Here are six trends in 2012 that will impact hyperlocal media and business models. This was originally published at Street Fight last week.

1. Cross platform conversations

Livefyre and Disqus show glimpses of how conversations can move from Facebook and Twitter to online media and blog commentary. Local conversations happening on social media, especially Facebook, simply aren’t crossing over onto local media. Note the interaction on a city community page like San Francisco; it’s huge, but random in topic.

The big opportunity is to organize local conversations that are now happening on, say, the community page above, into topics like sports, culture, movies, things to do, business, family, etc. In 2012, cross platform systems that facilitate community engagement across all social media along these topics will develop. The current best example of local topical engagement is sports media like SBNation and Bleacher Report that encourage sports blogging and fan interaction at the local team level.

2. Influence peddling at a local level

The advent of Klout and other new forms of social influence tabulation mirrors the slow power shift of media influence from traditional to social channels. Anybody with a voice can build a following, and the new business models evolving around influence metrics allow businesses to reward influencers with the hopes of converting them into advocates.

On a national level, social influence has naturally followed the celebrities; Britney, basketball players and Obama come to mind. On a local level, social influence is still up for grabs. Many sports bloggers became part of the SBNation empire simply by being bloggers for their local team. The implied business model is local influencers will attract rewarding opportunities, whether it’s in the form of a media job or simply a perk from a local business wanting to engage them.

The recognition of consumer generated revenue opportunities

A candid consumer recommendation, or a compilation of great Yelp reviews, is far more credible for a business than an advertisement. Local businesses will be able mine and filter local conversations across the social media, and participate in social marketing their services to elicit favorable reactions and revenue opportunities. For example, high school and college students often use Facebook to set Friday night plans. The most influential of them will move crowds, and local businesses, like pizza restaurants and movie theaters, will build relationships with influencers using rewards, loyalty programs, or simply a friendly dialogue.

example: using Needium to create business building dialogue

Startups are developing to provide localized services to filter, monitor and engage consumers on behalf of small business. For example, Needium monitors Twitter for specific keywords and phrases such as “looking for a lunch spot in Union Square”, that signal consumer demand for their local business client, and then converses with Tweeters on behalf of their client. They are basically building a personalized geolocated mobile response system for local marketing.

Local brands move to app development

The rapid adoption to mobile platforms impels brands like Walgreens and Starbucks to create apps specific to the needs of their mobile consumer. Local brands are headed down the same path. Yes, being on Yelp, Foursquare and Google Places provides social visibility but it limits the consumer interaction to just a check-in deal. A local merchant should have its own app complete with loyalty program, special deals, inventory search and topical information that its customers need. Building a mobile app is still beyond the pale of 99.9% of local merchants, and it’s surprising I haven’t seen a startup financed to create turnkey mobile apps for small business.

Emergence of the local social media marketing agencies

The dearth of startups serving local business with mobile app development is indicative of a larger hole to fill: there are still few turnkey social marketing agencies serving the over 4 million small businesses in America. Local business needs turnkey solutions because the resources required to learn, implement and execute a comprehensive social marketing are daunting. 2012 will bring scalable turnkey service companies like Main Street Hub devoted to managing local social marketing for SMBs.

The New Role for Bricks and Mortar

Retailers can’t escape the impact of Amazon Price Checker and Groupon on their business. In-store price checking and daily deals threaten customer retention and profit margins respectively, and they certainly aren’t going away. So how will bricks and mortar remain relevant to, and more importantly, build loyalty from local consumers?

Before social media, the decision to visit a local business was based on personal need. Now, more decisions are based on serendipitous search for things to do, what to eat, where their friends are, and special deals. Bricks and mortar can position themselves to be destinations simply by making sure they are visible, preferably with attractive offers sprinkled here and there, in all the media consumer use to find them. They remain relevant because there are potentially more tangible reasons for people to go out! Foursquare and Yelp check-ins, events planning services like Meetup and Plancast, and mobile location services will be the currency that supplements local traffic to business.

