As 2011 draws to a close, it’s clear that it’s been a pretty momentous time for hyperlocal businesses. Between Patch’s rapid expansion, the explosion of the daily deals industry, Groupon’s IPO and the demise of Gowalla (to name a few), there have been plenty of intriguing developments and big stories since Street Fight launched in April.
Looking toward next year, we asked a few hyperlocal luminaries to weigh in on what they think will be the biggest story in 2012.
Seth Priebatsch, CEO, SCVNGR/LevelUp
2012 will be the year of the transaction. Broadly speaking 2010 was the year of the check-in. 2011 was the year of “beyond the check-in” — where companies focused on richer forms of engagement; photos, filters, information about the places, adding game elements, location-based deals, etc… 2012 will be all about the transaction. The companies focusing on location-based interaction are going to drive to connect the engagement they can create with the register. Doing this both drives, and tracks, true financial value-add. I don’t think it’ll be all about mobile payments, or POS or NFC or deals or any one concept at all, but rather a global movement to get all LBS interaction as close to the transaction as possible.
Nihal Mehta, CEO, LocalResponse
In 2012, I think more and more consumers are publicly publishing to the web via social media and LBS — Zuckerberg’s law realized. To date, only 5% of adults are actively engaging in LBS, but I believe this number will go up 10-20x, especially with greater realization of “passive” check-ins, where consumers need not actively open an app, select a venue, and “check-in.” These passive platforms include apps that are always geoaware and running in the background, carrier geofencing, credit card transactions, and point of sale/NFC proliferation.
Warren Webster, president, Patch
2012 will be another big, important year for local. Here’s what I think we’ll see: Expanded efforts by Google, Facebook and others to dig down into local communities for news and advertising. A move away from unprofitable daily deals. Adoption of more location-based services and applications. Patch aims to be not just a news provider in 2012, but a local application that makes living life in your neighborhood ridiculously easy. That still means providing the best original local reporting and advertising, but it also means offering simple tools for residents and business owners that will help them navigate all aspects of local life on whatever platform is most convenient — mobile device, TV screen, web and others.
Chris Tolles, CEO, Topix
There’s going to be a lot of right-sizing of daily deals apps, and the daily deals space generally. Consolidation or companies dying. You’re going to see a shaking out of the space of companies that don’t have either the scale or the revenue to proceed. Whether or not it’s reasonable, I think that’s going to be the story six months from now.
When Groupon has a bad quarter, everyone’s going to say “Groupon is dead” — but they’re not going to die. Everyone’s going to be going “this stuff isn’t profitable,” and there’s going to be a shakeout of the other companies who are trying to get funding — and then towards the end of the year we’ll look around and see that everyone who has survived is doing really well.
But I guess the story in the middle of next year is: “Whatever happened to all of the daily deals sites?” The story will be the overcorrection on the high that these guys have had. But once the big guys go out and face the realities of being a public company, a lot of things will change, and it’ll affect the small companies as well.
Eli Portnoy, CEO, ThinkNear
2012 is the year hyperlocal mobile ads go mainstream. For years we have been talking about the promise of mobile advertising; reaching consumers on-the-go with location sensitive messages. This has not happened because most publishers are not passing location in their ad requests, advertisers don’t have the tools to take advantage of location when it is passed, and because the mobile ad market is fragmented and run by ad networks who provide limited visibility to advertisers.
In 2012 all of this changes. More publishers will begin to pass location and see a huge lift in eCPMs. We will see the emergence of tools that will give advertisers control and visibility as to what they are buying. All of this will result in everyone from major brands to local businesses running hyper-local mobile ads.
Ben Ilfeld, CEO, Sacramento Press
2012 will be the year of scale in hyper-local. The scale I refer to is: small. Existing local indie online publishers will take center stage as many more will become profitable.
An army of new entrepreneurs will have more access to resources and networks of support. Technology will continue to obliterate barriers to entry in media. The next wave of innovators in the space will be from — everywhere. Their innovations will be as surprising as they are important. Sorry Street Fight, covering hyper-local will be harder than ever. Solutions for hyper-local will start small.
Prashant Nedungadi, CEO, NimbleCommerce,
1. Daily deals as a marketing program will go mainstream, with most publishers joining in.
2. Pricing will evolve toward a hybrid of performance- and impression-based models.
3. Performance-based local marketing programs will expand to address the needs of a broad range of local merchants such as plumbers, roofers, and auto mechanics.
4. Deal platform providers will consolidate and become larger and more scalable.
5. Peer-to-peer sourcing networks will allow publishers to share deals and propagate them to a broader audience.
Got a prediction of your own? Let us know about it in the comments.