Hyper-local definitions and trends, July 2011

Hyper-Local MediaDefinitions and TrendsDamian Radcliffe, 8th July 2011Comments and feedback welcome:damian.radcliffe@ofcom.org.uk@mrdamian76

Running OrderPart OneWhy this matters to OfcomDefinitions and ExamplesPart TwoTop 5 hyper-local issues to watch

Consumption of local media is highUse TV, radio, internet, newspapers, magazines or teletext to source local information100%93%92%92%91%90%All adults80%70%60%50%2005200620072008Source: Ofcom’s Media Tracker, rolled data from April and October 2008

And localness matters to consumers% saying local and regional content is very important - weekly usersScores based on respondents importance rating 9/10 on a scale of 1-10. Source, Ofcom research

But consumption is changingWhat is your main source of news about what is going on in your local area?Source: Ofcom media tracker, rolled data from April and October 2008

With the web in ascendancyUse of local media now compared to two years agoSource: Ofcom research 7

So, I’m mostly going to focus on the web today. But before that, what do we mean by local?Or indeed hyper-local?

9MY COMMUNITYMY LOCAL AREAMY REGIONMY NATIONUKThere is no consistent definitionLocal boundaries are not clearly defined and vary according to:

e.g. regional boundaries can be considered national in Scotland, Wales and Ireland

As a result, definitions of community vs local vs regional media differ by individualSource: Ofcom qualitative research 2006

News or content pertaining to a town, village or small community.Geographically smaller than traditional broadcast regions.Comes in many different shapes and sizes.Professional.Citizen run/produced.Hybrid.Aggregator/Automated.Sometimes also referred to as ‘ultra-local’ or community media.And on all platforms: TV, Radio, Print and Web.

Common CharacteristicsMore localised – both in terms of geography and types of content - than more mainstream media outlets such as commercial radio, TV regional news, BBC regions, or regional and local newspapers. Often seeks to fill gaps - geographical, special interest or demographic – audiences hyper-local producers see as unserved, or under-served, by mainstream media.Diverse sources of funding (if any). Including: advertising, subscriptions, grants from public and private funding bodies and in-kind funding from volunteers.The value and role of community media goes beyond the provision of content, with specific value often seen in the social capital generated by it’s production. May be single issue-based, or too small for commercial operators to merit ROI.

UK examples of traditional local and hyper-local media

Community Radio Not-for-profit radio services designed to operate on a small scale and to deliver community benefits aka ‘social gain’, to one or more communities.Initial legislation introduced in 2004. First station launched November 2005. Ofcom has licensed 228 stations over two rounds of licensing. 181 are broadcasting, 17 not launched or handed their licence back. Remainder preparing to launch. 9.2 million adults (11 million people) are able to receive a community radio station broadly aimed at them. c.15% of the total UK population may be able to receive a community radio service aimed at them on FM or AM.

Local & Regional Newspapers Death of the local presses not quite happened just yet.

Still a big industry as seen by the number of titles, 1995 – 2009

And the number of publishers: - the Newspaper Society identified 87 local / regional press publishers in early 2009. Source: Newspaper Society / Oliver & Ohlbaum analysis

Different types of local online content

Local Video: Launched in 2008 offering “Local Television for Monmouthshire”, Features a weekly 15 minute news bulletin as well as a range of other content such as local Sport, Music, Festivals and human interest stories. Typically gets 1,000 users a day, increasing by 300% at busy times e.g. Festivals. December 2009, it recorded its millionth visitor.Run (voluntarily) by two professional filmmakers, and volunteers - some doing 15 hours p/w to help with filming, editing and scheduling. A lot of the content is generated by students doing a City & Guilds Level 3 Diploma at the station; with coursework being showcased in the “Mon TV Academy” . Many graduates stay on as volunteers after graduating.

Local Audio: The Hackney Podcast won Sony Radio Gold 2010 for the best internet radio programme.

Recently won the Gold award for General programming in the New York Festivals International Radio Awards.Launched 2008; available to download for free each month from their website. The winning podcast looked at water and how it fits into the lives of people in Hackney. Featured author and psycho-geographer Iain Sinclair and architectural historian Simon Inglis, and music from electro-acoustic composers incl. Francisco Lopez and Stefano Tedesco. “The Hackney Podcast is just the type of targeted and locally orientated content that sets podcasting apart from conventional radio broadcasting. Using first rate contributors the podcast examined how water fits into the lives of people in Hackney. The production quality is outstanding giving the whole listen a water like lyricism that carries the listen through to it's conclusion.”Sony Radio Judges, 2010

Local Print & Web: 10,000 copies distributed face-to-face in the first week of every month at markets, train stations, and events and also in cafes, shop, businesses and libraries. Estimated readership: 30,000. Plus online audience: http://www.hackneycitizen.co.uk/Written by the community incl. freelancers from NCTJ, Telegraph and the Guardian.No office, no staff, no overheads. No previous experience. (Keith Magnum who runs it used to work for the Green Party.)Sell ads, ABC1 skew. Won’t take ads from chains competing with local business e.g. Morrisons.Uses free Guardian API to pull in relevant content produced elsewhere e.g. a visit from Jude Law to the Petchey Academy in Dalston.

