Last week at Inman Connect, a real estate technology conference, Jeff Jarvis discusses two ideas we believe in:

1) Real estate professionals can leverage their networks to become hyperlocal media resources. And by doing so, they benefit from building the community networks they need to source referrals for their real estate business.

2) Real estate professionals should be thinking beyond what used to be the work of real estate sales. As the industry changes and makes real estate a much tougher career, Jeff suggests that Realtors, as hubs of the community, can build new local businesses, like social media marketing, based on the work they do with their community.

Here are six trends in 2012 that will impact hyperlocal media and business models. This was originally published at Street Fight last week.

1. Cross platform conversations

Livefyre and Disqus show glimpses of how conversations can move from Facebook and Twitter to online media and blog commentary. Local conversations happening on social media, especially Facebook, simply aren’t crossing over onto local media. Note the interaction on a city community page like San Francisco; it’s huge, but random in topic.

The big opportunity is to organize local conversations that are now happening on, say, the community page above, into topics like sports, culture, movies, things to do, business, family, etc. In 2012, cross platform systems that facilitate community engagement across all social media along these topics will develop. The current best example of local topical engagement is sports media like SBNation and Bleacher Report that encourage sports blogging and fan interaction at the local team level.

2. Influence peddling at a local level

The advent of Klout and other new forms of social influence tabulation mirrors the slow power shift of media influence from traditional to social channels. Anybody with a voice can build a following, and the new business models evolving around influence metrics allow businesses to reward influencers with the hopes of converting them into advocates.

On a national level, social influence has naturally followed the celebrities; Britney, basketball players and Obama come to mind. On a local level, social influence is still up for grabs. Many sports bloggers became part of the SBNation empire simply by being bloggers for their local team. The implied business model is local influencers will attract rewarding opportunities, whether it’s in the form of a media job or simply a perk from a local business wanting to engage them.

The recognition of consumer generated revenue opportunities

A candid consumer recommendation, or a compilation of great Yelp reviews, is far more credible for a business than an advertisement. Local businesses will be able mine and filter local conversations across the social media, and participate in social marketing their services to elicit favorable reactions and revenue opportunities. For example, high school and college students often use Facebook to set Friday night plans. The most influential of them will move crowds, and local businesses, like pizza restaurants and movie theaters, will build relationships with influencers using rewards, loyalty programs, or simply a friendly dialogue.

example: using Needium to create business building dialogue

Startups are developing to provide localized services to filter, monitor and engage consumers on behalf of small business. For example, Needium monitors Twitter for specific keywords and phrases such as “looking for a lunch spot in Union Square”, that signal consumer demand for their local business client, and then converses with Tweeters on behalf of their client. They are basically building a personalized geolocated mobile response system for local marketing.

Local brands move to app development

The rapid adoption to mobile platforms impels brands like Walgreens and Starbucks to create apps specific to the needs of their mobile consumer. Local brands are headed down the same path. Yes, being on Yelp, Foursquare and Google Places provides social visibility but it limits the consumer interaction to just a check-in deal. A local merchant should have its own app complete with loyalty program, special deals, inventory search and topical information that its customers need. Building a mobile app is still beyond the pale of 99.9% of local merchants, and it’s surprising I haven’t seen a startup financed to create turnkey mobile apps for small business.

Emergence of the local social media marketing agencies

The dearth of startups serving local business with mobile app development is indicative of a larger hole to fill: there are still few turnkey social marketing agencies serving the over 4 million small businesses in America. Local business needs turnkey solutions because the resources required to learn, implement and execute a comprehensive social marketing are daunting. 2012 will bring scalable turnkey service companies like Main Street Hub devoted to managing local social marketing for SMBs.

The New Role for Bricks and Mortar

Retailers can’t escape the impact of Amazon Price Checker and Groupon on their business. In-store price checking and daily deals threaten customer retention and profit margins respectively, and they certainly aren’t going away. So how will bricks and mortar remain relevant to, and more importantly, build loyalty from local consumers?

Before social media, the decision to visit a local business was based on personal need. Now, more decisions are based on serendipitous search for things to do, what to eat, where their friends are, and special deals. Bricks and mortar can position themselves to be destinations simply by making sure they are visible, preferably with attractive offers sprinkled here and there, in all the media consumer use to find them. They remain relevant because there are potentially more tangible reasons for people to go out! Foursquare and Yelp check-ins, events planning services like Meetup and Plancast, and mobile location services will be the currency that supplements local traffic to business.

