Hyper-Local Opportunity: 100 Billion Monthly Ad Impressions

local-maps-featuredEarlier this week, AOL sold patch off, retaining a minority stake in a joint venture with Hale Global. The latter will now operate the Patch network of approximately 900 community sites.

Hale has a history of taking over troubled companies. The terms of the deal weren’t disclosed.

What happens now is anybody’s guess. Perhaps a workable model and cost structure for Patch can be found. Perhaps other assets that make Patch a better advertiser proposition can be acquired and combined. My guess is that Patch simply disappears over time.

Absent a radical turnaround at Patch, its name will be synonymous with a failed “hyper-local” experiment. Indeed, there have been many dreams and attempts to build a hyper-local network over the past decade. But there are very few true success stories.

Centro was at one time a local buying platform but it has since diversified into other areas. Mobile networks such as xAd, Verve and YP focus on local and very targeted “hyper-local” impressions (but mobile is a different animal). One could also probably put Yelp and Foursquare (and eventually perhaps Twitter) into this category, as well.

Curbed.com (now part of Vox Media) is arguably a success, having been acquired for more than $20 million. There’s also Sacramento, CA area network SLOAN. Local Corp has a publisher network of 1,600 local sites. Nextdoor’s neighborhood network is well funded and growing. And there’s also Local Yokel Media, which has a network of 2,500 local sites and blogs.

The latter is expanding and offers a broad array of targeting capabilities, including mobile, behavioral and demographic profiling, social, geo-targeting and retargeting. At a time when the general and VC consensus is that hyper-local is dead or impossible to pull off, Local Yokel appears to be making progress.

The company has aggregated a network of community newspaper sites, local pure play sites (e.g., Weather.com),  local TV, radio sites and local blogs. Local Yokel provides guaranteed premium inventory on these sites and also facilitates programmatic buying, as well.

I spoke last week with Local Yokel CEO Dick O’Hare about the state of the business and the market more broadly. He argued that the Local Yokel network generally provides advertisers with greater contextual relevance, better quality and better overall ad performance. This is especially true of the company’s guaranteed inventory.

O’Hare said that they’ve added programmatic because that’s the direction the industry is moving and it gives his network greater sales reach into the DSPs. However, inventory placement isn’t guaranteed and the CPMs are not as good for publishers.

Beyond Local Yokel, I asked O’Hare about hyper-local ad inventory across the web. He told me that according to research his company has done, there are approximately 100 billion hyper-local ad impressions, across hundreds of thousands of domains, per month.

If that’s accurate, building a hyper-local ad network remains a major, still-unrealized opportunity. Patch tried to build scale too quickly and didn’t get the advertiser proposition right. However, networks like Local Yokel and a few others may eventually succeed by taking a more patient and careful approach.

There are many metaphors for the challenges of local. Trench warfare is one. However, I like to say that winning in local is like building the pyramids — brick by brick.

Related Topics: Channel: Local | Statistics | Statistics: General | Top News

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • GoBirdGo

    I would not put Local Yokel in the same category of hyper-local as Patch. Where Patch is a publishing platform, LY is a rep for other publishers, big difference.

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