Local Commercial ‘Postcode’: SE1 London SE1 Community Website - local news service and discussion forum for London's South Bank, Bankside, Bermondsey and Waterloo areas. http://www.London-SE1.co.ukSupported byin SE1 monthly printed what's on guide.SE1 Direct weekly email newsletter7,200+ subscribers.SE16.com is our online events guide for Rotherhithe and Bermondsey.All produced by Bankside Press, a small family-run web and print publishing business in SE1.

Local Online ForumsExamples include:http://www.urban75.com/Brixton (and plenty of non-Brixton) related content from gig reviews to photographs and local forums. Traffic “in excess of quarter of a million page impressionsper day” despite being non-commercial and free of advertising. Launched in 1995.Launched July 2007. Using white label social networking tools e.g. Ning, Flickr. Sign up required. 2,000 members. Discussion and interaction with both a civic and social purpose within the neighbourhood of Harringay in the Borough of Haringey. www.harringayonline.com

Local Environmental CampaigningCemex: $multi-billion Mexican multi-national concrete company. Very noisy plant in KX. Resident led campaign uses videos to evidence noise. YouTube links sent to UK CEO, Council etc. Cemex capitulate – correct problems and restructure plant.

Local StorytellingStories about life in Spitalfields, East London. Focus on human interest stories and history.Email sign up for daily updates. Ambition to author 10,000 posts. “At the rate of one a day, this will take approximately twenty-seven years and four months. Who knows what kind of life we shall be living in 2037 when I write my ten thousandth post?”Readers from Qatar, Seattle and all over the world, not just E1! Sample user comments:“Your blog has become a daily joy I look forward to savouring. It’s a bit like a grown-up (and sometimes not-so grown-up) advent calendar. I open it with the same anticipation…”“I love you gentle author. I read Spitalfields Life when my heart is worn. It makes me think of you and how remarkable the beauty. 2037 indeed. Hope I’m here.”http://spitalfieldslife.com/

Typology ConclusionsNo single definition; comes in many different shapes and sizes including:Professional - e.g. http://ventnorblog.com/Citizen run/produced – http://parwich.org/Hybrid – such as those produced by professional journalists/academics e.g. http://bournvillevillage.com/ Aggregator/Automated e.g. http://planetbalham.org.uk/Their purposes can also vary widely. Therefore there is no such thing as a typical hyper-local site. Each one varies in tone, quality and ambition.

Top 5 hyper-local issues to watch

1. Finding a proven business model “To open a shop is easy, to keep it open is an art.”Chinese Proverb

Context: key business challengesFor small scale hyper-local operations, like many listed earlier, key challenges include:Discoverability.Audience perceptions of quality.Lack of single / group editorial vision and voice.Funding – very few commercially viable.Inconsistent coverage i.e. there isn’t one everywhere.Most hyper-local content is online – so 30% of the population are immediately disenfranchised.Big business doesn’t necessarily find it any easier…

1.1 - Closure of The Guardian has announced the closure of local news websites (Leeds, Cardiff, and Edinburgh). “As an experiment in covering local communities in a new way, it has been successful and enlightening. Unfortunately, while the blogs have found engaged local readerships and had good editorial impact, the project is not sustainable in its present form.”Meg Pickard, head of digital engagementSource:http://bit.ly/hbtSJy“Despite years of talk, hyperbole and failed experiments in “hyperlocal” journalism, which has been championed by many including the Guardian Local staff, there remain few concrete examples of formalised such efforts becoming commercially sustainable. … GNM’s decision may be one more indication that there is no future for industrialised “hyperlocal” journalism.”PaidContent’sRobert AndrewsSource: http://bit.ly/fmUxl5

1.2 – Expansion of AOL’sAOL expanding its Patch US local news network to 837 sites across more than 20 states.Part of editorial expansion following February’s $315m acquisition of the Huffington Post. Source: http://reut.rs/mvtyZfPatch sites have also introduced blogging for the first time, with each Editor being tasked with recruiting 10 bloggers from their community as part of integration into Huff Po. That’s 8,000 bloggers. Editor in chief Brian Farnham, gave them a week to achieve this target. Source : http://onforb.es/eP2pbAIn December, Patch had just over three million unique visitors, 80 times that of a year earlier, according to comScore. Source: http://nyti.ms/eP7pkuMeanwhile, Paid Content estimated the cost of Patch at $30m per quarter.Source: http://bit.ly/g4IA9aPatch claims their websites costs 1/25 of the cost of a daily newspaper in the same town.Source: http://bit.ly/ow3zWZ

1.3 - Lessons from TBD in the US“Hyperlocals like TBD: More hype than hope” ( http://bit.ly/h7Camr )said failure caused by: Small audiences; Big expenses; Small revenues; and Big losses.Rick Edmonds’ – Six business lessons from TBD’s early demise:Branding, Effective Ad Sales, Filling an existing need, “Pedigree does not equal strategy”, “Building out big is a risk” and “Fail Fast”.

