By Ethan Lyon, Senior Writer
Increasingly, corporations across the nation are fighting to stay relevant. No longer is the newspaper (or in some cases, the company website) the “it” place for news. Corporations are battling against the negative and homogeneous image of themselves. Take Clear Channel for example. The radio conglomerate had to cut back on its one-size-fits all programming—instead focusing on the local element. Going local is sometimes a mad-dash to save company profits or a means to continue growing.
The consumer trend towards local appeal is frightening to large corporations that have influence reaching to every corner of the country. Going local can sometimes be expensive and hurt financially. However, some large enterprises are shedding their corporate identity completely, while others are leveraging their credibility to embrace smaller, niche community audiences. The going local movement speaks to our human bond trend, which is about coming together in smaller communities—opting for a more mom-and-pop business philosophy–and turning away from the ultra corporate image.
How are Corporations Going Hyperlocal?
Increasingly, audiences are shying away from mass-targeted information. While water-cooler stories are fun and a window to chat-up colleagues, there is a consumer push toward personally relevant info. Though everyone can talk about the latest headline, finding “niche” news is growing in popularity. With the mass-adoption of the web, consumers are choosing information sources that are highly customized and relevant.
Collecting Millions of Pennies – “Hyperlocal is going to be a huge, huge market,” says Mark Josephson, CEO of the hyperlocal aggregator Outside.in. Corporations are tirelessly trying to find that doorway into the profitable, hyperlocal market. In many instances, it is a mad-dash to save company profits. Consider the faltering profit margins of large media conglomerates as the New York Times. Scrapping the homogeneous corporate model, they’re looking to the likes of Google for an answer.
The online local advertising market is estimated to grow 5.4% in 2009 to $13.3 billion and $15.5 billion by 2013, reports media research firm, Borrell Associates. The NY Times is trying to find a way to tap into the billion dollar hyperlocal market. The Times has made a move to own a stake—or “mentor”—in many local publications to glean small portions of the profits. If you do this over hundreds or thousands of online publications, you start adding more zeros to your profit margins.
Shedding Corporate Identity – While the NY Times is making an outward move to stamp their name on their acquisitions, Starbucks is trying to go through the back door. However, it’s difficult for a multi-billion dollar coffee chain to slip around the side of the building. Starbucks is tapping into the local market by building cafes without Starbucks branding.
Though critics view the move as deceptive, proponents hail it as innovative and out-of-the-box. Not bound by corporate bureaucratic constraints, the local cafes can tap into the cultural and creative pulse of each community. The Seattle-based Starbucks’ 15th Avenue Coffee & Tea, like most other local cafes, serves as a mouthpiece for the community. Unbranded (aside from a sign that says, “Inspired by Starbucks”), the café can invite local musicians, host readings, etc. Furthermore, the unbranded café can shed the corporate brand identity and adopt a more grass roots personality.
The Future of Hyperlocal
Many critics of the hyperlocal trend ask for proof. Aside from Google, what major corporations have tapped into local community wallets to sustain their high operating costs? Though success stories are few and far between, we can learn from the search giant. Capitalizing on the long sought-after profits of the hyperlocal business, corporations are in search of their own Google business model. To do so, they have to be able to adapt, and own small shares across numerous markets. Overall, large corporations have to offer a product (whether it’s Starbucks coffee, or the Times insight and smarts) that is attractive to local markets. If they’re seen as an imperialist corporation, they will face tough local resistance (think Microsoft in 2003). Corporations could learn a lesson from the human bond trend: collaboration and equal participation are essential to build meaningful, sustainable, valuable relationships.
Photo by ilker from Stock.Xchng
