Hyperlocal's $12B Opportunity For Stations

There might be something to this hyperlocal thing after all.

Broadcasters have been talking about using the Web to serve individual towns and neighborhoods within their DMAs for years, but the pieces to make it happen may just now be coming together.

Fisher is clearly on to something.

The Seattle-based broadcast group has launched more than 100 community sites in four markets since last summer and, according to my interview with CEO Colleen Brown this week, it's apparently having some success at it.

To go hyperlocal, Fisher needed to find a new way of doing business, with a new set of economics. It did it with DataSphere Technologies.

DataSphere is supplying the online platform, one originally developed to sell real estate, and a telemarketing operation that's expert at cold calling small businesses and selling them advertising.

The platform allows Fisher stations to funnel community news that would never have made it to air or been buried on their main sites to the appropriate community site and it facilitates the posting of user-generated content. With the platform, Fisher says one $30,000-a-year producer can manage 15 sites.

The telemarketing also allows Fisher to go where it has never gone before for ad revenue -- small businesses like dry cleaners, boutiques, nail salons, pizza parlors, interior designers.

Now, as Brown acknowledges, these advertisers are only spending between $25 and $300 a month, not worth the time of TV account executive to pursue. But it adds up.

"The hard thing is to understand when you come from mass media is that this is about literally rolling up the nickels," says Brown in the interview. "This is really about selling very small advertisers at price points they can afford, multiplied by more than 100, multiplied by 12 months."

This is money that traditionally has gone into print yellow pages and that yellow pages publishers are now trying to migrate to their online directories.

And it does add up. According to Kelsey/BIA, the yellow pages took in $12.6 billion last year. That, by some estimates, is as much as local TV broadcasting did.

The money is there, but broadcasters will have to battle for it. The incumbents will not let go easily, and TV stations are not alone in trying to exploit local online media. The competition will be fierce, even at the small-business level.

At a Borrell Local Online Advertising Conference panel I moderated last week, Todd Minniear, of The Berry Co., a major yellow pages publisher, talked about the success he is having in selling 30-second video ads to advertisers on his online directories.

In other words, Berry is selling spots just as TV stations and cable systems have traditionally done, albeit at a much lower price. If you work for a station or system, that should get your attention.

To prevail in this new world of hyperlocal online media, broadcasters will need more than an economical platform and way of selling advertising. They will also need to produce the best content.

And that's the other piece of the hyperlocal puzzle that seems to be falling into place for broadcasters.

During the blizzards that hit the Northeast, TV stations did their usual good job of tracking the storms, but they also did an unusually good job of reporting on how the storms were affecting individual neighborhoods.

They finally seemed to have figured out how to produce live news reports on the cheap using iPhones, Flip Minis, Skype, Ustream, Twitter, Facebook, plain old cellphone and a variety of other consumer-grade gizmos and media.

Reporters seemed to be everywhere because they were. Untethered from microwave and satellite trucks or the need to rush back to the station with video, they were free to roam and to tell stories in a new way. As our Jim Barthold reported, WTXF, the Fox O&O in Philly, mounted ComVU cellphones behind the windshields of snowplows and gave viewers a whole new perspective on digging out.

The pictures were not nearly as pretty as broadcast TV viewers are used to. But you know what? It didn't seem to matter to anybody, including the local TV critics in Baltimore, Philadelphia and New York who praised the broadcasters for their efforts.

Broadcast quality gave way to broadcast quantity.

Smart phones and WiFi are the tools that TV stations must learn to appreciate and master if they are to succeed in the hyperlocal TV game. Any neighborhood deserving of its own website is deserving of its own content from the TV mother ship.

TV newsrooms cannot produce stories for all the sites all of the time, but they should be able to produce some stories for all of the sites some of the time. The new tools help make that possible.

Another key piece to these hyperlocal sites is user-generated content, but users aren't going to contribute stories and video to every site in town. They are going to rally around those with the best professionally produced content.