Hyperlocal: Good For Readers, Advertisers

As traditionalists readily blast the Internet for journalism’s supposed demise, a panel of industry experts said Monday they believe that hyperlocal news websites not only are economically feasible — but could deliver a better product for both content and advertisers to boot.

“We could end up with better journalism,” said Jeff Jarvis, director of the City University of New York’s interactive media program. By tapping reporters and contributors who are more integrally involved with — and accountable to — the communities they cover, hyperlocal sites could raise the bar for the kind of news content — and news sources — people care about, Jarvis said.

Hyperlocal sites also are particular draws for advertisers that would not normally buy pricey media spots, as well as those more interested in building relationships with customers than getting them in the door, he said. They key, he said, is that creating advertising revenue is no longer about making simple sales, but creating opportunities for consumers and local businesses to engage on a more meaningful level.

“It’s not about selling inventory anymore,” Jarvis said. “It’s about building a relationship with the community.” Journalists also would have a role in adding value to their content, he said.

Jarvis’s comments — made at the “Turning Hyperlocal into Hyperprofit” panel at Borrell Associates’ Local Online Advertising Conference in New York — reflect his ongoing research into hyperlocal sites business models, which he says shows the concept’s profitability.

Under Jarvis’ models — which tout creating networks of hyperlocal sites as well as a new incarnation of news organization that encourages cross-promotion and content sharing — the payoff could be relatively big.

A hyperlocal site serving a community of 60,000, for example, could bring in about $200,000 a year, he said.

The real future of the business, though, he added, is in creating networks of hyperlocal sites, which give sites the ability to share content, ads and distribution. A network of 94, for instance, could become a $20 million business in just three years, he said.

While Jarvis was the panel’s keynote speaker, he was not alone in his role as a proponent of going hyperlocal.

A panel of four interactive media executives, all involved in the creation and promotion of hyperlocal sites, also said they are firm believers in the ultimate profitability of going local based on the concept that such sites are not as much properties but platforms for content and opportunity.

The McClatchy Co., for example, already is bringing in about $200 million a year in interactive revenue, about 16% of the company’s overall ad dollars, said Chris Hendricks, McClatchy’s VP of interactive media.

The growing success of McClatchy’s 12 hyperlocal sites, which are in places like Miami and Charlotte, is based on a model that uses both professional and amateur content providers, meaning professional news coverage could appear on-line alongside bloggers’ and vice versa.

Raleigh, N.C.’s share.triangle.com shows how successful such a concept can be in creating a lively on-line community of content and exchange. About 12,000 photos alone have been posted on the site, Hendricks said.

Fisher, the Seattle-based broadcasting company, also is having success with its 109 hyperlocal sites, claiming more than 1,000 advertisers that were not previously buying TV spots, said Troy McGuire, VP of news and GM of Fisher Interactive. “This is a totally new revenue stream for our company,” he said.

The appeal of Fisher’s site, he said, stems from them providing important national and regional news down to the tidbits of neighborhood news of interest only to those affected by it.

“The whole goal is to be more relevant in the markets we serve,” McGuire said. Whereas 80% of daily news items rarely made TV broadcasts, they often now find homes on sites serving communities that care about them.

“It’s changed the way we do news,” he said.