Dive summary:
- In 2009, The New York Times predicted that hyperlocal publications would take off and help to replace shrinking and shuttering local newspapers, but the prophecy has proven to be false.
- Promising publications like EveryBlock, Placeblogger and even The NY Times' own The Local have folded under disappointing advertising sales.
- The problem is a fundamental structure that depends on small mom-and-pop business to fork over large advertising bucks, which they are unwilling to do; large advertisers looking to advertise in local markets have never come through.
From the article:
"A former Patch sales rep who asked to remain anonymous described the futility of trying to sell ads to local businesses that aren’t the savviest marketers in the world. 'It was a total waste,' he said of his nine months at Patch. 'Most of these local businesses don’t have budgets for advertising at all.' Advertising on Patch, he said, was often unnecessary for local businesses anyway because so many had built their customer bases through word-of-mouth advertising, not banner ads.
When they were actually able to make a sale, the rep explained that he and his co-workers often felt guilty. The businesses had tiny budgets, he said, sometimes only a few hundred dollars, and put their faith in Patch for a good return. 'Eventually, you do have to call them back and explain the reports to them,' the rep said. 'The click-through rates on our banner ads were terrible .You might spend a few hundred dollars on a banner ad and only get five clicks on it.' Renewal rates, he said, were miniscule as a result."
