@ Local Online: The Hyperlocal Rev Model: Sell Services, Not Just Ads

Buzzmachine’s Jeff Jarvis opened Borrell Associates’ Local Online Advertising Conference with an extensive report about the revenue possibilities presented to hyperlocal sites. Amid an flurry of stats that aimed to show that hyperlocal sites can attract thousands of dollars in revenue with just a s small support staff, his primary point was that sites in general need to do more than just sell ads and post news items. The need to sell services, including optimizing advertisers’ web presence across search and directories sites, as well as on social media and the mobile web. In terms of content, Jarvis rejects the notion that there’s too much content on the web, which many observers has said dilutes the value of major publishers’ ad sales. He pointed the value of establishing networks that filter the huge waves of content as the best way for media companies to recapture revenue. (Jarvis has posted an outline of his presentation, here.)

Jarvis also wanted to clear one other point up, before handing the things over to a panel presentation on hyperlocal. “I’m often misquoted as saying that I’m against the concept of paid content,” he said. “I’m not against it. I’ve got a book to sell right there” — he points to his What Would Google Do? — “I just don’t think it will work.” Speaking of Google, Jarvis offered current AOL (NYSE: AOL) CEO Tim Armstrong’s focus on hyperlocal blog network, Patch. Armstrong invested in Patch when he was still at Google (NSDQ: GOOG). After he became CEO of AOL, Armstrong decided to buy Patch and has said that he considers the site central to its local content strategy.

The first presented was Chris Hendricks, McClatchy (NYSE: MNI) Company’s VP of Interactive Media, who said that the newspaper publisher has been pursuing a hybrid hyperlocal content model of professional and amateur reporters. So far, the hyperlocal sites have contributed $2.5 million in revenue. The biggest site so far is the Raleigh News & Observer’s work with Triangle’s. That site did $500,000 in revenue last year. At that point, Jarvis praised him for doing God’s work. But when an audience member asked Hendricks if any of those revenues are being shared with the amateur contributors, he admitted that McClatchy wasn’t doing that yet, though they’re working on it. At that point, Jarvis said half-jokingly, “I take back what I said about God’s work.”

While McClatchy’s existing resources gives it an easy head-start when it comes to attracting users and advertisers. For others, it takes a mix of new and old media to gain any traction. Inn addition to becoming adept at SEO strategies, Mark Potts, CEO and co-founder of GrowthSpur.com advocated handing out leaflets outside the local supermarket to hosting gatherings at coffeehouses.”Marketing is the hardest part of this,” he said. “It takes a year or two to get critical mass on a local site.”

Chris Jennewein, president of U.S. Local News Network, also said that turning to the oldest media can help build a hyperlocal community. “We’ve put ads on billboards and on radio and those mediums still work pretty well.”