ILM East: Revenue Opportunities in Hyperlocal
Merrill Brown, principal of MMB Media, joined ILM East conference architect Peter Krasilovsky on stage this morning to talk about the transition of hyperlocal and hypervertical sites from unprofitable hobby sites for civic and mom-and-pop organizations to one that is being taken seriously from a revenue strategy point of view by local media companies that are beginning to monetize the space. Thus, Brown said, “we’re getting to a point where investors are getting excited by local again.”
Brown has advised a variety of companies moving into this space and believes this area of local is at an important junction where newspapers and entrepreneurs realize that scale and networks are crucial. This network approach is being employed by two other companies, and their leaders joined Brown and Krasilovsky on stage to talk about their businesses.
Zohar Yardeni, CEO of Main Street Connect, spoke about his network of 52 community sites in three states. Main Street Connect has raised $14 million to date and operates under a fairly simple premise: local news will survive. Yardeni commented that the decision to enter a particular community isn’t necessarily based on affluent demographics. Often it is based on how advertisers value contiguous geographies, and the company is currently working with a variety of local and regional advertisers.
Josh Fenton, cofounder and CEO of GoLocal, looks at attractive markets as being midsize markets with features such as sport teams and state capitals. For instance, they’ve had success in a central Massachusetts region (Worcester), which is technically in the Boston DMA, but home to roughly 1.2 million people. Fenton offers a variety of advertiser tools; one that has been particularly successful is video.
Yardeni and Fenton commented that the CPMs they’re seeing in the hyperlocal space have surprised them. They were expecting CPMs of $1 or $2, but have seen them in the $10 range.