The advent of Klout and other new forms of social influence tabulation mirrors the power shift of media influence from traditional to social channels. Anybody with a voice can build a following, and the new business models evolving around influence metrics allow businesses to reward influencers with the hopes of converting them into advocates.

Klout’s first foray into monetization, called Klout Perks, rewards influencers targeted by their client “advertisers” with products like Windows Phone or Moo business cards. The company is focused on delivering a rewards product like this to national advertisers like Microsoft and Moo because it is easier to scale campaigns nationally, as opposed to working with local advertisers in smaller markets.

So how can rewards programs based on influence be developed for local markets? When local influencers are identified and curated for either public or private display to a community, local businesses can “perk” them. Courting local influencers will have a larger impact for local business simply because the influencers’ networks and their target customer base are equivalent. There’s a reason why Klout focuses on the scalable national rewards model; most local businesses don’t understand social media marketing and daily deals strategies, and getting them accustomed to offering rewards is simply a huge education effort.

Local influence metrics are calculated differently than the simple adding up Twitter followers and Facebook likes. Johnny Lee, co-founder of LoClout, a company building a database of local influencers as a B2B service, says that local reach and engagement as the key influence metrics. Local reach defines activities within a geographic radius (i.e. how many followers are located in the same city as the influencer), and engagement defines how many of these followers, say, click on the influencer’s Yelp review.

Lee suggests several heuristic methods to assess engagement without access to the raw traffic data held by social networks. Popular user lists, bookmarks and “elite” memberships developed in Yelp, Foursquare and other networks can elevate influence status and be incorporated in the algorithm. Yelp and Foursquare checkins published on Twitter and Facebook can also be analyzed for retweets, shares and comments.

LoClout focuses on supplying this kind of local influencer data to brands and companies for marketing and analytical purposes. On the consumer side, Roost has developed a metric called Scorecard that measures local influence of Facebook accounts and pages. Kred.ly is also developing a consumer facing local influence metric.

The main hurdle associated with developing influence-based programs for local business is simply the challenge of marketing another new promotion method to a merchant inundated by pitches from Groupon, Yelp, Foursquare, and many others. Leveraging local influence will eventually become a powerful marketing tool, but it will likely take the field sales forces of social media marketing agencies and companies that channel local influencers like Yelp to develop these new business models.

Last month, Pew Internet published a media study on “How People Learn about their Community”. After the weather, breaking news – a real time ticker tape amalgam of Arab leaders being overthrown, earthquakes, sports scores, murders and accidents – comprise what locals look for.

Source: http://pewinternet.org/Reports/2011/Local-news/Part-2/Local-topics.aspx

So what do people look for in local news? It’s pretty mundane. Local news itself – the events coverage, the crimes, the accidents, the lifestyle stories – can by definition only appeal to locals. Ever watch the local news in a town you don’t live in? It’s an irrelevant time waster. Locals check news for items of personal connection and impact. Here is what they clicked on October 26 at the ticker tape Twitter feed of breaking Bergen County news in New Jersey @bergenctynews:

Source: # of clickthroughs on dlvr.it links displayed on Twitter account @bergenctynews and Facebook feed facebook.com/breakingbergencountynews. (posted in 2 routes means news item posted in both)

It’s easy to see the reasons why locals will click on these news items:

1) Locals click on news items of tangible impact, particularly those directly associated with the physical or financial well being of the community. FEMA assistance for Hurricane Irene, and rising pension costs qualify.

2) Locals always click on crime (the more prurient or horrific, the more clickable) and accident news to see if they know anybody involved in theft or prostitution, or got hurt.

3) Locals will click on news that affect their family circles and societies. What school would ban Halloween?

Note that Bergen County news is also broadcast ticker tape style on Facebook, where 2,000+ locals click on and discuss the news on Facebook. Facebook is a news channel that many indie publisher ignore because Facebook seems too personal to broadcast news. But Facebook’s community intimacy could potentially evolve into forums for local conversation as more people get used to using Facebook for business and data as well as personal connection.

