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Location-Based Services Can Save Local Media

October 13th, 2010 by Max Gladwell · No Comments

Embracing location-based services (LBS) could be the last best hope for local and regional publishers

It goes without saying that newspaper publishers are suffering. The steady decline in relevance and revenue began in the ’90s with the rise of the Web. This accelerated with Web 2.0 and the Great Recession. The final nail in the coffin could be the rise of mobile and LBS. Alternatively, it could be their savior.

Back in August, Dave Morgan asserted that Location-Based Web Services Will Devastate the Local Media Scene:

“If local newspaper, yellow pages, radio or local TV companies thought that Google, Yahoo, eBay and craigslist were disruptive, they are now going to face down a competitor that will have an even bigger impact on their businesses than any one of those companies did.

I believe that location-based Web services will take 20% to 25% of the annual revenue out of local media’s current advertising base within four years. Yes, 20% to-25% of their revenue base will be lost by 2014. That spend will be displaced by promotion and marketing fees paid to these new location-based services or applications that run on top of them. To the incumbent companies, these new services will be like craigslist on steroids.”

More recently, TheNextWeb stated bluntly that Local Newspapers Are Dead Men Walking:

“The recessions is over and many forms of media are seeing a rebirth of their advertising demand. Things are on the mend for national newspapers, network television, and even radio here in the US.

While those mediums are seeing large gains, inducing cries of joy it must be assumed, local papers are notrecovering. Year over year (YOY) advertising growth for the first 6 months of 2010 versus the first six months of 2009 was a paltry 0.2% for local newspapers, leaving them nearly unchanged after exiting a recession.”

We’ve written several times about the New Media Landscape and the importance of a Fourth Estate to our democracy. Because while the Constitution guarantees freedom of the press, there is no guarantee that a press will actually exist. In the U.S., it is wholly dependent on market forces i.e. the ability for a media company to sustain itself in the business of generating news and selling ads. The economics of the Web have seriously undermined this ability. On balance, this is a good thing because it democratizes and decentralizes news production. But local publications can’t make up for lost subscription and print-ad revenue by taking the business online.

Our suggestion is that these companies may have a final shot to survive and, indeed, prosper if they get ahead of the curve and embrace mobile, location-based services aka LBS.

First, let’s look at the current LBS landscape. You have Internet powerhouses like Google, FacebookTwitter, Yelp, AT&T Interactive and several others that want a piece of the very large local advertising pie. Google, Facebook, and Twitter each have a “Places” platform for local businesses. AT&T Interactive has YellowPages.com, and Yelp is, well, Yelp.

Next, you have hundreds of startups that are gaining various levels of traction. These include Foursquare, Gowalla, Whrrl, Loopt, PlacePop, Brightkite, SCVNGR, WeReward, ShopKickDeHood, and Poynt to name a few.

The big companies have the advantage of scale and brand recognition. The startups are nimble, well-funded (in many cases), and far ahead of the curve in terms of features and the cool factor. Unlike local and regional publishers, though, none of them has local presence. And we don’t just mean sales reps, though few even have those. Local papers are part of the community fabric. There is a unique relationship with the audiences and businesses they serve, as well as a staff to serve them. The advertising that local papers sell supports something of value to that community: professionally produced, locally relevant content. These are the unique assets local media can leverage to implement an LBS strategy that can save their businesses.

What does this look like? It will vary from case to case, often involving a combination of branded apps and strategic partnerships. The key point is the ability to monetize LBS. This is precisely why there are so many players of all sizes vying for their share of LBS revenue. The combination of mobility, presence, engagement, context, relevance, and personalization will yield tremendous returns. For traditional publishers, it has the potential to replicate print advertising revenue in ways that online advertising never could and never will.

But the window of opportunity won’t be open for long. Publishers hesitated with the Web, and it quickly ate half their lunch. If they hesitate again, LBS will certainly eat the other half.

If you’re a local or regional publisher looking to explore an LBS business strategy, you can contact MomentFeed to engage their services and leverage their proprietary location technologies.

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Tags: Geolocation · Media