Attack of the hyperlocal outsiders

When I write that the real Media 2.0 business disruption for broadcasters is the personal media revolution fueled by outside internet pureplay companies, the assumption is that these people are after local advertising dollars. Gordon Borrell projects that as overall online ad revenues continue to increase, the split between local and national dollars will reach parity by 2009 (it’s about 70% national currently). In order for that to happen, local ad spending online will be exploding, and while this is good for local media, it’s also a target for the Googles, Yahoos and MySpaces of the world.

The big boys are either doing this themselves or buying up smaller companies who’ve created nice applications for the local space. Everywhere I look, I see new businesses springing up that are built to appeal to people at the local level, and this is a very dangerous proposition for incumbent local media players — many of whom think we have time to sort all of this out. We don’t.

One new entry into this space is Outside.in, a wonderfully conceived piece of software that has the potential to really disrupt local media. I’ll let my visionary friend George Johnson tell you about it:

It’s built around many of the driving principles and tools of the social web: blogs, geographic and category tags, providing users with tools to generate results that are as specific and relevant as possible, and the recognition that content, specifically hyperlocal content, has a long tail. The last conceit and core principle of outside.in is the most compelling part of the application. Johnson (founder Steven Johnson) explains:

Local news often has a long-shelf life. One thing both blogs and traditional newspapers share is that they are organized around time, with the latest news given priority. But a lot of neighborhood information is news that stays news: a parent’s comment about the science program at a local school is just as relevant six months after it was posted; a guide to gay-friendly bars could be useful for years. That’s why outside.in is designed not just as a “latest headlines” service; it’s also an evolving neighborhood encyclopedia, capturing all the things that have been said about specific places.
Outside.in aggregates hyperlocal content (posts written by hyperlocal bloggers and tagged by geography)…And…is driven by select content written by authors with specific knowledge of what’s going on in their own back yard and a demonstrated ability to report it in a compelling way whether they’re amateur or professional.

The result is a relevant and engaging experience driven by place.

We had better be paying attention to the thinking behind these types of projects, because it’s pure Media 2.0, and we need to do it better. Outside.in is a very cool piece of technology, but — at least for the time being — it suffers from the same thing that any pureplay local venture must address: the cost of marketing. Local incumbent companies aren’t restricted by this, so we have a (temporary) competitive advantage.

George Johnson, by the way, has his own hyperlocal platform, Until Monday. He’s also behind Buffalo Rising, another local new media site.

Meanwhile, the Financial Times reports that Google will make more advertising revenues in the UK this year than Channel 4, the second largest broadcaster in the country.

The US search engine group would “extract” about £900m in advertising from the UK market in 2006, (channel 4 chief executive) Andy Duncan estimated, compared with Channel 4’s annual advertising income of about £800m.

“People need to wake up and realise that this is not just a cyclical issue. There is deep structural change taking place,” he told the Financial Times.

“If we want to protect the fantastic legacy of UK broadcasting, we need to wake up to this sooner rather than later.”

Broadcasters could not afford to be “in denial” about the “fundamental change” to their industry, Mr Duncan warned, likening the phenomenon to global warming.

The threat to all broadcasters is evident. We either move into and seize Media 2.0 at the local level, or, to paraphrase Ross Perot, the sucking sound we hear will be “our” revenues leaving our markets (bound for Mountain View, CA, home of Google).

And I will say it again: we can spend our resources on multi-platform distribution opportunities all we want, but it doesn’t address the real threat we’re all facing. Remember what my friend Bob Papper from Ball State University says, “Television didn’t kill magazines, because they took their readers; they killed magazines, because they took their advertising.” Think about it.

Comments

  1. Randy Hoffman says:

    What’s your opinion of the WorldNow solution for local television stations? I have nothing to do with WorldNow. I just came across it in my research.

  2. This is one of the areas that has really had me interested for a long time.

    It seems that this will be the ultimate ad machines for whoever wants to market through them.

    Those who capture the local audience will be more difficult to unseat than any company at this time.

    We haven’t even really began to see the disruptiveness until this starts to take place.

Speak Your Mind

*