The term hyper-local continues to gain significance in the world of search. Newspapers are using it to describe their efforts to corral readers and advertisers around online communities that are built around interest in the high school box score or the new playground that was built down the street.
For newspapers, this is one of the areas where they have a traditionally held competitive edge with local trust, newsroom resources, and a physical sales force to sell classifieds and other local advertising. The realization of this has caused some progressive publishers to build on these assets to develop competitive differentiation against the Google's, Yahoo's and other news aggregators of the world that are vying for eyeballs and advertisers in the local online space.
I've explored some of the dynamics of the hyper-local world in the past on the Search Engine Watch Blog, and Peter Krasilovsky recently looked at some of the more recent happenings of the hyper-local world on The Kelsey Group Blog.
At the same time, a few online hyper-local pure plays have sprouted up over the past 18 months, mostly led by ex-newspaper execs or ink-stained veterans. These include Smalltown, Backfence, Outside.in, and Citysquares to name a few. They have rallied around various models that include zip-code level news, listings, social media, and citizen journalism. Some have had trouble getting off the ground, and the jury is still out on the sustainability of others. Backfence, for example, has floundered in some respects while trying to scale the destination site strategy to many locales.
In some ways the need to scale nationally is at odds with the strategy to build appeal, trust, and true local flavor on a neighborhood level. Monetization has also proved to be a sizable challenge in appealing to a critical mass of advertisers that are interested in reaching hyper-local audiences.
This challenge is compounded by the lack of a sales force that can compete with other interests that are vying for the same ad dollars such as Yellow Pages publishers and newspapers. This same challenge is faced, to different degrees, by most online destinations seeking to tap into the wealth of small business local advertising historically owned by these traditional media.
Applying a New Model to Hyper-Local
New hyper-local destination Mini-Cities has an interesting proposition to overcome this challenge. The site licenses its brand and technology to allow franchisees across the country to start hyper-local destinations and act as local ad sales reps.
To do this, it has essentially created a starter kit for individuals in far-flung U.S. communities to build hyper-local destinations. In this way, the model is similar to private label platform licensing, but instead of serving the enterprise market, it operates on the individual proprietor level.
If you think about it, this is appropriate for a hyper-local strategy, given that an individual implanted within a given town is likely a better candidate than a remote startup, to run a community site there. This logically rings true with respect to acting as a local authority for editorial content on the site, as well as having many inroads to local advertisers to sell ad space.
Building A Virtual Sales Force
To find the local franchisees to plant the hyper-local stake, Mini-Cities doesn’t require any sales background, according to founder and president Ana Abraham, but rather looks for individuals that have strong ties within their communities.
Once they find these individuals and sign them on, remote crash courses are given in sales training, SEO and SEM – meant to enhance their abilities to run their new community sites successfully. The platform accommodates display ad units , featured placement, paid search, and classifieds, click-to-call, and mobile ad units are on the way. It also offers print directories in some communities.
Franchisees are involved in bi-weekly conference calls to ask questions and also share what they're learning.
"This is kind of like a private think tank that is giving us ideas all the time because they are out in the field doing the work," says Abraham. This is a nice feature, but it could reach scalability constraints depending on how many communities it reaches (a nice problem to have, right?).
And the cost for this local search site toolkit? It's an undisclosed one-time cost and an ongoing licensing fee. Abraham characterizes the cost as well under the $50K mark which is what Entrepreneur magazine defines as a "low-cost franchise," she says. It’s closer to the $20K range.
The Atlanta-based company currently has a handful of communities throughout the South, including towns in the greater Tampa area. Next up is a West Coast expansion to Redmond, Washington, where it just found a new franchisee. The target community, Abraham claims, is between 30k and 70k in population and has an average income level over $65k.
"These are the people who are online looking for local businesses and services, and we know that is true for these communities," she says. "There are so many of these communities out there that represent the undeserved population for information about their own area."
Many newspapers would disagree with Abraham, but she might have a point in the underserved opportunity to scale a compelling online hyper-local experience on a national level, while utilizing local feet on the street.
What Does the Future Hold in Hyper-LocalThe goal going forward is to have ten more franchises in next four months and 50 within the next 12 months, according to Abraham. She also hopes to integrate more functionality to combine Web 2.0 appeal and hyper-local search. These will involve social networking features, blogging, classifieds, mapping, click-to-call, and mobile search.
Most notable of these developments is video, in line with the growing trend in the local search space towards online video advertising. This was most recently seen in Citysearch's integration of small business video ads in its listings, and was examined in The Kelsey Group report out this week entitled "Online Video: A New Local Advertising Paradigm."
"We’ve talked about adding video to business listings," says Abraham. "A lot of businesses want to have commercials, show their products, and show their facilities, but they don’t want to go full TV."
Best of all, for Abraham, her 15-year history as a software product manager gives her an edge in being able to visualize and execute these new product integrations. This, for one, could give her an edge over the notoriously tech-averse newspaper industry.
Combine this with actual feet-on-the-street sales reps in the communities where her hyper-local platform is employed, and she could just have what it takes to scale this up to a sustainable level. We'll see if this new formula can help her succeed where others have faltered.