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In this guest post, Damian Radcliffe highlights some recent developments in the intersection between hyper-local SoLoMo (social, location, mobile). His more detailed slides looking at 20 developments across the sector during the last two months of 2011 are cross-posted at the bottom of this article.

Facebook’s recent purchase of location-based service Gowalla (Slide 19 below,) suggests that the social network still thinks there is a future for this type of “check in” service. Touted as “the next big thing” ever since Foursquare launched at SXSW in 2009, to date Location Based Services (LBS) haven’t quite lived up to the hype.

Certainly there’s plenty of data to suggest that the public don’t quite share the enthusiasm of many Silicon Valley investors. Yet.

Part of their challenge is that not only is awareness of services relatively low – just 30% of respondents in a survey of 37,000 people by Forrester (Slide 27) – but their benefits are also not necessarily clearly understood.

In 2011, a study by youth marketing agency Dubit found about half of UK teenagers are not aware of location-based social networking services such as Foursquare and Facebook Places, with 58% of those who had heard of them saying they “do not see the point” of sharing geographic information.

Safety concerns may not be the primary concern of Dubit’s respondents, but as the “Please Rob Me” website says: “….on one end we’re leaving lights on when we’re going on a holiday, and on the other we’re telling everybody on the internet we’re not home… The danger is publicly telling people where you are. This is because it leaves one place you’re definitely not… home.”

Reinforcing this concern are several stories from both the UK and the US of insurers refusing to pay out after a domestic burglary, where victims have announced via social networks that they were away on holiday – or having a beer downtown.

For LBS to go truly mass market – and Forrester (see Slide 27) found that only 5% of mobile users were monthly LBS users – smartphone growth will be a key part of the puzzle. Recent Ofcom data reported that:

• Ownership nearly doubled in the UK between February 2010 and August 2011 (from 24% to 46%).
• 46% of UK internet users also used their phones to go online in October 2011.

For now at least, most of our location based activity would seem to be based on previous online behaviours. So, search continues to dominate.

Google in a recent blog post described local search ads as “so hot right now” (Slide 22, Sept-Oct 2011 update). The search giant launched hyper-local search ads a year ago, along with a “News Near You” feature in May 2011. (See: April-May 2011 update, Slide 27.)

Meanwhile, BIA/Kelsey forecast that local search advertising revenues in the US will increase from $5.1 billion in 2010 to $8.2 billion in 2015. Their figures suggest by 2015, 30% of search will be local.

The other notable growth area, location based mobile advertising, also offers a different slant on the typical “check in” service which Gowalla et al tend to specialise in. Borrell forerecasts this space will increase 66% in the US during 2012 (Slide 22).

The most high profile example of this service in the UK is O2 More, which triggers advertising or deals when a user passes through certain locations – offering a clear financial incentive for sharing your location.

Perhaps this – along with tailored news and information manifest in services such as News Near You, Postcode Gazette and India’s Taazza – is the way forward.

Jiepang, China’s leading Location-Based Social Mobile App, offered a recent example of how to do this. Late last year they partnered with Starbucks, offering users a virtual Starbucks badge if they “checked-in” at a Starbucks store in the Shanghai, Jiangsu and Zhejiang provinces. When the number of badges issued hit 20,000, all badge holders got a free festive upgrade to a larger cup size. When coupled with the ease of NFC technology deployed to allow users to “check in” then it’s easy to understand the consumer benefit of such a service.

Mine’s a venti gingerbread latte. No cream. Xièxiè.

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In this guest post, Damian Radcliffe highlights some topline developments in the hyper-local space during 2011. He also asks for your suggestions of great hyper-local content from 2011. His more detailed slides looking at the previous year are cross-posted at the bottom of this article.

2011 was a busy year across the hyper-local sphere, with a flurry of activity online as well as more traditional platforms such as TV, Radio and newspapers.

The Government’s plans for Local TV have been considerably developed, following the Shott Review just over a year ago. We now have a clearer indication of the areas which will be first on the list for these new services and how Ofcom might award these licences. What we don’t know is who will apply for these licences, or what their business models will be. But, this should become clear in the second half of the year.

