Washington Post gives up hyperlocal effort

19 08 2009

New York Times:

The Washington Post is shutting down one of the earliest and most promising experiments in hyperlocal news, LoudounExtra.com, which covered news in Loudoun County, Va.

Loudon ExtraNews organizations everywhere have been promoting hyperlocal Web sites, which give readers detailed updates on what is happening in their neighborhood or on their block.

The idea behind these sites is that while readers are abandoning major metro newspapers, they still care deeply about news that is happening down the street. Meanwhile, local businesses theoretically want to advertise to local readers, potentially offering a business model to pay for the local news.

The challenge, though, is that hiring reporters to cover car thefts, school board meetings and new store openings is expensive. So is hiring salespeople to visit local businesses and sell ad space.

The model works only if a bunch of salespeople pound the pavement, or if a company like AOL with a network of large advertisers offers them geo-targeted ads as part of a bigger package, said Greg Sterling, an analyst who blogs about these issues at Screenwerk. “I suspect The Washington Post maybe made assumptions about acquiring advertisers that didn’t turn out to be true,” he said.

It could be a case of bad timing. Because of the economy, local businesses could still be too skittish to take advantage of the opportunity. They never seem to buy into the idea that in a slowdown, you should step up marketing.

But I’m beginning to wonder whether it’s a problem of advertising ROI more than a journalistic model. For years, the Holy Grail of advertising was highly targeted demographics. Hyperlocal offers it, at least on a geographic breakdown. But it may be that the entire model of one-way interruption advertising is dead, and businesses know it.

If so, the question becomes how can newspapers and their Web sites tie into the newer model of marketing as value-adding dialog with prospective buyers.

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