4 Hyperlocal Trends to Watch in 2013

2012’s rush to capture the hyperlocal audience has begun to wane as the reality sets in that while the online SMB market is huge and untapped, it remains hard to get those mom and pop outfits to spend money on newfangled marketing methods. Last year’s intense start-up activity has pointed to four trends going into 2013:

–Local no longer revolves around online news sites; channels connecting SMBs to consumers have multiplied.
— Banner ads are no longer cost-efficient for SMBs.
— Local media needs to retool client relationships, moving from “advertising” to “marketing.”
— SMBs must start building brand advocate networks in lieu of advertising.

1) Decentralization of local media hubs
Up until now, the online sites of local newspapers (and to a lesser extent online TV) have been the main media hubs for local communities. These communities (including arts organizations, civic groups, causes, and businesses) would route their marketing, advertising, and PR through these hubs and either hope or pay for publication. These entities are now shifting to content marketing and social media to publicize their events, and asking media hubs to link to them. Every tweet or status update they make points to their content. This newly created local content will become metatagged, curated, and aggregated by a growing set of community publishers.

TopixEveryBlock, Glocal and other local news aggregators compile and present mainstream media as well as data from local services like Yelp, but mostly ignore content from local bloggers and social media commentators who chronicle the community. New hyperlocal start-ups like NextDoor and BlockAvenue, and even Airbnb will contribute more content that defines neighborhoods.

Local is no longer confined to just news, and news is only a piece of the local content explosion. The fragmentation of local media channels give SMBs and community groups more options to build their own local media presence and directly engage with their followers. One innovative example: Real estate agents can leverage their Airbnb rental listing by producing and sharing their own neighborhood guide through Airbnb for relocating homebuyers — even offering their place for those who become clients.

In the coming years, we’ll see new local content in the form of commercial directories like ShopNear.Me and GatherLA.com that provide local designers an online marketplace. Restaurants create Pinterest boardsFacebook pages, and post Foursquare updates to showcase their menus, events, and specials, which, in turn, are curated into boards and lists by both media and individual users. Creating useful, shareable content is the essence of content marketing, and it makes simple banner ads pale in comparison.

2) End of the local banner ad
A quick perusal of Patch and other local mainstream media news outlets will reveal a few banner ads featuring local businesses, but a lot of national and ad network buys. In particular, you’ll see “interest-based” advertising that parses users’ browsing behavior and serves up ads matching their presumed needs. (First-time viewers might be amazed to see ads for products they were researching moments earlier.) Local news sites like these kinds of ads because they provide contextual utility to their readers and, from an “all money is green” revenue perspective, it really doesn’t matter whether the ad is local or not.

Google Display Network is the leading platform for interest-based ads, but Facebook and Twitter have similar products, often described as “native” advertising, that inserts ads disguised as content into time lines. Although far less grating than in-your-face banner ads, interest-based and native ads are still advertising, and I think consumers are savvy enough to recognize (and even resent) when they’re being tricked into clicking on them. The operative principle behind the ad network model is automation; advertisers can purchase ads via self-service applications and know they will be directed to a relevant targeted audience.

3) Replacing local media sales forces with ad networks and marketing talent
Maintaining sales forces to pound the pavement has always worked in theory because face-to-face relationships are prized by SMBs. Internet disintermediation of this labor layer was always inevitable, however, and it’s evident Patch and other media are using ad networks to fill their inventory with more bang for the buck. Many ad networks like BuyAds.com support self-service applications that allow SMBs to make media buys direct from publishers, making ad reps more expendable.

One only needs to see the crash in newspaper ad revenues over the past decade to recognize that the proliferation of new marketing options is crippling the traditional ad buy. Gannett’s purchase of social marketing agency Blinq Media last year is one more example of how media is changing its role from advertiser to social marketer. Ad agencies have also been grappling with the same problems of remaining relevant as marketing shifts its focus from Super Bowl campaigns to digital strategies. I expect 2013 to be the year media makes the leap into agency territory by transforming its services from a transactional to a consultative marketing partner for brands and SMBs.

4) The building of brand advocate networks
A recent Nielsen survey confirms what most people would accept as gospel now: Anything perceived as advertising is far less credible than peer reviews. Getting others to bat for your brand, whether by amassing Yelp and Foursquare reviews or being included into top 10 lists, provides incremental, beneficial marketplace visibility. The branding objective is the same one 1960s Madison Avenue used to promote TV commercials: making sure everybody has heard of you. As long as the reviews are solid, the more, the better. The new strategy for SMBs is to build advocacy across all local networks. The usual suspects — Google PlacesFacebook NearbyFoursquare ListsYelp Timeline — understand how review systems engage users and foster stickiness, and they are making it easy for users to +1, like, leave a tip, or review SMBs. And 2013 will be the year when the local start-up community and agencies alike focus on 1) getting brands recognized across the entire social media landscape, and 2) recruiting and nurturing advocate networks for brands.

It’s worth noting that news organizations lag behind in building any kind of advocate network; they publish barren user review systems and aren’t nurturing users who regularly comment on news articles. On most online news sites, each commenter seems to exist in a vacuum. All they need to do is consolidate the commenters into a Disqus-like social network similar to what CNN has done. Then media can identify and assemble reviewers across topics — film reviews, restaurant reviews — and provide their brand clients advocate groups for, say, movie or restaurant openings. I think mainstream media will give newfound respect in 2013 to their reader base and integrate them more into the news interpretation, content creation, and user-review systems.

Patrick Kitano is a founding principal of Brand into Media, a strategy group for social brand management solutions, and administrator of the Breaking News Network, a national hyperlocal network devoted to community service. He is reachable via Twitter (@pkitano) and email (pkitano@gmail.com).

  1. January 3, 2013

    Very good points. I am interested to see how point #3 will play out in markets like mine (many mom and pop businesses in a semi-rural resort/retirement community) as far as the role of sales reps. The less presence that decision-makers have at their actual businesses, accelerated by cell phones & telecommuting, the harder it is for shoe leather to connect with them. The more forms of communication there are (land line, cell phone, email, SMS, etc. ) the more prospects ignore sales communications. So far I have found the best way for my reps to close deals is networking. The question is, until small mom and pops develop the expertise to buy ads through networks (or pay someone to do it), sales reps are necessary, but their job gets harder and harder for less and less payoff.

  2. January 3, 2013

    Nice post. I mostly agree with all your points but also believe there remains a lot that is yet unknown about how SMB’s (particularly very small businesses) will most effectively take advantage of the digital/social media revolution. I’ve seen a lot of little local businesses spend too much money on consultative services like SEO and or custom Facebook pages (remember those). I preach reach, relevance and repetition as the keys to effective marketing and I believe that local networks – whether news or otherwise – provide all three in a more targeted, measureable and cost effective way than any of the national networks.

    1. January 3, 2013

      Jim, I’ve seen the same problem in my market with VSB’s being bamboozled into putting all their eggs into the SEO or social media basket.

  3. January 4, 2013

    The building of brand advocate networks is undoubtedly going to be important. The key is being able to effectively qualify those advocates so that their opinions are justified and credible to a community of users that doesn’t know them. There are many issues with the traditional review process that need to be addressed in validating someone’s insight @evzdrop.

  4. January 4, 2013

    Nice way to spin the complete and abject failure of Patch to connect with local communities and sell local advertising — “oh, yeah, we meant to do that … we get more bang for our buck from ad networks.” ha ha.

    1. January 4, 2013

      Yes, I agree, Howard, display ad networks aren’t going to save Patch or anyone. Um, no one clicks on a Toyota ad while reading the local police reports in Dubuque, Iowa.

      1. January 5, 2013

        But the reader in Dubuque will pay attention to the ad for the Dubuque Toyota ad if it’s next to some engaging Dubuque news reports. Good local content and truly local ads work very well together. Of course this approach doesn’t “scale” so that national players (and the pundits dependent on their sponsor dollars) ignore this fact. Being successful in a local market actually turns out to be hard work. That’s bad news for those who think “scale” is the holy grail of business.

  5. January 4, 2013

    Patch is a consumate failure and it’s repeated reference in this article as demonstrating anything in local markets just shows how out of touch the author is with hyper-local. The reality is that hyper-local marketing is so varied in its application that commentary like this amounts to noise. The ability to use, and therefore the adoption of online media to replace sales forces or other traditional marketing is directly correlated to the the areas proximity to a major urban area. The farther you get away, the less likely businesses will use and benefit from the ideas put forth in this article. However I believe the author inadvertently hit on the key which is local news. Whatever your approach to local marketing it all depends on an audience. He who has the locals attention can promote whatever he wants and can make money off of it. No one has cracked the puzzle yet but that doesn’t mean the answer isn’t out there.

    It is a complex ecosystem but to cast broad terms on a complex system doesn’t do the challenge of marketing in that ecosystem justice.

    1. January 4, 2013

      I agree 100%, and the question is, how long and how much do producers of local content have to bleed until the magic elixir which can monetize those eyeballs appears?

  6. January 5, 2013

    StreetFight’s banner should not read “Inside the Business of Hyperlocal.” To be more accurate it should read: “How Can Big Digital Media Corporations Muscle Their Way Into Local Communities And Bleed Them of Money?” That’s all that ever seems to be of real concern to this website’s bloggers. This post is just more evidence of that biased point of view.

  7. May 26, 2015

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