With LR’s new focus, I wanted to lay out the landscape in “the battle for local” – and look at some of the strengths and weaknesses of each.
Local TV
In most markets, four to eight television stations compete for on-air revenue. They traditionally knew who their competitors were and focused on on big advertisers like car dealers and furniture stores. While their core business is still fairly healthy, dark clouds loom as the economy lags, viewership erodes and local ad dollars become increasingly competitive. Online, TV stations aren’t known for being very innovative. Stations are running their sites much like they did eight to ten years ago: text news, video, weather and traffic — a direct reflection of what they cover on the air but with a greater emphasis on around-the-clock breaking news.
Local Newspapers
Local newspapers used to subsidize their news gathering not with the ads that ran next to the news stories – but the small text ads in the back of the paper known as classifieds. Now that model is nearly dead, and newspapers are having to find new ways to fund the paper while trying to get agressive online. On the print side a vicious cycle is in place: fewer ads leads to less content — which leads to fewer ads and so on. Newspapers are becoming labs of online experimentation. They usually have much bigger staffs than TV stations and are willing to leverage the body count to try new things. Some of those efforts are working, but newspapers are far from finding the silver bullet on the online side, and as a consequence are rapidly shrinking.
Local Radio
Local radio continues to reach a large number of folks in a place few other media companies do: the car. Morning drive is still a cash cow for local radio folks. But satellite radio, iPods and in-car navigation (with built-in traffic reports) are beginning to threaten that dominance. With Wi-Fi and other Internet sources becoming more plentiful, IP-based devices could become common-place in cars, splitting open the number of choices in your vehicle. As a general rule, radio stations don’t do much online. Some info about its personalities, maybe an audio stream and a blog – but nothing to hang your hat (or ad dollars) on.
“GYM” Google/Yahoo/Microsoft et al
By rounding up lots of small advertisers with small niches, Google and its ilk are taking a huge portion of the local pie — mostly without local boots on the ground. Google does it without generating much of its own content, and offers automated tools to help advertisers mount a very effective ad campaign in a simple way. These companies spend great amounts on R&D and are always evolving and finding new ways to get their hand in the local pocket. Of course, it’s all fueled by search: increasingly the most popular way people research local products and services.
Craigslist and paid classifieds
The classified site takes its share of local revenue not by pocketing it, but through price desctruction. The minimally-staffed free classifieds sensation has decimated the newspaper industry, and only charges for ads in a few markets. As the site continues to grow larger and push into more markets, it will continue to put the squeeze on the print industry’s cash cow. Despite what you read, it isn’t all sunshine and roses. Craigslist is often in the news because its freewheeling ways breed illegal activities. Everything from prostitution to theft and more started from an ad on Craigslist, and some are starting to see it as a seedy part of the Internet. This could threaten dominance if someone comes in with a way to clean up the “junk” so to speak. Meanwhile, the battle continues among paid classifieds, with many newspapers teaming with Yahoo’s Hot Jobs and sites like Zillow making a real run at real estate from a unique angle.
Pure play locals
Small sites like the West Seattle Blog or big efforts like Everyblock hope to become the hub of local information and activity in ZIP code size ares or smaller. They threaten to do a better job covering areas than the local paper or TV station ever will, and could unite hyperlocal advertisers with users in the area. These sites give advertisers a choice beyond direct mail to target a small area, and could continue to draw ad dollars away at larger and larger rates. The sites often do this with no or small staffs, relying on the local community and public sources to provide content. There are also dozens of local niche sites, like Metblogs and Daily Candy, that also capture local eyeballs and ad dollars.
City guides
City guides like CitySearch have been around for a decade or so, but for the most part haven’t had a huge impact. This could change if the hyperlocal revolution we’ve been talking about comes to pass. If they aggressively aggregate into smaller and smaller (even neighborhood size) areas — and gain traction selling local video — they could begin to draw away traditional ad dollars. Yelp, meanwhile, is growing very quickly in reach and performs very well in many strategic search keywords.
Yellow pages and other directories
Everytime one of these stacks of paper-waste lands on my doorstep, I get annoyed. I lug the dumb thing to the recycle bin, and marvel at how strange it is that I get four or five a year. The Yellow Pages publishers have done a nice job of convincing advertisers that they must be in every book to reach the market. Of course, most folks now get their phone information online or on a mobile device. YP publishers are beginning to get aggressive online, capturing strategic search keywords and leveraging their large local sales forces to sell both print and web products. And directories like Local.com and Angie’s List are making progress, as well.
Alt weeklies and local magazines
Traditionally weak on the web, alternative weeklies are showing some signs of life in many markets, especially in the local music niche. The Stranger’s “Slog” in Seattle, for example, is the market’s most popular blog. Local magazines are beginning to realize their “best of” features extend naturally to the web as local online directories. While many magazines are rich in many advertising segments in print — such as travel and condos — they’re not converting those advertisers very well to the web (and may not want to, given the fact local magazines are less impacted by the internet than other print forms of media).
Outdoor
Billboards are undergoing a digital revolution of their own – but it has little to do with the Internet. Old paper signs are increasingly being replaced with giant TV screens that can be used to display multiple messages to the cars and pedestrians zooming below. The messages can be day-parted and place much more quickly, often at a smaller cost than buying the old paper style board. Plus, advertisers can change their message at a fraction of the cost. As long as people venture outside, billboards will likely to continue to be a force in the local advertising market.
