.
I’ve mentioned this here many times, the real opportunity in hyperlocal products for news media companies is in aggregating lowcost advertising products in a local version of adwords and offering them in a turnkey online self-service platform to local bloggers. Everyone wins.