Journalists continue to search for a viable business model that supports online hyperlocal publications, but they won’t ever reach the threshold of revenues to maintain operations if they rely solely on traditional advertising fees from local merchants. That doesn’t mean local advertising is also poised to fall off a cliff. On the contrary, BIA/Kelsey states the prospects for online local advertising will double by 2015, but much of that growth will come from new mobile applications and daily deals category vendors. Here are five reasons why hyperlocal news faces hurdles to profitability:

1) Hyperlocal audiences are too granular to support traditional revenue models. Local banner ads aren’t economically viable. Traffic to online hyperlocal publications is inherently small due to geography, and total ad revenue based on CPM (cost per thousand views) won’t even cover the costs of the ad sales force.

Report on AOL’s hyperlocal network Patch.com’s traffic sourced from Business Insider “Leaked Reports on Patch traffic”

Article comment:

Chris L on Jun 24, 1:18 PM said:

If their page views really are only 783K for a month in So Cal, that translates to less than $5K in revenue for a month. I doubt they can build a sustainable business on that. Revenue = (783,000/1000)*3*$2 Assumptions: $2 CPM (generous) and 3 ad slots per page.

2. Local advertising alternatives are proliferating. Newspapers lost their classifieds revenue to Craigslist. The growing number of pay for performance business models including paid search, daily deals and the new mobile ad applications are cannibalizing media spending. Advertising options will continue to expand for local merchants, leaving a smaller piece of the pie to hyperlocal news.

3. Hyperlocal media resources are proliferating. Traditional media has relegated the business community to being simply the “advertisers” and not involving them in content sourcing. Yet on the local social media, many committed bloggers are the business owners who want to discuss their industry and community, and by extension market themselves. Traditional media needs to incorporate the business community as journalistic partners instead of trying to sell to them all the time.

New community service business models are developing that focus on engaging the community around local news and providing free advertising to businesses, adding further pressure on traditional ad sales. Facebook and other social networks may also evolve into hyperlocal community platforms that center on community sourced and shared news. In sum, hyperlocal news resources will proliferate as alternatives to traditional local media, simply because it’s easier to build these properties now.

4.  Local merchants are learning how to self market using the social media. Roost reports merchants believing it is four times more effective than paid search. Those merchants that can’t do it will be taught or be serviced by local social media / ad agencies, or even the traditional media publishers themselves. Gannett wisely set up GannettLocal.com to engage with local businesses as their social media marketing educator and partner.

5. There is a visible example of an unworkable local media model. Patch.com, AOL’s effort to build a hyperlocal news network from scratch even when local news revenues were falling, demonstrates and even confirms the high hurdles in building a profitable local ad model.

After a year and $150 million, Patch doesn’t seem to be gaining the revenue traction it needs to warrant further investment, and AOL is working with investment bankers on restructuring. The Patch exercise may shut the door on the idea of building a scalable hyperlocal network based on paid content.

The long awaited announcement of Facebook Places this afternoon sure was anticlimactic. The “Check-in” is now institutionalized, and the masses of 500,000,000+ Facebook members can now enjoy what 2 million Foursquare members have been doing. But that was what was expected; the gorilla just tossed its hat into the ring.

The main function Facebook brings to the party is ubiquity:

Ever gone to a show, only to find out afterward that your friends were there too? With Places, you can discover moments when you and your friends are at the same place at the same time. (from Facebook blog)

“Checking in” has essentially been a kind of mindless activity, but its social context makes it meaningful within a massive network, like college students.

The locational media – Yelp, Foursquare and Gowalla, perhaps even Twitter – now become relegated to being the worker bees developing new applications and functionality for the check-ins Facebook will ultimately dominate, just as they are doing with “likes”. With the new Facebook Location API also being launched today, it seems natural for mobile app developers to build for the massive audience of Facebook. It’s up to the locational apps to differentiate themselves with specific functionality – Yelp has business reviews, Foursquare has branding deals with movie studios and other corporations, Groupon has local discount coupons.

The next step – watch Yelp, Foursquare and Gowalla double down on efforts to build the locational commerce applications that provide rewards for check-ins. Groupon has proven the revenue model associated with couponing (Forbes claims it’s the fastest growing company ever), and it’s low hanging fruit.

Get ready for the commercial social media...

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The latest Facebook metrics are powerful: 400 million active users (7% of the world), 50% of them logging on each day and spending more than 55 minutes daily on Facebook.