Simply put, we see the same consumption pattern across all Breaking News feeds we monitor. One surprising conclusion for publishers might be that providing great local content is admirable, but a ticker tape of mundane news should be incorporated to keep locals coming back to “check up”.

from: BIA/Kelsey SMBs Embracing Social Media http://bit.ly/biaklocal

Yes, BIA/Kelsey’s survey says 48% of SMBs are on Facebook. However, the more telling implication of the above chart is how SMBs don’t even use marketing methods that have been around for a while (43% on email?) or are well recognized as effective (22% with blogs, most likely abandoned). At Street Fight Summit last month, Warren Webster mentions that 50 percent of the businesses in communities covered by Patch do not have websites. Simply put, local merchants simply don’t understand the new marketing rules, and have proven they aren’t keeping up with new innovations like email, let alone Yelp, Foursquare, and Groupon.

So we have this wide open Blue Ocean opportunity to service literally hundreds of thousands of SMBs who need to develop a social marketing plan. They need a turnkey solution provider who understands their locality and their business, and is affordable. With such demand, it’s surprising to see very few social marketing agencies operating at a local level. The hurdle may be that social media marketing demands smart local human resources for hands-on engagement and the cost of procuring that talent may not scale or be too expensive in the face of small SMB marketing budgets.

Hyperlocal publishers are well positioned to support their business communities by providing turnkey social marketing services.   Brian Kinkade created Apsides Media Group to provide local social marketing that works in conjunction with his ten local media sites in Denver. As a local media publisher, he not only offers to manage the local merchants’ social marketing but also has the media distribution platform to actually implement the programs. The new business model is to create subscription revenues by providing marketing services that engages his company with the client as opposed  to selling “rate card” advertising that is transactional and doesn’t engage the client beyond a pay for play level.

Social marketing services can be outsourced, but only to companies that understand the nuances of American social and business marketing culture (that means India can’t do this yet).  Main Street Hub is one of the first outsourcing companies I’ve seen that manages local merchants’ Twitter, Facebook, Foursquare and Yelp presence for $200-300 monthly subscription. Main Street Hub facilitates local social marketing by enabling publishers and agencies like Apsides to offer a scalable, hands-on turnkey service that is potentially more difficult to build and maintain locally.

Klout is known as a metric for assessing social influence. Like Google Page Rank, few understand what else Klout can do beyond being an iconic metric. One overlooked practical role that Klout faciliates is influencer curation. Through curation, brands garner good will by providing recognition, even rewards, to influencers who have synergetic relationships with that brand. Brands accomplish this on Klout by 1) developing lists of influencers and 2) giving influencers’ Twitter or Facebook feeds the “+K” as a badge or recognition.

For example, The Breaking News Network is a local media network devoted to community service and promoting local businesses, civic groups and nonprofits. As part of the mission to recognize their communities, managers of each city in the Network develop a portfolio of +K’s. First they import their curated Twitter lists based on topics like Events, Sports or Foodie.

Next, individual social media accounts are given +K based on a specific expertise. The more liberally +Ks are given, the more good will the brand collects.

By using Klout, brands like @breakingsfnews position themselves as curators and hubs for social media sourced local news, a role that traditional local media has not yet embraced.

The Revenue Agenda for Klout and other Social Influence Metrics

Klout can also be used to deliver good will in the form of “perks” with their revenue product Klout Perks. Perks reward high Klout score influencers with freebies that hopefully will induce a quid pro quo commentary or endorsement.

Klout Perks currently only delivers offers to a national audience. If Perks could be delivered to local audiences, local merchants would see Perks as an alternative to Daily Deals by delivering value to recipients of influence, rather than the one and done coupon clippers. All in the name of good will. Over at MediaBistro’s Socialize conference, Megan Berry, Klout’s Marketing Manager, says self service perks are on the product roadmap.

Companies measuring social influence like Klout, including Peoplebrowsr with Kred and Roost with Local Scorecard, are developing products that are ostensibly metrics but are really solutions to identify, target and reward consumer influencers as potential marketers. This will lead to wide ranging partnerships between online vendors and companies providing influence metrics data. The new metrics of influence will become more refined and tangible: influencers will be tracked for how many dollars their tweets and updates garner.

Twylah is a service that aggregates a Twitter feed and compiles the articles they link into a Flipboard like display.   Many reviewers have explained the mechanics of Twylah in far more detail than I can:

• Robert Scoble: “Twylah lets media brands and celebrities monetize their Twitter stream”
• Neal Schaffer: “Twitter SEO? Think Twylah“

We’ve been working together with Eric Kim, CEO, and Twylah to create “breaking news” Twylah pages for the Twitter feeds across our 300+ city Breaking News Network. These Twylah rendered pages are subdomains of our Breaking News cities, and can be viewed on many of our Breaking News cities by including the subdomain title “news” preceding the Breaking News URL, such as news.breakingsfnews.com.

