HyperLocal Market Heats Up

The recent entrance of The New York Times and Google/AOL executive-backed Patch Media to the local online market set off some tremors this week. As reported by Bloomberg’s Tim Mullaney, the hyperlocal market is heating up – fast.

For those not familiar: Patch Media is a new local media group backed by former Google Senior Vice President Tim Armstrong (who was just named AOL’s new CEO late on Thursday, March 12).

Patch Media’s sudden, aggressive campaign to win readers and advertisers in the town of Maplewood, N.J., is posing some serious competition for The Times’ new Local Blogs network, which also selected Maplewood as a pilot community.

Why the sudden intensity? I guess it was inevitable. The newspaper industry, facing pressure to reinvent itself in the digital world, is looking for ways to provide news to broader, more engaged audiences with leaner staff and less expensive channels. That means community-based coverage on a blogger budget.

The catch: they’re counting on revenue to come from one of the few areas where advertising dollars are still growing – local online advertisement and business listings.

From the Yellow Pages perspective, this raises some interesting points and questions:

  1. Our belief in the value of local has been reinforced: local search data and rich community relationships are highly valuable assets in a knowledge economy, and our industry has deep underlying assets that will keep it vibrant and relevant for many years to come.
  2. Growth in hyperlocal media sites is an opportunity, not a threat: As the demand for hyperlocal Web content grows, so too will the demand for extensive, accurate local business search data, and Yellow Pages has the best experience and infrastructure available to provide that data. No one else can match the wealth of our data or the reach of our sales channel. Assuming that competition will push the market to find price-efficient solutions, hyperlocal media would be better served to partner with existing local business directories than to reinvent the wheel.
  3. Like the newspaper industry, we too are undergoing a transformation: It’s ironic that after years of eschewing our business model, the newspaper industry is now quickly trying to jump on our bandwagon. But before we pat ourselves on the back, its important to emphasize that all media and advertising models are grappling with the dual forces of tightening economics and increasing migration to digital platforms, and the Yellow Pages are no different. Only continued investment in infrastructure, marketing and new platforms will ensure that we grow and thrive to stay financially sound and relevant to our users and advertisers. Fortunately for us, we already have products and channels in place that generate strong revenues and margins (which, as Mullaney notes, has been the stumbling block for some promising up-starts like We also have a head start on understanding and addressing the challenges in our space.

Looking forward, I expect that the hyperlocal explosion is going to catalyze a million short races — but the Yellow Pages are in the best position to win the marathon.

The big names and various players entering the race make things interesting. No one quite knows what the future looks like, but with blogs, news content, business directories, social networking, and advertising all merging into hyperlocal hubs – it seems to begs the question – is a mashup of some sort the eventual solution?

I would be interested to hear your thoughts. Feel free to leave a comment.

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