A ‘Community Service Model’ for Hyperlocal

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Patrick Kitano is a guest author. If you’d like to submit a guest post, click here.

Hyperlocal media needs a new business model that does not rely on the centuries-old practice of hitting up local merchants for advertising dollars. In my previous post on Street Fight, I argued that local publishers have relegated the business community into an “advertisers ghetto,” even though it’s really the business (and nonprofit) communities that have the greatest incentive to contribute local content related to their livelihood. When merchants and civic organizations produce content for local publications, they develop their brand, engage their community and, as a result, market themselves. This new hyperlocal model would serve the business, nonprofit and civic sectors by providing the free open source media they need to deliver news and promote their agendas inside the community. Call it the community service media model.

The current hyperlocal business model:
1) Publishers hit up the local business community for advertising to support operations — a model that is perceived to be broken.
2) Content is generally produced by journalists, not sourced from the business community, due to inherent advertiser conflict of interest. For example, if one restaurant can write about the foodie scene in their city, other restaurant owners will also want the same privilege. The advertising model will break down as merchants boycott the publisher based on perceived favoritism.

Hyperlocal-as-community-service model:
1) Publishers provide the business community free marketing and advertising. Special focus can be placed on publicizing good causes and civic organizations.
2) Publishers solicit content from the community, particularly from local merchants. Any restaurant owner can post articles/social media commentary on their city’s food scene, Realtors can discuss the real estate market. Publisher selectively provides access across all social media, including Twitter and Facebook, to contributing local writers and businesses.

Why the hyperlocal-as-community-service model works:
1) The key is on-the-ground management. The publisher can be anybody, individual or group, who wants to build a local media presence that will complement their “day job.” For example, Realtors and insurance agents can be publishers, and leverage the extended networks they build through their local media resource to do more transactions.
2) The business community, bombarded by sales calls from local media ad reps and daily deals vendors, now have alternative media to market themselves free. Community service media is disruptive because it puts advertising power into the hands of the advertisers.

How does the hyperlocal-as-community-service model make money?
1) Building a local media resource can cost less than $1,000 using curation and aggregation tools, and blogging platforms. A number of web design firms like Media Street Apps have developed hyperlocal media templates.  It’s surprising more locals aren’t doing this.
2) Hyperlocal publishers can be aggregated into national networks similar to Patch.com. Although local advertising can be provided free of charge, in aggregate, a national hyperlocal networks can create new revenue models that extend across the cities in the network. For example, a national chain like Home Depot might sponsor Home & Garden sections that include directories of local Home Depot contractors across the network, and share associated lead generation revenues with the network and local media owner.
3) Daily deals and other pay per performance systems can be automatically syndicated across hyperlocal networks based on deal geolocation, providing affiliate revenue streams.

Patrick Kitano is founding Principal of Domus Consulting Group, an advisory for social commerce and social engagement solutions, and administrator of the Breaking News Network, a national hyperlocal network devoted to community service. He is the author of Media Transparent, and contributor to Social Media Today, Daily Deal Media, and The Customer Collective.