2012′s rush to capture the hyperlocal audience has begun to wane as the reality sets in that while the online SMB market is huge and untapped, it remains hard to get those mom and pop outfits to spend money on newfangled marketing methods. Last year’s intense start-up activity has pointed to four trends going into 2013:
–Local no longer revolves around online news sites; channels connecting SMBs to consumers have multiplied.
– Banner ads are no longer cost-efficient for SMBs.
– Local media needs to retool client relationships, moving from “advertising” to “marketing.”
– SMBs must start building brand advocate networks in lieu of advertising.
1) Decentralization of local media hubs
Up until now, the online sites of local newspapers (and to a lesser extent online TV) have been the main media hubs for local communities. These communities (including arts organizations, civic groups, causes, and businesses) would route their marketing, advertising, and PR through these hubs and either hope or pay for publication. These entities are now shifting to content marketing and social media to publicize their events, and asking media hubs to link to them. Every tweet or status update they make points to their content. This newly created local content will become metatagged, curated, and aggregated by a growing set of community publishers.
Local is no longer confined to just news, and news is only a piece of the local content explosion. The fragmentation of local media channels give SMBs and community groups more options to build their own local media presence and directly engage with their followers. One innovative example: Real estate agents can leverage their Airbnb rental listing by producing and sharing their own neighborhood guide through Airbnb for relocating homebuyers — even offering their place for those who become clients.
In the coming years, we’ll see new local content in the form of commercial directories like ShopNear.Me and GatherLA.
2) End of the local banner ad
A quick perusal of Patch and other local mainstream media news outlets will reveal a few banner ads featuring local businesses, but a lot of national and ad network buys. In particular, you’ll see “interest-based” advertising that parses users’ browsing behavior and serves up ads matching their presumed needs. (First-time viewers might be amazed to see ads for products they were researching moments earlier.) Local news sites like these kinds of ads because they provide contextual utility to their readers and, from an “all money is green” revenue perspective, it really doesn’t matter whether the ad is local or not.
Google Display Network is the leading platform for interest-based ads, but Facebook and Twitter have similar products, often described as “native” advertising, that inserts ads disguised as content into time lines. Although far less grating than in-your-face banner ads, interest-based and native ads are still advertising, and I think consumers are savvy enough to recognize (and even resent) when they’re being tricked into clicking on them. The operative principle behind the ad network model is automation; advertisers can purchase ads via self-service applications and know they will be directed to a relevant targeted audience.
3) Replacing local media sales forces with ad networks and marketing talent
Maintaining sales forces to pound the pavement has always worked in theory because face-to-face relationships are prized by SMBs. Internet disintermediation of this labor layer was always inevitable, however, and it’s evident Patch and other media are using ad networks to fill their inventory with more bang for the buck. Many ad networks like BuyAds.com support self-service applications that allow SMBs to make media buys direct from publishers, making ad reps more expendable.
One only needs to see the crash in newspaper ad revenues over the past decade to recognize that the proliferation of new marketing options is crippling the traditional ad buy. Gannett’s purchase of social marketing agency Blinq Media last year is one more example of how media is changing its role from advertiser to social marketer. Ad agencies have also been grappling with the same problems of remaining relevant as marketing shifts its focus from Super Bowl campaigns to digital strategies. I expect 2013 to be the year media makes the leap into agency territory by transforming its services from a transactional to a consultative marketing partner for brands and SMBs.
4) The building of brand advocate networks
A recent Nielsen survey confirms what most people would accept as gospel now: Anything perceived as advertising is far less credible than peer reviews. Getting others to bat for your brand, whether by amassing Yelp and Foursquare reviews or being included into top 10 lists, provides incremental, beneficial marketplace visibility. The branding objective is the same one 1960s Madison Avenue used to promote TV commercials: making sure everybody has heard of you. As long as the reviews are solid, the more, the better. The new strategy for SMBs is to build advocacy across all local networks. The usual suspects — Google Places, Facebook Nearby, Foursquare Lists, Yelp Timeline — understand how review systems engage users and foster stickiness, and they are making it easy for users to +1, like, leave a tip, or review SMBs. And 2013 will be the year when the local start-up community and agencies alike focus on 1) getting brands recognized across the entire social media landscape, and 2) recruiting and nurturing advocate networks for brands.
It’s worth noting that news organizations lag behind in building any kind of advocate network; they publish barren user review systems and aren’t nurturing users who regularly comment on news articles. On most online news sites, each commenter seems to exist in a vacuum. All they need to do is consolidate the commenters into a Disqus-like social network similar to what CNN has done. Then media can identify and assemble reviewers across topics — film reviews, restaurant reviews — and provide their brand clients advocate groups for, say, movie or restaurant openings. I think mainstream media will give newfound respect in 2013 to their reader base and integrate them more into the news interpretation, content creation, and user-review systems.