Indie Hyperlocals Can Escape ‘Doom’ By Banding Together

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Hyperlocal news is “doomed.” That was media commentator and analyst Bob Garfield’s verdict on hyperlocal news sites. Or, rather, that was how his verdict got reported in, ahem, “the media.”

Garfield, the longtime and often-quoted contributor to Advertising Age and NPR, was billed as the keynote Cassandra at Borrell Associates’ recent Local Online Advertising Conference in New York. But Garfield’s Cassandra comment, unlike the original from Greek mythology, was nuanced — so nuanced, it seems, that his detailed qualifications were missed or glossed over in reports of what he said.

I don’t have a transcript of Garfield’s keynote, but in the earlier interview with Borrell’s EVP Pete Conti that these reports referred to, here’s what Garfield said: “The future isn’t in hyperlocal per se, as stand-alone operations. … The answer is going to be in consolidation. … I believe the answer will be the entity … whether it is a series of hyperlocal sites banded together … to form strategic relationships for content and revenue with other players in that market … They win, they scoop the pot.”

Over the next few years, I think the word “consolidation” will end up being attached to more stories about hyperlocal than “doomed.”

The just-announced demise of the Chicago Independent Advertising Network would seem to suggest just the opposite. But ChiAd was a feeble attempt at consolidation.  The network consisted of 15 partners, most of them hyperlocal sites, that could barely muster 1 million ad impressions among them. Ad agencies and their clients were not impressed.  Cold-shouldered by the Chicago advertising market after launching last November, ChiAd decided it needed to get serious about consolidation. “We’re going to work on expanding the network,” business manager Mike Fourcher, publisher of the Brown Line Media hyperlocal properties on Chicago’s North Side, told Street Fight last month. “We need dozens upon dozens” of new partners.

It turned out to be too late for ChiAd to get serious enough about consolidation that the business would be viable.

In another metro market, Sacramento, the region’s hyperlocals have been very serious about consolidation since the creation of the Sacramento Local Online Advertising Network in December 2009. The founders of SLOAN, led by the Sacramento Press, did their homework.

First, they got together in big numbers – now more than 60 – and in a market that is 1/10th the size of Chicago’s, where ChiAd had a mere 15 partners.

SLOAN partners, with the help of Adify, built a “best-of-class technology platform” to tell potential advertisers where they could find their desired demographics by ZIP Code and time of day and even by targeting consumer behavior. This was the kind of data that ad agencies and their clients wanted from ChiAd. But even if ChiAd had that information, it would have been, in effect, useless because it would have represented too small of a slice of the Chicago consumer universe.

Because it got serious about consolidation, SLOAN is a thriving network of independents whose advertising revenue keeps heading upward.

Unfortunately, though there are literally thousands of independent hyperlocal sites in the U.S., there are too few ad networks that have got as serious about consolidation as SLOAN’s partners. If indies don’t do so, and soon, Bob Garfield may start sounding like the original Cassandra. And the “doom” headlines may turn out to be right on the mark.

Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is developing a Web site to rank communities on their livability across 20-plus categories. The rankings will be dynamic, going up and down daily as they are updated through a combination of open data, journalism and feedback from local experts and users of the site.

Image courtesy of Flickr user psmithy.


Related Street Fight content: Bob Garfield Is Wrong About Hyperlocal — Here’s Why