The current iteration of Twylah pages sit separately from our Breaking News websites and don’t have a direct link to the website itself, only the Twitter feed. We’ve been waiting for Twylah to unveil their embed system so we can embed the page directly to the site itself. Thus, all of these subdomain pages are completely hidden, findable right now only through search engines.

So our experiment simply measures how Twylah performs to drive search engine traffic based on breaking news to hidden Twylah pages. Here are the results:

Approaching 900 uniques per day

Number of Google indexes over span of 3 months for selected news sites:

CONCLUSIONS:

1. It’s well documented that Twitter has become the leading social media for broadcasting “breaking news” nationally and locally. People constantly search for breaking news about a city. Twylah’s service allows breaking news tweets to be indexed and discoverable persistently, not forgotten as most tweets are (according to bit.ly, the average half life of a link on Twitter is 2.8 hours). Simply put, Twylah delivers organic traffic from sets of older tweets even when the pages it directs to are hidden (and therefore not discoverable by any other means).
2. Twylah automatically facilitates conversations around brands. Through Twitter, we can curate the key influencers associated with a brand and, through Twylah, deliver their commentary to an audience who wants this information in a coherent published format. For example, a well curated Twylah page can deliver real time information about specific movie openings by aggregating content from the media, arts and events publishers on Twitter whose use Twitter to monitor movies. Moreover, on the Breaking News Network, every city already has a set of curated local influencers across a variety of topics, so it’s possible now to develop hyperlocal Twylah channels devoted to movies, the arts, sports, or any other topic. This approach to hyperlocal branding is still in its infancy, and we’ll be focusing on this subject extensively over the next few articles.
3. Twylah, via Twitter, delivers a broadcast solution to brands that other social networks can’t. Eric Kim states: “We are targeting Twitter publishers (brands and personal brands), who consistently create and curate valuable content on any topic.” This type of “broadcast” branding is where Twitter excels over Facebook, which seems to moving towards developing its news feeds favoring personal transparency over commercial branding. It is especially powerful for delivering ticker tapes of breaking news and media feeds that wouldn’t be as effectively distributed across platforms like Facebook where such news might be perceived as excessive.

Check Facebook’s new “hybrid” news feed. You’ll see your friends, especially those well-liked baby and pet pictures posts. But you won’t see very many brands you once saw, particularly those that link to news, information, pictures and video. I myself subscribe to lots of media, and they have all disappeared from the feed.

The issue is being addressed at Facebook’s developer forum: Bugs - New news feed doesn’t show posts with pictures or links in them

Sure I like my friends’ pet pictures, but I now rely much more heavily on Google+ and Twitter for substantive conversations on and discovery of non-personal topics I’m interested in. Furthermore, there is no reason for any brand to advertise on Facebook because if they capture a “like”, that reader will eventually disappear because they won’t be able to see that brand’s future Facebook feeds.

I’m surprised at the lack of conversation about this issue because Facebook is alienating the commercial brands that are its customer base.

It’s the INUNDATION factor.

Since I do not intimately know most of my Facebook friends, I do not want to be inundated by:

1) Where they have checked in

2) What music they listen to

3) What they “like” on Facebook

Facebook’s new platform changes confirms their mission to broadcast (or a more kind term, to “share”) everything people do on social applications associated with Facebook by default. The new protocol is called “frictionless sharing” . This comment from Hacker News “Facebook is Scaring Me” explains the problem:

The reason why this bothers me is that there is no longer any EXPLICIT confirmation that I want to post something. Not sure who said it but I read it in a TechCrunch article, “Just hit play in Spotify and it will share with your friends”.

No, any sharing I do HAS to REQUIRE an EXPLICIT action on my part. I have to be in full control. Visiting a web site does not mean that I believe it will be interesting to my friends NOR do I want that information shared with people on Facebook.

A like button that shares, much like the Google+ 1+ button is perfectly fine, I have to hover over it, and choose my circles to share with, and then share. It is not automatic once I visit the site.

I don’t want articles automatically being linked just because I visited a page, or clicked play in Spotify, or put the toilet seat up.

It is not just privacy concerns, it is the image I try to convey while using social media sites where it is common place to be friends with your boss and or co-workers. I don’t need them knowing I like the Bloodhound Gang or that I read articles about atheism in the NYT but have never read a single article about religion.

