Four trends in Hyperlocal for 2013

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2012’s “SoLoMo” rush to capture the hyperlocal audience has begun to wane as the reality sets in that yes, the online SMB market is huge and untapped, but it’s hard to get those mom and pops to spend money on newfangled marketing methods. Last year’s intense startup activity has revealed four trends going into 2013:

  1. Local no longer revolves around the online newspaper; channels connecting SMBs to consumers have multiplied
  2. Banner ads are no longer cost efficient for SMBs
  3. Local media needs to retool their client relationship from advertising to marketing
  4. SMBs must start building brand advocate networks in lieu of advertising

1) Decentralization of local media hubs

Up to now, online local newspapers, and to a lesser extent online TV,  have been the community media hubs. The community – arts organizations, civic groups, causes, and businesses – would route their marketing / advertising / PR through these hubs and either hope / 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. Topix, EveryBlock, 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 startups like NextDoor and BlockAvenue, and even Airbnb will contribute more content that define neighborhoods. Local is no longer confined to just news, 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. We’ll see new local content in the form of commercial directories like ShopNear.Me and 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 banners ads pale in comparison.

2) End of the Local Banner Ad

A quick perusal of Patch and other local MSM news will reveal very few banner ads featuring local businesses, but a lot of national and ad network buys. In particularly, you’ll see “interest based” advertising that parses user 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; there’s one by AdChoices on the right sidebar here on Street Fight). Local news sites like them 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 timelines. Although far less grating than in-your-face banner ads, interest based and native ads are still ads, and I think consumers are savvy enough to recognize and even resent 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) Replace 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. However, Internet disintermediation of this labor layer was always inevitable, and it’s quite evident Patch and other media are using ad networks to fill their inventory with more bang for the buck. Many ad networks like 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 with its customer base. Ad agencies have also been grappling with the same problems of remaining relevant as marketing shifts 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 1960’s Madison Avenue used to promote TV commercials: make 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 Places, Facebook Nearby, Foursquare Lists, Yelp 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. 2013 will be the year when the local startup 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.

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