Will Big Brands Cut Out the Middleman to Go Hyperlocal?

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

Most of the online publishing world still views “hyperlocal” as referring to a local news publication that is dependent upon advertising revenue. Yet, with the rise of Groupon, new revenue models are developing that support hyperlocal advertising outside of the traditional newspaper ad model.

Going forward, brands will start marketing at the hyperlocal level, creating another business model that isn’t quite apparent to traditional publishers. This week, Walmart announced the launch of My Local Walmart, a Facebook application that customizes marketing to every Walmart store in America. The value of these hyperlocal Walmart presences will be in the conversations that will take place within the Facebook app framework. Customers “liking” and commenting favorably on Walmart items will broadcast these opportunities to their immediate neighbors, which will have far greater marketing impact than any banner ad. Imagine if Whole Foods and Home Depot followed suit and developed hyperlocal networks of their own, either via Facebook or through websites that focus on nutritional food or home and garden, respectively. When this trend gets multiplied across a large swath of national brands, the hyperlocal space starts to explode commercially.

For national brands, it’s simply a matter of expanding from one main destination, like Walmart.com, to 3,600 web destinations based on locality. Positioning brands as local, social products is a new marketing concept that will cut across all product categories.

Movies, for example, are a social product but current movie marketing practice simply doesn’t engage audiences at a local level. We see a trailer, go to the movie and “that’s all folks.” Although there are a lot of review sites, local conversations revolving around movies don’t exist online, even though movies are talked about in high schools, around water coolers, everywhere. These local conversations need to be captured by the studios, by the theater chains, and by the local restaurants neighboring the cineplex, because influential social messages like “Hey, let’s all meet up at Romano’s at 6:30 so we can see the 9:00 Moneyball at AMC” are how consumers create business opportunities.

In sum, we’re on the brink of seeing brands start to carve into the hyperlocal pie simply by providing an online space to offer localized content and capture the “neighborhood” conversations that locals want to see.

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.

  1. October 13, 2011

    This is why independent hyperlocals need a network-like organization that can efficiently deliver geo-clusters of communities to regional and national advertisers.  It’s not yet clear whether the new trade association of independent news publishers will evolve into such a one-stop organization.  If it doesn’t, the revenue from the Walmart and other local ad initiatives will be scooped up by the biggies who were created specifically to deliver geo-clusters.

    1. October 13, 2011

      Completely agree Tom. Hyperlocal publishers will soon realize that more sustainable business models will result from openly developing promotional resources for their local business community (and that includes the big box chains that many local merchants rail against), as opposed to trying to nickel and dime them to death with ineffective banner ads. A commercially oriented trade association makes sense if disparate publishers can agree to a marketing agenda that includes the big boxes and national chains.

      1. October 13, 2011

        If the “indies”  don’t react as you suggest, they’ll have to make do mostly with 150 x 150 squares, which will cap their ad revenue and prevent them from further developing content that got them started so promisingly.  That would be a shame, not only for local journalism but the communities it aims to serve. 

  2. October 13, 2011

    Great article Patrick! We’re doing what you’re talking about here for 250 retailers: http://www.facebook.com/GroceryServer?sk=app_242168405819781 Specific hyperlocal offers can be shared to your wall. Working on a bunch of these for CPG brands as well… As you point out – people are becoming wary of “empty” brand advertising. They want real, actionable information.

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Street Fight Daily: 10.13.11