Facebook’s announcement yesterday of its entry into the “check-in” space is yet another blow to local media. Local businesses — many of whom already are deep into Facebook — are now being encouraged to create their “places” pages, which is what users will see when they check in via Facebook. Why is FB doing this? The gold in the hills of local advertising.
By creating a brand new directory of local businesses, FB can monetize it a hundred different ways. Already projected to make $1.3 billion in advertising next year, I fully expect that number will be much bigger, as it begins to suck advertising dollars from the local marketplace. What will local media companies do to respond? Sell more banners on their brand extension websites?
Technology has allowed anybody to do anything online for years now, but local media companies have refused to use any of it to create new value for themselves. Why is a mystery and a failure at the top of company leadership.
Facebook is already “local” in the way it is used, and local advertisers are well aware of this. By entering the check-in space — and creating landing pages for local advertisers — the company is exploiting its “localness” to not only create a rich experience for fans but also make money. The company is also opening its doors to the two top players in the space, Foursquare and Gowalla, in so doing. Brilliant.
Local media companies who insist that content is their business are going to have great difficulties sustaining that downstream. In this week’s Media 2.0 Intel newsletter, I offered five things companies can do today to begin creating new value. It seems appropriate to repeat that here.
- Data is a big part of the future, so start building databases. Begin with identifying and defining the Local Web. If we must attached an immediate purpose to it, then build a simply application that searches the database. The point isn’t to create an immediate revenue generator; it’s to build new value, and trust me, there’s value in databases of knowledge.
- Build networks of people, beginning with a loyal amateur journalist following. Equip them with knowledge. Invite their participation in what you do. Build blogs for them, if that seems smart, and aggregate their content. Show them how to shoot and edit good video. Always be recruiting new members into your group, for they will become your eyes and ears in many ways downstream.
- Build networks of websites for advertising. We recommend a horizontal ad network that serves the whole market, but vertical ad networks are there for the taking, too. Is your market home to big regional medical facilities? Create a vertical ad network to serve that community.
- Teach advertisers what you know and how to do what you do. The reality is that anybody can function as a media company today, and who better to teach the amateurs than the professionals? If advertising is content in the new world, then there’s a market for teaching advertisers how to make content. Who should have a YouTube account rich with videos related to its business? Everybody.
- Create an online video archive business that offers uncut video to those wishing to make their own shows, films or whatever. There is a market for this, because the shift to personal media is only going to get stronger, and you can create new value for your company by repurposing some of your old, raw footage. Assign somebody as keeper of this and pay them a cut. It’ll pay off downstream.
At the highest level, companies need to reward new value creation as much as they do meeting revenue goals. Otherwise, the emphasis will continue to be on making money with what we have, and that’s just not going to work in the long run.