Eventually all this collected data will be used against me. What if I do a simple Google search for cancer and I end up reading an article about it, that is now shared publicly, my insurance company a few years later gets a claim for cancer they claim it was a pre-existing condition and deny me coverage.

These are all scenarios going through my head. I am all for the interconnected web, and making it easier for me to introduce my friends to new content across it, however it has to be done on my terms, it has to require explicit authorization and must never do something automatically without my consent.

The reason we’re all seeing second-by-second updates on everything being listened on Spotify is likely due to the default checkmark that enables Facebook sharing (at the bottom of the screenshot). Spotify in fact now requires new users to be on Facebook so it’s automatic. Nobody gives it a second thought to uncheck it because it seems like a good thing.

"Get personal recommendations by sending music you play to Facebook's Open Graph"

When every social app defaults to frictionless sharing (and they all will because it is potent viral publicity), Facebook will become unusable.

It’s always been my philosophy on social media to contribute critical and interesting information related to my business, causes and hobbies, but not the daily personal life stuff that really doesn’t matter to the world.

Advice: turn off Spotify and other notification settings on Facebook app settings (Account Settings / Applications); you’ll likely need to go directly to the apps preferences page to turn them off manually. It’s a bother to do, and that’s why you’ll eventually be inundated with notifications from thousands of apps by millions of people who aren’t turning each one off individually.

I don’t think I’m alone here in hating this.

Journalists continue to search for a viable business model that supports online hyperlocal publications, but they won’t ever reach the threshold of revenues to maintain operations if they rely solely on traditional advertising fees from local merchants. That doesn’t mean local advertising is also poised to fall off a cliff. On the contrary, BIA/Kelsey states the prospects for online local advertising will double by 2015, but much of that growth will come from new mobile applications and daily deals category vendors. Here are five reasons why hyperlocal news faces hurdles to profitability:

1) Hyperlocal audiences are too granular to support traditional revenue models. Local banner ads aren’t economically viable. Traffic to online hyperlocal publications is inherently small due to geography, and total ad revenue based on CPM (cost per thousand views) won’t even cover the costs of the ad sales force.

Report on AOL’s hyperlocal network Patch.com’s traffic sourced from Business Insider “Leaked Reports on Patch traffic”

Article comment:

Chris L on Jun 24, 1:18 PM said:

If their page views really are only 783K for a month in So Cal, that translates to less than $5K in revenue for a month. I doubt they can build a sustainable business on that. Revenue = (783,000/1000)*3*$2 Assumptions: $2 CPM (generous) and 3 ad slots per page.

2. Local advertising alternatives are proliferating. Newspapers lost their classifieds revenue to Craigslist. The growing number of pay for performance business models including paid search, daily deals and the new mobile ad applications are cannibalizing media spending. Advertising options will continue to expand for local merchants, leaving a smaller piece of the pie to hyperlocal news.

3. Hyperlocal media resources are proliferating. Traditional media has relegated the business community to being simply the “advertisers” and not involving them in content sourcing. Yet on the local social media, many committed bloggers are the business owners who want to discuss their industry and community, and by extension market themselves. Traditional media needs to incorporate the business community as journalistic partners instead of trying to sell to them all the time.

New community service business models are developing that focus on engaging the community around local news and providing free advertising to businesses, adding further pressure on traditional ad sales. Facebook and other social networks may also evolve into hyperlocal community platforms that center on community sourced and shared news. In sum, hyperlocal news resources will proliferate as alternatives to traditional local media, simply because it’s easier to build these properties now.

4.  Local merchants are learning how to self market using the social media. Roost reports merchants believing it is four times more effective than paid search. Those merchants that can’t do it will be taught or be serviced by local social media / ad agencies, or even the traditional media publishers themselves. Gannett wisely set up GannettLocal.com to engage with local businesses as their social media marketing educator and partner.

5. There is a visible example of an unworkable local media model. Patch.com, AOL’s effort to build a hyperlocal news network from scratch even when local news revenues were falling, demonstrates and even confirms the high hurdles in building a profitable local ad model.

After a year and $150 million, Patch doesn’t seem to be gaining the revenue traction it needs to warrant further investment, and AOL is working with investment bankers on restructuring. The Patch exercise may shut the door on the idea of building a scalable hyperlocal network based on paid content.