For the New Business Models for News Project at CUNY a key model we want to build is hyperlocal.
There are, of course, many views of hyperlocal and it will involve many different kinds of players, from sole bloggers to news organizations. The way I’d like to attack this is to try to create one or two optimal models for sustaining coverage in a towns, or collection of small towns, or neighborhoods in a city – the size of critical mass of the ideal minimarket is itself a key question.
I can anticipate Bob Wyman, one of the most valuable commenters here, scolding me for limiting myself to a traditional, geographically based structure. I wouldn’t argue. We will need many models that focus on coverage of shared interests as well and that will intersect with local services. But I’m starting here because the analogue is something we understand so well.
A key assumption that underpins my optimism for the future of news is that there is a new population of highly targeted (by geography or interest) businesses who never were served by news organizations that were to big, expensive, and inefficient. We will need to serve them in new ways – no longer selling scarcity in banners for eyeballs but in creating new services that help them succeed, in acting as a platform for their success. That brainstorming will be an important element of the project.
Note also that this set of models will feed into another set looking at this from the perspective of a metropolitan area, what we call the Philadelphia Project (i.e., what fills the void if and when its papers die); that will be the subject of an upcoming post. [I know, Bob, I’m still holding to old geographic models but after we plow through these, we’ll start working on national and international marketplaces of content and communities and they, too, will feed into these models).
One more note: I keep calling these models but they’ll really be more strategic plans. “Model” brings to mind a single spreadsheet describing a very finite business. The aim of these plans is more to show possibilities, to draw out specifics, to encourage further development and investment.
The first step in working on each of these models is to gather data. Here, I outlined a list for the discussion about paid content. Now, I’ll outline a starter list of information to collect about a hyperlocal market.
Experience: We’ll be grateful for every example you can give of local sites serving a small area (that is, smaller than a city) with basic metrics: size of the market, unique audience, pageviews, kind and mix of advertising and number of advertisers, revenue. We’ll also want to know the competitive landscape online: Is there a local weekly? Are there multiple blogs? Bulletin boards and forums?
Content and service: What kind of content, service, and conversation work? What does a local community really need in terms of coverage? How specialized does this get (e.g., mommy blogs)? What services could be needed (e.g., enabling people to schedule meetups and events)? What does a hyperlocal craigslist look like?
Market size: Out of this, we’ll want to start developing a picture of the elemental unit of hyperlocal: critical mass sufficient to build a site big enough to succeed. We’ll also want to try to get to definitions of local – town, neighborhood, county, group of towns (what do people mean when they say local; what do advertisers mean?).
Present advertising market: How much do local advertisers from the minimarket spend today? What is the proportion of larger advertising in the market attributable to the audience in this market (that is, if a network of hyperlocal sites competed with, say, a newspapers, how much is the potential for each member)?
Potential advertisers: In a given sized market, we’ll want to get a census of the possible advertisers: how many by category, whether they advertised before (newspapers, yellow pages, etc.), what they’re doing online (web site, Google ads, etc.). The more we can learn about
Advertisers’ needs: We will need to talk with local advertisers to find out what their needs are. As I said, they’re not going to be met by banners and CPMs. Do they need help on the internet and even with SEO (that was one conclusion of the revenue panel at our conference on New Business Models for News in October)? What other services could a local service or larger network provide?
Network potential: I don’t think a lone hyperlocal blogger in a town can reach optimum value with revenue just from that town. It will need to be part of a larger network (this is where it dovetails with the Philadelphia Project)) both to receive revenue from larger advertisers (the BestBuy gambit) and to have the ability to sell hyperlocal advertisers into a larger network (e.g., a store that draws customers from multiple towns).
Other revenue: Are local services finding any other revenue? Selling goods or services? Holding events?
Sales methods: With a finite population of advertisers, newspapers and broadcasters did very little selling (they’ll argue with that); they maintained lists. In reaching and serving new advertisers, we need new methods and need to be concerned about scale and efficiency. I’ve talked a lot about citizen sales. We also need to hear what’s working and not: telesales, direct marketing, automated online offerings, etc.
Pricing: What do we know about pricing new models to very small local advertisers?
Contributions: I’m favoring for-profit models but, of course, there are many local services supported by contributions. How much have they been able to get?
The value of volunteering: This is the hardest to calculate but is critical to the local models: People are contributing to the newssphere because they want to, because they care. With help, I’m confident they’ll do more. That’s part of what we’re trying to discover at CUNY in our work with The Local at the New York Times: how communities can be supported to report on themselves. This could be podcasting a school-board meeting or crowdsourcing projects or looking up records. This, like new ad models, will be the subject of some speculative brainstorming. And it will be difficult to put numbers to it. But it’s critical.
That all looks large and complicated, but in the end, our work on this model – this strategy – may look as simple as creating optimal scenarios for The Local or a local blog like Baristanet to succeed: maximum revenue from many sources to support maximum coverage.
[I wrote this on a plane ride and have no brain left so I apologize for typos and missing links; I’ll followup with those.]