Knowledge Bridge

//Kevin Anderson /January 22 / 2013

Lessons that cut through the hyperlocal hype

If I had a dollar for every time I’ve heard that hyperlocal news start-ups would be the next big thing in journalism, I’d be a rich man. But unfortunately, for many of these sites, dollars, in the form of a sustainable business model, have not materialised. The dream has been that targeted local advertising would flow to focused, local content. The problem has been that “hyper” local content, as opposed to simply local content, has been scale. How do you create content that is targeted enough to be relevant to local readers but still captures a large enough audience to be relevant to advertisers? At the recent Street Fight Summit, a conference dedicated to hyperlocal media, Kira Goldenberg of the Columbia Journalism Review gave this pessimistic summary of a panel of hyperlocal news start-ups:

The panel just before lunch at Tuesday’s Street Fight Summit, a two-day conference dedicated to all things hyperlocal, was on hyperlocal “publishing models that work.” But by “work,” organizers seemed to mean models that “have yet to fail”; none of the sites represented by panelists are making money yet.

The panellists included Daily Voice, DNAInfo and GoLocal24, and all of them said that they were on their way or “on plan” to profitability but still not there yet.

Hard lessons learned

If you want to cut through the hype, it’s worth reading a detailed post by Mike Fourcher, a Chicago-based entrepreneur and publisher of hyperlocal sites in the city. He listed 21 lessons he learned running sites Lakeviewing.com and Center Square Journal, and I’ll highlight just a few here that are relevant to all markets. The post is well worth reading in its entirety because it’s one of those times where someone is highlighting challenges rather than simply promoting success.

The challenges of selling to small- and medium-sized local business – This is one of the advantages that newspapers and other traditional media still hold and must defend: their relationship with local advertisers. For hyperlocal news start-ups, they don’t have these relationships and must build them, a challenge that Fourcher said was much more difficult than building an audience. He pointed out how local small businesses suffer fatigue from being sold to, not only by people wanting to sell advertising but also by their suppliers. He said, “Small business owners are constantly fighting off salespeople with a stick.”

New competitors and challenges in local advertising – In addition to these long-standing challenges in the local ad market, he also said that there were novel challenges that he faced. Chicago was where Groupon was founded, and although it has suffered from competition and trying to scale its own business model, Fourcher said that new Groupon-style businesses are being launched that are signing up advertisers rapidly. Daily deal providers and aggregators are now present in most news markets. He said:

Belly, which is founded by former Grouponers and funded by the Groupon founders’ investment fund, showed up at a local merchant group meeting unannounced. They brought a pile of iPads for businesses that sign up, and  thus signed up everyone in the room in a flash. Now Belly is a major competitor for neighborhood marketing dollars.

Social media giveth. Social media taketh away – As we’ve said frequently here on Knowledge Bridge, news sites have been very successful in building their audiences using social media, but now businesses are turning directly to social media to market to their customers, cutting out intermediary advertisers such as news organisations.

I’ll highlight one more lesson that he learned because I think it’s so crucial in terms of commercial success:

It’s easier to find a good writer than a good sales person. … Lots of people like to write. Very few people like to sell.

Just as editors and publishers know that they need to hire great journalists to create great content to attract audiences, we need to hire great sales staff to attract advertisers. Local journalism is coming under increasing pressure in the digital age, but to maintain sustainability we need to fight for advertisers just as aggressively as we fight for readers and viewers. Fourcher has some important, hard earned, lessons to help you keep winning that fight.

Article by Kevin Anderson