Posted on Thursday, October 4, 2007 by Michael
The Local Onliner has an interesting piece today. Read the whole enchilada here.
Under-served small communities are getting more attention. Companies like TownNews, Greyboxx and Topix have set out to focus on small town and exurban residents, and aggregating those local users for advertisers.
Now that’s revealing. A purpose of these sites is to herd together local folks for the convenience of national corporations. This might explain why so many national “local online” efforts seem lacking in the soul department. How many people get USA Today delivered to their doorstep vs. the locally owned daily paper?
As we wrote in April, Topix – a 25 person company that is 80 percent owned by Gannett, Tribune and McClatchy – has been aggregating local news from a variety of sources. It has 25,000 news sources in 20,000 communities. It counts more than 12 million unique visitors.
Lately, it has also been incubating local blogs and other User Generated Content. It is now getting 60 percent of its content from user generated posts; and 60 percent of those posts come in without a linking story. The traffic is disseminated via bookmarks, email, and a number of affiliates who use it for personalized local news, including CNN, Ask, Infospace and My AOL.
The emphasis on User Generated Content isn’t particularly hard to discern, notes new CEO Chris Tolles, who was formerly head of marketing (founding CEO Rich Skrenta and VP of Business Development recently left the company to launch a startup). Tolles is also speaking on the SES side at ILM/SES Local. “You don’t have local headlines in a small town,” he says. “There is no ‘there’ there. Local news is not a search problem.”
No local news in small towns? Another interesting statement from a major player in “local online” as practiced from 30,000 feet.
The effort to harvest UGC on a geographic basis, however, would seem to put Topix on a collision course with sites such as Placeblogger and Outside.in. Tolles says there may be a few points of collision, but notes that Topix is differentiated by its scale.
Those are “hand cranked sites.” Beyond a certain number of places, sites like Outside.in are…pretty bare. We are in many more places. We own towns with populations between 5,000 and 50,000,” he says, adding that nobody else gets in more than 10,000 cities, even though there are 32,500 U.S. zip codes.
Hmm… I think of small towns with great citizen journalism sites, like Brattleboro, Vermont. I’m guessing they don’t feel owned by some distant dot.com.
Now, what does that really mean? Only 8,900 communities in the U.S. are big enough to have cable TV franchises, for instance. We must be talking about very small places. Indeed, Tolles says some of the town count is enhanced by neighborhood data. “We’re loading in neighborhood data from a lot of cities,” he says.
And then there are localized sites such as Yahoo! and its local News. But Tolles says Yahoo! really isn’t a direct competitor — especially since it stopped supporting user forums.
For Tolles, Topix’s next challenge is fairly obvious: sell some advertising. He notes that the company hasn’t tried to sell advertising for two years, making most of its revenue from Google AdSense commissions and the like.
To that end, Topix recently hired a VP of sales. The differentiation points for Topix are clear to Tolles: a non-Facebook audience of local users in small and exurban communities. Whether ad agencies want those audiences, however, is another question. Typically, they’ve demanded to reach audiences in the “Top 20” or “Top 50” or “Top 100” markets. That’s why local newspaper networks haven’t done well.
But Tolles believes they’ll go where the market is. Wal Mart figured that out years ago, he says.
Now I understand… Walmart is the model for local online.
Michael: I think you are being kind of literal about what Chris said about local news headlines. My interpretation of what he was saying is that people don’t care about the “news” that a journalistic entity would produce…..(i.e. a bond measure for a local garbage dump ). But he thinks that people care a lot about community information and observations that only local residents can generate. Topix is creating a relatively good environment for that…along with its competitors, don’t you think?
Points well taken Peter. I’m sorry if I misread Chris’ comments. There’s little doubt that Topix and the growing number of services with a local focus from a global perspective provide something of value to the communities they cover.
I wish the powers that be could come up with a clearer way of delineating between the local online equivalents of “Walmart” and the “locally owned and operated small retailers.” Between national-local and local-local.
On the retail side for comparison, I believe that small businesses far outweigh the national chains in the cumulative (revenue, employment, etc.), but they get proportionately less media attention, business school research, access to capital, government handouts, etc. That’s how it works in a capitalist system… money begets money, attention, breaks, etc. So the few big boys get more than the millions of little guys.
Is the same pattern underway in the “local online” space? How many locally derived services are out there vs. the nationals? How do total traffic and revenues compare? I know which side gets the lion’s share of the attention from media, investors, etc.
Wasn’t the internet supposed to turn this basic relationship between national and local on its head?