Gannett's bailing on hyperlocal a cautionary note for smaller DOOH networks

July 4, 2011 by Dave Haynes

An interesting little story out of New Jersey, as related in MediaPost, reinforces the question I think a lot of people have about the prospects for intensely local – or hyperlocal – digital out of home networks.

The US media conglomerate Gannett was experimenting in crowd-sourced local news through 17 “hyperlocal” news sites in New Jersey, operated under the umbrella InJersey.com site. That has now been shut down, primarily because the ad money was not there.

The sites were not generating the traffic to merit the interest of local advertisers – who were being pitched on the notion that the service was delivering local ad impressions for local viewers, who would in turn use those local businesses.

Selling local advertising is really hard work. Most businesses don’t even have marketing budgets, never mind creative worth using. So the Digital OOH networks that have started in secondary markets – with a few bars, a few shops, a few public spaces – face an enormous challenge.

Over the years I have met or chatted by phone with countless groups planning to establish networks that “owned” a marketplace or region. Usually, their ad sales backgrounds are limited or non-existent, which put them in a hole before they even started.

They are also faced now with the meteoric rise of daily deals offers like Groupon, Living Social and up in my parts, WagJag. Those companies have people knocking on doors and working deals that generate instant foot traffic and are entirely measurable.

The hyperlocal thing has its merits, but a network operator going down that path has to get very big … quickly. And the mobile and daily deals people need to be their partners, not competitors.