The Future of Print

Can Anyone Actually Tap the $100 Billion Potential of Hyperlocal News? | Fast Company

Posted in Boom by futureofprint on August 19, 2009

Hyperlocal sites — covering cities, towns, or just a neighborhood — can deliver precision-targeted advertising to local and global businesses. As the once-exponential growth rate for most Internet advertising in the United States grinds to a halt, the online local-advertising market is projected to grow 5.4% in 2009 to $13.3 billion, according to media research firm Borrell Associates.

Boosters routinely note that more than $100 billion is spent annually on local ads — TV, radio, print, outdoor, direct mail, and online. Although the stat’s origins are fuzzy, what’s clear is how aggressively folks believe those ad dollars are migrating to the Web. Borrell Associates projects an online local-ad market worth $15.5 billion by 2013, fueled mostly by small businesses ditching the Yellow Pages and local newspapers.

A Hyperlocal Pyramid

The Times’ executives behind the Local, to their credit, aren’t fooling themselves that they will succeed based solely on advertising — though targeted local and national ads are two parts of the Local’s three-pronged business model. “We’re talking about several hundred thousand dollars a year in personnel costs,” says Jim Schachter, editor of digital initiatives at the paper. “I don’t think the local digital-advertising market anywhere — not Maplewood; not Fort Greene, Brooklyn; not Dubai — would cover those costs.”

The third aspect of the Local’s strategy reveals where the Times sees the most opportunity. If the Local’s test run proves to be successful — meaning that it creates a vibrant content site with an engaged audience — the Times would look to license the Local’s platform to bloggers in other towns as a prepackaged tool kit. “Our hypothesis,” Schachter explains, “is that there is a swath of people — experts of various sorts, journalists, self-trained bloggers — who would want our assistance in professionalizing their work and who would love to be associated with the Times. We could help those people mobilize their communities and gather local-advertising dollars in extremely low-cost ways. That could work, economically, for these local journalism entrepreneurs, and, at scale, it might work for us.”

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