2. Advertising"Advertising is on its deathbed and it will not survive long, having contracted a fatal case of new technology.“Roland T. Rust and Richard W. Oliver - The Death of Advertising

Context: Local AdvertisingTraditional AdvertisingStrong heritage: Local Newspapers, Commercial Radio etc. But the internet is drawing traditional revenue streams away from old local media.Percentage of advertising spend on internet 2007Source: Advertising Association

2.1 – Ch-ch-ch-ch-ChangesOld models switch to digitalRecent Yell Group results: Digital media revenue grew 9.4% to £457.0m or 24.3% of revenue (2010 – 19.6%).Print revenues fell by 18.6% to £1,317.1m. Digital media advertisers grew by 4.5% to 902,000.Print advertisers were down by 9.4% to 1,195,000. “The digital marketplace is already twice the size of the total print market and some ten times larger than the segments of the print market Yell traditionally addressed.”CEO,Mike PocockSource: http://bit.ly/lhuKLENew models emergeHyper-local media buying agency Oxbury Media, has built up an ad network of 10,000 sub local newspaper publications and sites representing a 10m+ audience. Offers to “broker advertising, by postcode, region or even village” in print and online.

In the US, local advertising is predicted to be the fastest growing ad sector BIA/Kelsey forecasts U.S. Local Digital Ad Revenues to nearly double to $42.5B by 2015.

Digital media forecast to represent 23.6 percent of all US local advertising by 2015.Local Search Advertising Revenues to reach $8.2 Billion by 2015. By 2015, 30 percent of search volume will be local in nature. Sources: http://bit.ly/ijQb0I and http://bit.ly/hVPtgC 2.2 – Rise of hyper-local advertising

Of which Groupon is the Poster Boy.

It recently filed an S-1hoping to raise $750, in its initial offering.

The document shows how quickly the group has grown including:

Increasing revenue from $3.3 million Q2 09 to $644.7 million Q1 2011.

Expansion to 43 countries as of March 31, 2011.

Subscriber base up from 152,203 as of June 30, 2009 to 83.1 million.

Merchants up from 212 to 56,781.Source: http://1.usa.gov/lE03arBut, an article on Short Logic notes:“Given they’re currently losing a staggering $117M per quarter, despite revenues of $644M, they’ll be burning through that cash almost as soon as it hits their account. At the moment, it’s costing them $1.43 to make $1, and it doesn’t look like it’s getting any cheaper.” It concludes: “buyer beware”. Read the full article here: http://bit.ly/kw3F1Q2.3 – Huge excitement over local deals

But not everyone thinks there’s potential:“Hyperlocal audience is hypersmall audience”Heading from an article covering new research by Borrell Associates, a consulting firm that tracks local advertising in the US. In its report, “How Unique is Unique?: Gauging the (Actual) Size of Local Web Traffic,” Borrell surveyed 16 local websites and found overall that:30% of a local website’s visitors don’t live in the market, 20% of page views are delivered to “fly-by” users who won’t come back for a year, if ever, and the average unique visitor count overstates the number of local users by a factor of five, meaning a site that sells local advertisers on a half-million monthly uniques is in the end probably only delivering 100,000 local users.Cited at: http://bit.ly/gWErpH

3. Location, Location, Location“I like to drink to suit my location.”Tom “What’s New Pussycat” Jones

3.1 - Location Meets AdvertisingLocation Based AdvertisingPredicted value $1.8bn by 2015, up from est. $43m in 2010 (ABI Research Sept 10).Uses a mix of GPS, Wi-Fi, and /or Cell-ID depending on the product or service, the region, the consumers, and the location accuracy required. Targets users with relevant local information, and ads for local businesses. Google, says such ads already get 8% more clickthroughs than basic mobile ads.Already live in the UK O2 customers signed up to O2 More receive messages pushed from Starbucks and L'Oreal, regardless of handset or contract, when they pass through locations pertinent to the companies.Service is opt in. Launched 15/10/10. No more than one message a day.

3.2 - Location Meets NewsIn May Google announced the launch of a new U.S English edition feature for mobiles called "News near you". The service works for Android or iPhone users, who – once they have registered their location – can use a default menu to tailor own news feed. Read more: http://bit.ly/kf2eGUSearch Engine Land notes:“Google isn’t the first to offer local news like this. Bing’siPhone app also has a section for local news under the “News” tab, and CNN’s iPhone app also offers local news (and weather) via the “My CNN” tab.” Source: http://selnd.com/mEkDwr Example created for someone in Topeka, Kansas

Hyper-local definitions and trends, July 2011

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