The sudden concentration of traffic on the social media led by Facebook has caught business by surprise. In particular, small and local businesses don’t quite realize their consumer is now spending a majority of their time on the social media, but they continue to rely on the old online standard: their website. Websites and blogs are critical as marketing collateral, but local businesses need to develop an online marketing presence that spans across the social media ubiquitously.

With all the buzz around Foursquare and Gowalla, why is hyperlocal media suddenly hot? Geolocation is changing the social media by providing nothing more than the tagging mechanism to define social networks by localities. Geolocation facilitates the development of a new, more practical, more intimate Twitter/Foursquare network of friends who just happen to be living down the street. It’s far more compelling to build a social network of folks you can have coffee with than the national networks than generally evolve in Twitter and Linkedin. I myself see this… I am starting to socialize with San Franciscans…

The Hyperlocal Marketing Opportunity

So we’re seeing social apps like Twitter and Yelp quickly adopting location “check-in” functionality, with Facebook in the wings. And this presents a huge opportunity. It’s a no-brainer for local retailers and businesses to see that they need to provide the most effective online venue for their local customers to “check-in” to. The new local “websites” are the Facebook business page, the new local advertising vehicle is the Twitter coupon, and the new reviews column is Yelp.

You haven’t seen them yet, but Facebook is primed to evolve into a massive Sunday advertising circular for local businesses:

And why not? It’s free. Enterprising local media publishers (for example, Breaking News sites) will curate and compile these merchants into local online directories.

Twitter will develop hyperlocal couponing systems that will be online equivalents of PennySaver coupons and Valpak:

And why not? It’s free. Couponing is effective because it is perceived by consumers as “found money” while straight advertising may now be considered “spammy”. You’ll see the advent of new local social media based advertising agencies that will create turnkey Twitter / Facebook / Foursquare couponing campaigns for merchants. And these campaigns will be accepted because online data is more efficient for tracking and analysis than traditional advertising channels like radio / TV or inefficient direct mail offerings like PennySaver. There is a defined ROI.

Conclusion

2009 was the year when the masses found Twitter and Facebook. 2010 will be the year when local business begins to recognize the power of leveraging Facebook, Twitter, Yelp and Foursquare et al to achieve a level of community engagement that standard “one-way message” advertising can’t achieve. It’s about being ubiquitous across the social media so your community of customers can find your services via their preferred channels – Twitter, Facebook, etc.

Related slideshow: Ubiquity marketing (Jan. 2010)

Related webinar: I’ll be discussing “The Impact of Geolocational Media” on the Virtual Bar Camp April 6 at 2:15pm, Room #4. Register and join our discussion.

The title of this blog post took me a long time to figure out, and it still seems a bit off.

Simply put, the social media rewards value and service, and devalues self promotion and advertising. Up to now, most social media marketing methods simply wrap traditional push marketing methods into a new package. Facebook fan pages and Twitter broadcasting deals replicate websites and coupon advertising. In this new age of social media, push marketing appears obvious and may detract from the marketing intent. We’ve been advocating that entrepreneurial business people focus more on delivering valuable services to their community to attract business opportunities. One way to do this is to create local media resources.

The following slideshow describes how to create a new local media brand that leverages the many channels of the social media. The concept is simple: online media brands no longer reside solely on TV, on a website or as a Facebook page. Media brands now span all the channels of traditional and social media. Any local media property that delivers content across a panoply of channels becomes “ubiquitous” to the community. You’re always found. And if you or your company are behind the media brand, you benefit from association.

Social media reinforces the concept of branding because your brand is judged by what you do and who you are online. This couldn’t happen ten years ago, you would have needed to advertise who you were and what you did.

Comcast’s purchase of TV network NBC and movie studio Universal seems backwards to older media veterans who remember the ascent of upstart cable versus the powerful Big 3 TV networks in the 70′s/80′s. It proves that media itself has become a commodity to be digested across a panoply of distribution channels. It just so happens that cable, with its reliable subscription revenue streams and multiple channel assets, now has more financial clout than advertising based network TV and with it, the ability to finance programming through a movie studio as well.

