This chapter in Web history is marked by a number of big companies doing business at a small scale. Groupon, LivingSocial, and even broader tech companies like Google and Facebook have been relentlessly working on ways to match consumers with the local businesses right around them, even though these companies might be headquartered far away.
They’re serving a market for ads and coupons that used to be the domain of the local newspaper, but if you listen to their executives talk, news media get only a passing mention. Are these targeted local deals services cutting news organizations out of the market that used to keep them afloat, just like craigslist did to their classifieds?
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News as an industry has always been subsidized by advertising and promotion of local businesses. The news attracts a lot of eyeballs, as the advertising industry likes to call human beings, so it makes a good vehicle for local promotions. Now, though, information hubs that aren’t for news, like search pages, mobile apps and email inboxes, use up a lot of eyeball-time.
News used to have the advantage of knowing its audience; people looked to news sources for a particular kind of information, so advertisers could focus their efforts on that audience. But now, Web users give off that kind of data with every click of their mouse, and technology powerhouses can use that data to cater to them, even from a distance. Has this eroded the news industry’s advantage as an ad platform?
These mobile- and social Web-based deal services have leveraged the scale of the Internet to build something that feels local, even if it isn’t, and they’ve done so with great skill, technology, and people-power. Without a doubt, in a financial sense, targeted deals are good for customers. But lots of local businesses complain that these campaigns offer them a raw deal. They may attract short-term customers, but they might come with a sacrifice in quality, bringing people who are only interested in getting a discount, rather than becoming loyal.
That’s not a universal opinion. In response to these criticisms, analysts have come to the defense of daily deals with relatively straightforward suggestions for how to make them work for small businesses, even if it takes some rearranging. But if there’s one thread upon which supporters and critics agree, it’s that these local discount campaigns are not for everyone. There is no one-size-fits-all solution.
If that’s the case, news organizations still have a chance. They’re enabled by Web technology, too. They can track their audience’s interests very specifically, since they can see what stories and topics interest them day in and day out, and they can use social media to generate rich conversations on top of those stories. This can help them build a content strategy that attracts and develops reliable target audiences and connect them to local businesses. Local news can’t be replicated from elsewhere; it has to be created in close contact with its audience and their community. It also has to be very well done in order to keep its audience interested, and that’s expensive. But the kind of intimate familiarity local news can forge between neighbors and businesses might prove invaluable if bolstered by good information technology.
But practically everybody’s looking to stake a claim in this gold mine. Banks are looking to trade their rich customer data for deals, too. And Facebook might be able to offer local businesses the most direct line to their customers, and they’d have much less overhead doing so than a news site. As we reported earlier this year, 70% of local businesses use Facebook for marketing already. It’s clearly an effective way to reach customers.
If news organizations are going to to keep a piece of this business, they’ll need to match high technology with great content, and they’ll have to do everything they possibly can to keep the conversation lively, timely, and dependent on their stories.
Disclosure: Jon Mitchell freelances as managing editor of Neighborhood Notes, a local news site in Portland, Oregon.
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