Will ‘Breaking Promos’ Help Hyperlocals Bring New Customers to SMBs?
I keep harping on news hyperlocals and their search for revenue, I know. But if hyperlocal publishers don’t find more revenue, many of them won’t make it — or in order to survive they’ll have to hunker down and abandon their dreams of trying to make a difference in their communities.
Web entrepreneur Scott Karp has come up with a revenue-producing idea for community news sites that may — just may — refute research guru Gordon Borrell’s verdict (“Advertisers don’t want to be around local news”). Called “Breaking Promos,” it promises publishers the power to give businesses what they seek but often can’t find – new customers.
Karp earlier founded Publish2, a network of publishing systems and platforms that lets sites – mostly from among those created by newspapers – aggregate and curate news from members. In 2010, Publish2 was a finalist in TechCrunch’s 2010 Disruption Champion competition.
Breaking Promos is no less a disrupter. It uses social media, but with what strikes me as an ingenious twist. SMBs have been flocking to social sites like Facebook, where they can set up neat pages about their products and services. That’s fine, but, says Karp, “the only customers they reach are existing ones. They can’t find new ones.” To solve the problem, Breaking Promos lets SMBs create short messages that run on hyperlocal site,s as well as on a widget that can be installed on site pages.
Breaking Promos, when it’s installed on a hyperlocal site, solves another problem created by social media: “There is no one place that consumers can go to see local businesses post, in real time, the kind of simple promotions that they post on Twitter and Facebook,” Karp says on his blog. Breaking Promos is organized by category so the consumer can quickly zero in on a restaurant or nail salon.
To encourage SMBs to shift some of their promotions from the free space on Facebook and Twitter, Karp recommends to publishers they price their Breaking Promos very inexpensively — compared to display ads. Recommended prices are 10 for $10, 40 for $30, 100 for $50, and so on — with the first five promos free. The strategy, he says, is “to get businesses to advertise more, and less expensively.” Sort of like the old, lamented classified model that fattened the profits of newspapers before Craigslist improved on it by offering personal classifieds free.
Karp’s concept sounds terrific, but how do the hyperlocal sites get their audiences, big as they may be, to become those new customers for SMBs? “The sites install a streaming ticker at the bottom of their homepage” that’s crammed with deals, sales and other come-ons” to lure users, including potential new customers, to the Breaking Promos page.
Karp says the fierce competition among SMBs for new customers will keep Breaking Promos pages on sites well populated with offers by retailers and other businesses.
At larger hyperlocals, Karp says he’s working on a plan for ad sales staffs to be incentivized to send businesses to Breaking Promos by their getting a share of the revenue. “It’s a one-time effort that can turn into an annuity,” he says.
Karp’s operation does most of the back-of-the-shop work, including using Amazon Payments for businesses to order and pay for ads. Karp splits revenue 50-50 with publishers. If a publisher resists giving up 50% of the revenue, Karp has this deal closer: “You’ll make money while you sleep.”
The main thing that publishers have to do is promote Breaking Promos. One way for publishers to do that is to go to Facebook’s “Pages” and find SMBs in their market area, and then pitch them with “first-five-free Breaking Promos, Karp says. “They can say, ‘Hey, we’re in the community’” you want to reach.
Karp has only just started picking up customers for the service — one of which is Bakersfield.com, with The Batavian, in upstate New York, coming soon — so it’s too soon to know how successful Breaking Promos will be. You’ll know when that happens – when I quit harping on hyperlocals needing to find more revenue.
Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites built around how communities rate in livability. Local America was recently featured on Reynolds Journalism Institute’s Pivot Point site.