News publishers have been piling in to “hyperlocal”, with few signs of success or returns. But Associated Northcliffe Digital strategy director Roland Bryan tells paidContent:UK the model will, eventually, help it claim part of a local ad market he puts at £2.8 billion.
“We think there’s a real revenue prize in these catchments,” Bryan says. “Our estimate is that the total UK SME advertising market is about £2.8 billion online and offline. And we know that very little of that is online today — the local hairdresser or butcher, they don’t understand Google (NSDQ: GOOG) and don’t know what it can do for them. What they understand is local media that reaches a high proportion of local consumers.
But AND is taking a patient approach. So far, it’s been building reach, not pitching advertisers. “Until we feel it’s at a stage where it has critical mass in terms of usage, that’s the point at which we start to commercialise”. Bryan declines to say what the tipping point might be — or what the sites’ overall traffic is — but he says some sites have managed to attract between 30 and 35 percent of the local online population (they were launched in areas with a populations of up to 50,000). Over the next two to three months, Bryan says, AND will decide “how much further we go” with the project, while two or three “big functionality launches” are due in the coming months.
— Revenue expectation, or hope: There’s no lack of optimism, but is the move into (hyper)local publishing more in hope than expectation? “What I’m convinced about is that local businesses want local media and that there’s no one else doing this very well online,” says Bryan. Yellow Pages is “unbelievably expensive” and local newspapers, “in some cases, work really well… but if you want to reach people in Dalston, you get an awful lot of wastage if you target the whole of Hackney.” He declines to put a deadline on it, but Bryan says there’s no question that LocalPeople.co.uk will make money, “unless something very strange happens to our user numbers.”
— But what’s the model?: It’s been said that a local online advertising market just doesn’t exist. Not so, says Bryan: “We believe there’s a range of revenue streams in the local market” – specifically display ads, classifieds, give-away vouchers and coupons from local businesses. And then there’s what he calls monetising trust: “The two things local business want is a way to reach people locally with offers and discounts, and secondly to complete on trust. We think there are interesting revenue models around trust validation in the local market.” And don’t forget the synergies with DMGT’s ad business like Findaproperty.com: Bryan says homes, cars and job ads are among the most popular click-throughs on the sites.
— Community correspondents: Around 1,500 individual contributors have already posted something on the LocalPeople site and — even, though it wasn’t specifically designed as a community news platform — Bryan says the most common use of the sites is readers writing original, local news stories, around 12 of which have found their way into Northcliffe’s local newspapers. Bryan says the level of engagement is two to three times higher than across the rest of DMGT’s local and national online media.
— Grassroots blogging partnerships The burgeoning local, grassroots, amateur blogging scene is in need of some big backing to give it mainstream traction — and Bryan is happy for AND to do just that. He admits there have been no real partnerships so far — “that’s more than anything a resource constraint” — but says the company is about to go and meet these local bloggers and site owners and talk about how they would like us to interact with them: “There’s a whole load of things we can do to support them”