Hyperlocals and Scale: How a ‘No-No’ Can Be Turned Into a Win-Win

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local_yokel_media_1“Local doesn’t scale” is the mantra of many independent community news sites. Based on the recent wrenching experiences of some major corporate hyperlocal networks, that may be the case on some level.

But what about the view from other end of the telescope — of advertisers everywhere seeking to target consumers down to the neighborhood level? This perspective is the focus of Local Yokel Media. CEO and founder Dick O’Hare, who spoke to Street Fight recently about how scale can be a win-win for both hyperlocal sites and the biggest advertisers.

Local Yokel contends that a hyperlocal news site all by itself is a great way for advertisers everywhere to target their consumers versus search engine marketing. Some industry experts say that’s impractical. Explain.
Advertisers will reach many more of their consumers through a community website than through search alone. They will also benefit from a combination of contextual relevance (i.e. an ad that is highly relevant to the context of the page it’s being viewed on) and the consumer’s proximity to their business location. Content context and consumer proximity have been proven to drive significantly higher ad performance compared to other methods of local targeting. We call this geo-contextual relevance, and delivery of geo-contextual relevance at scale is what Local Yokel Media offers larger advertisers.

By building a bridge between larger advertising budgets and this highly valuable, performance-driving hyperlocal content, we are helping solve the problems many hyperlocal publishers are experiencing when it comes to securing higher-paying ads. This bridge makes it efficient for larger advertisers to reach neighborhood-sized markets.

If this is true, why aren’t more regional and large businesses and their ad agencies and the exchanges sending more ads to community news sites?
The lack of standardization among hyperlocal websites when it comes to pricing, ad sizes, reporting and even traffic measurement are what, in our experience, has made it too inefficient for larger, more sophisticated online advertisers with healthy media budgets to consider hyperlocals in a media plan. We recently spoke to a large, national retailer who tried to assemble hyperlocal websites to target for their store launches. It was a pain point for them.  On one hand, they see the value these sites provide as authentic advertising vehicles immediately surrounding their store locations, but it is just too inefficient for this retailer to do all this work to execute hyperlocal media buys on so many sites. This is one of the major reasons we think hyperlocal publishers have struggled with sustainability to date, and we’re hoping to change that.

Display advertising with larger advertisers offers hyperlocal publishers incremental revenue opportunity that can significantly bolster their bottom lines.

 You emphasize “trusted local content.” But while building trust, should a community news site not only deliver “hard,” useful news but also stories that make the user laugh, reminisce and have other emotional reactions? And are enough community sites delivering this “high-low”-type content?
We believe in general that hyperlocal content reflects the fabric of the communities they serve.  So, yes, the kinds of emotions you mention above would reflect the spirit of a community. It’s not all about hard news 100%. It is writing about issues that a community cares about and what affects how people live in that community.

Affluent suburbs, in general, have residents who like to read about their community and are, as well, consumers with a lot of discretionary income. Are these communities where the entrepreneurial, would-be community publisher should plant his or her flag?
In general, all communities need information, news, etc. about where they live. However, marketers tend to place themselves in geographies with greater affluence and therefore, the advertising environment tends to be more robust in these geographies.

Millennials are not big fans of news, at least according to Pew Research, but they’ll be the majority of the population in a matter of time. What do community news sites need to do to turn millennials into users, and engaged ones as well?
Community sites should use global trends in digital publishing and consumption of digital content as a guide in delivering their own content, both in terms of format and platform. They need to be nimble and responsive when it comes to adopting and rolling out new technology, to make sure their content is accessible in a way that is consumable by millennials – and beyond.

What about analytics — do community publishers use them the way they should?
The short answer to this is no, but we believe this is simply a matter of education.

Local Yokel promises local publishers “premium paying ads.” With such a glut of inventory that drives the price of ads down, how do you deliver on that promise?
The advent of the ad exchange has led to the perception that there is a huge volume of inventory (ad impressions) now easily accessible in the market. However, all this inventory is mostly now being purchased with data targeting and bid on in an auction environment on an impression basis.  That in turn has devalued premium publisher content as an advertising environment.  Unfortunately, this has also put downward pricing pressure on ad inventory as a whole. The true punch line to all this is the high degree of poor quality inventory in ad exchanges (from poor quality sites), not to mention the issues with fake, robotic traffic lurking in these venues as well. This all adds up to too much poor quality ad inventory in the market and not enough premium inventory. And, marketers care about premium quality inventory.

We believe hyperlocal content represents high premium inventory. And, our marketing partners have full transparency on what they are buying. The websites they “buy” directly through Local Yokel Media are custom assembled for their target markets. This drives more value and better pricing for our publisher partners. And, we are working hard at scaling this model quickly.

We hear a lot about how independent sites should network with each other. Does that fit in with what Local Yokel does?
Yes, in fact this is the core of our business. We aggregate, organize and monetize (at better rates) hyperlocal websites and content on a national scale.

The leadership among “indie” sites likes to say that “local doesn’t scale.” Is it possible to combine scale and content that lives and breathes local?
Yes. That has been a long standing perception with local. Our belief is that authentic, local content starts at the local (grassroots level) written by folks who live in and report on their communities. Scaling this offering requires the right standards and mechanisms in place.  We believe we have built that with Local Yokel Media. We are building a classic marketplace model.  The more hyperlocal scale we can deliver, the more valuable we are to larger marketers. And, the more marketers we bring to the table, the more valuable we are to our publisher partners.

Is Local Yokel gearing up any new strategy in anticipation of an evolution, or perhaps revolution, in community digital platforms?
Our biggest short term initiative is mobile. We anticipate having a mobile solution in place for publishers and marketers in Q1, 2014.  As you know, mobile traffic is growing immensely. Local publishers are looking for partners to help them monetize their mobile inventory and marketers are asking for mobile solutions. Our targeting methodology will remain the same in mobile—targeting geographies via valuable publisher content addressing those geographies, but we will just become device-agnostic as to how consumers are consuming that content.

Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.