Moreover, TV/cable and Internet are merging towards display across a common TV/monitor display platform. Cable channels pay significant syndication fees to broadcast relevant programming. They are curating content for their audience. However…

Social media facilitates the same content curation done by cable channels. Justin.TV allows anybody to broadcast hit movies (illegally) like a Showtime channel and now, personal broadcasters can get paid for it as a pay-per-view affiliate:

Obviously, copyright issues on Justin.TV seem to fall by the wayside just as they have done on Youtube (Google no longer seems diligent in deleting uploaded copyright content). This tolerance becomes a moral hazard that makes copyright protection unenforceable.

Like other content, video has essentially become free and curatable. For every Hulu, there will be copycat channels. Even Hulu’s exclusive licensed content are easily replicated by screen scraping video software like Camtasia.

Justin.TV’s pay-per-view channels will be the first of a new video revenue model that YouTube (which already announced this intention) and other video channels will follow. Why? Because everybody wants to be a broadcaster.

Big media investment into hyperlocal media properties continues with CNN’s partial investment in Outside.in as reported at Paid Content.org. CNN likely plans to leverage Outside.in content to develop local aggregated news for CNN Local editions. My first thought is why does CNN need a content aggregation service when they can do essentially the same thing with local media sources themselves? If it’s for aggregation expediency, what they need is a content management system.

Look at another other big media play into hyperlocal – MSNBC’s August 2009 purchase of Every Block. So far, the most prolific content aggregated by the small Every Block team of 6+ people are police calls. Most are public civic data. The content is impersonal.

BIG MEDIA’S NEED TO SCALE VS. LOCAL MEDIA’S NEED TO ENGAGE COMMUNITY

Big media’s play into hyperlocal only scales if the data aggregation and curation of news sources can be automated from a back office team based in one office building. The weakness in this virtual local news strategy is the impersonality of syndicated content. The key to connecting with the community audience is on-the-ground staffing, who will also support the marketing push and civic outreach.

Huffington Post is filling the void for coordinating local journalist outreach by tapping TV producer Willow Bay as Senior Editor for their new LA edition . Examiner.com recruits local writers. Big media will eventually realize they need to create a lot of local networks, and not rely on a backroom tech operation, to become viable local media. The one-size-fits-all model for templating local news may potentially position them as Media McDonalds. Existing local media in every city now have a window of opportunity to fortify their brand in the face of the potential onslaught of big media’s local plays.

Google Fast Flip launched today to uniformly good reviews because this is an application that should have existed even ten years ago. It’s like a magazine rack display of major press that uses the “like” feature to push the more popular articles up.

So why didn’t the packaging of news into a virtual rackspace take so long? Simply put, the news media have been preoccupied with protecting the idea that content has asset value so they can monetize distribution channels. Google, almost like a neutral party, rounded up the publishers and packaged up their content for ease-of-consumption.

News media-think is still stuck on the older online paradigm of getting the reader to the content / website. With the Fast Flip exercise, it’s simple to see that the future of news media is getting the content to the reader.

This slideshow is a presentation we’ll be making for the California Association of Realtors next month. Marketing local business services like real estate to a community is changing. Pushing to a community via drip email marketing and shopping cart advertisements is time consuming and frankly more intrusive to the recipient than broadcasting the same information out as a media channel. What’s the difference in positioning? Media channels are in a much better position to provide favors and opportunities by virtue of their being a hub in their community. This in return attracts business. It’s the subtle difference between pushing your name out there and pulling in people who share business interests with you.

When I started Media Transparent one year ago, I used the tagline: “How the Social Media Converges with Mass Media”. This summer, I believe the Social Media has indeed become a Mass Media play, so now I’m changing the tagline to reflect the next movement in social media: “Media is the New Marketing”.

McLuhan’s 1960′s “the medium is the message” related to how media could control the masses’ perception of the world. Today’s social media does the same but gives voice to the “global village”, another well traveled Web 2.0 expression McLuhan coined. The 1960′s media spawned the Golden Age of Advertising, when Madison Avenue (Mad Men) was the internet of the day. Today, social media is destined to commercial application, and all business – small, medium and large – will be focused on harnessing the power of the Global Village to create a vast web of distributed content that intentionally supports and provides good will to the products and services they base their livelihood on. This is media, this is the new marketing.

My friend Tim White comments (on Facebook) on yesterday’s article: Anybody can become a Media Hub with new content distribution models: