PaperG (Victor Wong)

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Spot.us (David Cohn)

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SeeClickFix (Ben Berkowitz)

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GrowthSpur (Mark Potts)

But while innovative networks like Glam Media are continually building new tools and services to connect online publishers with highly targeted ads for their audiences, the majority of them still focus on national advertising paired with the content rather than the reader.

Within the new ecosystem and framework we’ve been outlining, the role of ad networks would expand to connect publishers with new advertisers, audiences, and other publishers on a local and metro-wide level.

The best way to do that is “to work with the content providers who know their local barber and their local pizza place and help them sell their ads in a larger network,” says Mark Potts, who recently launched GrowthSpur (disclosure: Potts’ played an important role in brainstorming the framework concept for this project.) Not only does his team provide a range of tools for content providers like invoicing, analytics and search engine optimization, they also provide professional training in how to sell advertising.

In line with Potts’ aim to rethink advertising, we also see several untapped opportunities for ad networks to bring in new revenue through increased interconnectivity. One way to do that would be for independent publishers to help larger media brands and news organizations reach audiences normally overlooked.

Imagine for example if a local sports blogger covering the Illinois State Redbirds was to run targeted ads from ESPN Chicago and maximize the dollars gained from those ads. Potentially, both content providers would benefit, as well as the advertisers. And that would also allow the content providers to focus on what they do best: providing content.

“It’s often harder for larger media sites to reach local advertisers,” says Potts. “But if someone is already out in a community selling those advertisers on their site, they can also sell ads for the larger sites as well.”

“Mobile is really the sweetspot for local sites,” he says. “Google Traffic is never going to pick up the two-car accident downtown or stuff of interest to a small subset of people, like the little league game tonight has been rained out. Those are the classic hyperlocal stories, and that’s where mobile would be great.”

As he wrote in a two-part series on local mobile last week:

What really distinguishes mobile is immediacy and location…The phone in your hand is your direct pipeline to solving problems right here, right now, and mobile-enabled services have to recognize that. It’s the purest definition of the old “news you can use” chestnut.

Beyond editorial content, mobile advertising revenues are potentially too large for new metro organizations and hyperlocals to miss. According to the Mobile Marketing Association, mobile marketing budgets will increase 26% this year while overall marketing expenditures decline by 7% (via MediaPost).

While mobile is bucking the downward spending trend resulting from the recession, the emerging medium is still only a small fraction of total marketing budgets, at 1.8%. The MMA projects that mobile ad spending will grow from $1.7 billion this year to $2.16 billion in 2010.

So, even though the examples of successful mobile products–including Yelp–Potts cites are organizations with substantial r&d budgets to burn through, he says there are inexpensive ways for smaller companies to compete. He says they should look at off-the-shelf offerings, new products coming down the pike from the content management providers or by turning to a company like Newsgator for a custom iPhone app on the cheap.

Potts argues that the hyperlocal play in mobile advertising will grow as more phones start to geolocate (or even begin to augment reality). An app could blast out coupons or special sales from local vendors—like half-priced slices from the corner pizza guy—to readers walking by.

“Local sites end up as an ad agency at that point and everybody wins. The sites take a little slice off the top,” Potts says.

So, are there any independent hyperlocals out there with killer mobile apps? Let us know, we want to hear from you.

During its run, however, Backfence was poised to form the largest network of hyperlocal news blogs in the United States.

Main Goal of Backfence: To create a national network of sites that would allow people to talk about their towns and learn about what was going around them. The kind of information you see exchanged over the literal backyard fence.

Integral to the operation was to build this network as a business, says Potts. Many hyerplocal sites can cover server costs and a few expenses, but the objective of Backfence was to scale nationally and create a strong business around it.

Notable Achievements: During the height of its operation, Backfence had over 400 advertisers in three metropolitan areas. “It was a real accomplishment, it proved local advertisers were looking for a space in online media,” says Potts. Backfence was able to raise money and establish itself in 13 cities. Its fall was not from a lack of interest or advertisers, but from internal turmoil.

A Surprising Realization: First, how difficult it was to market the site to a new community. “The hardest thing is getting the word out and getting the communities to know you exist,” said Potts.

On a positive note, the quality of stuff that Backfence received was terrific, says Potts. Journalists often think that user generated content will be sub par, but the quality of discourse and content produced on Backfence was very high. It was consistently thoughtful and never fell into “finger-pointing nastiness.” People genuinely cared about their towns and wanted to share what they knew with their neighbors. “That’s a surprise to people who come from a traditional background,” says Potts.

Biggest Practical Lesson/Mistake: Before a site can be successful you really have to infiltrate the communities. “You can’t just build it and expect them to come. You have to work the community. We did that, but not as well as we could have,” says Potts. Toward the end, Backfence started to learn what it took to get the attention of the local community, but it was too late, says Potts. To successfully market the site you have to hire people who really know the communities and get them talking to local groups, leaders and flyer. “At some point word off mouth takes over, but you got to get to that point.” That is the hardest part, says Potts. People who work on community sites say that it takes at least a year to get critical mass.

Money: The aim was to be sustainable and while Backfence hadn’t reached that goal, with 400 advertisers, it was about a year away, Potts estimates.The display advertising model focused on local business’s, charging $100-200 for an add which could be a “cash register decision” said Potts. An owner could reach into the cash register and get the money needed to advertise on Backfence right away.

An interesting discovery was that local business’s weren’t just buying advertising one month at a time, but for an entire year. Even plumbers, businesses that rarely use online advertising, were using Backfence to promote their services. “Nobody is really sophisticated about small advertising, but the pizza place still needs to an online venue to get new customers,” says Potts.

Future Goals: Since the demise of Backfence from internal struggles, Potts has begun consulting to big media companies and small start ups on user-generated content and hyperlocal coverage. He is currently working on another start up that he may be able to talk about at the conference. “It’s taking what we learned at Backfence and twisting it a whole new way,” says Potts. He actively blogs at Recovering Journalist.
What do you hope to get from people attending this conference?

“I’d be interested in hearing what people say about stuff that I’ve watched but not played with, like crowdsourcing. There are a broad mix of things I’m interested in and I look forward to hearing what people have to share.”