Whilst the Leveson Inquiry hasn’t directly been looking at local media, it has been a part of the debate. Claire Enders outlined some of the challenges facing the regional and local press in a presentation showing declining revenue, jobs and advertising over the past five years. Her research suggests that the impact of “the move to digital” has been greater at a local level than at the nationals.

Across the board, funding remains a challenge for many. But new models are emerging, with Daily Deals starting to form part of the revenue mix alongside money from foundations and franchising.

And on the content front, we saw Jeremy Hunt cite a number of hyper-local examples at the Oxford Media Convention, as well as record coverage for regional press and many hyper-local outlets as a result of the summer riots.

I’ve included more on all of these stories in my personal retrospective for the past year.

One area where I’d really welcome feedback is examples of hyper-local content you produced – or read – in 2011. I’m conscious that a lot of great material may not necessarily reach a wider audience, so do post your suggestions below and hopefully we can begin to redress that.

What interests you about the UK communications scene at present?

TG:  There are two interesting things going on in the UK right now. One is the push for greater broadband and the other is the proposal for local television. We’ve been reflecting on those proposals in the shadow of the US experience, both with low powered television, which is not a big player [in the US], and public access cable which has historically been an important bastion of free speech and community content. We have had some frank and interesting discussions with many people about the lessons that can be taken from the US experience. 

What are the main things the UK can learn from the US?

TG:  When we look at truly local stations they fall into two categories; one is the local public and commercial stations that are quite formal and professional and then the local community focused stations both in the low powered radio space and cable access realms.

The lesson is that when you get to the local level you replace dollars with community engagement. The success of the best of those community stations are as a result of tight community engagement, real leadership and multi platform approach spanning everything from media literacy programmes online and offline, through theatres, radio, television and internet platforms. 

JC:  I’ve been particularly interested to hear that there are very similar conversations happening around business models. There’s a lot of frustration and questions on how to generate enough support for local media, whether that’s broadcast, newspaper or online.

There are conversations around innovation and the discussions we had at NESTA were very resonant of several conversations that we have both led and participated in over the last few years. These explored how to identify what the new gaps are, given the surge of the different kinds of media and the new accessibility, and how people can be incentivised and supported in inventing new things when there’s not necessarily a clear business model in place.

Are these big policy issues being discussed widely in the States?

TG:  In the community media space, the recent passage of the Local Community Radio Act will open up additional low powered stations in areas that otherwise would not have been able to find spectrum given the prior rules. There’s lots of energy around that.

There is also a set of people thinking about what public access television is in a “YouTube” age and how that plays out given the challenges to the business model and the fees. The income they survive on is a franchise fee from cable operators and those are under pressure.

JC:  There’s also a broad ranging discussion around the so called “crisis in journalism” and there’s some real debate about whether journalism is healthy and more exciting than ever, and that the crisis is really an advertising issue.

Or whether the crisis is in newspapers rather than news per se? How are things changing in the US?

TG:  People are beginning to embrace that news is now as much about data as it is about narrative. It requires a different but overlapping set of skills from those journalists required in the past. Is journalism solely a formal profession or is it something that audiences can contribute to? 

JC:  There’s a generalised decoupling of various news functions and there’s a wholesale re-examination of whether those functions naturally belong together or whether they can be repackaged and performed in different ways.

The other thing interesting thing is thinking about relationships between policy and practice. People are trying to learn from experiments globally, and apply those models, even if they are not exactly parallel. 

TG:  In a moment where policy moves slower than technology, the opportunity is sometimes at the institutional level to hack the content and remake media. This is a glass half full take on what is a very unstable moment. 

Those things aside, are there any other big topics that dominate the US policy and regulatory space?

TG:  We’ve had the recent merger between NBC and Comcast. That went through with minimal public interest conditions being placed upon it. There’s been the recent push back on the AT&T and T-Mobile merger. 

The other perennial debate is around funding of Public Service Broadcasting by the federal government. This has been contentious from the moment the first dollar was spent. In an age of austerity it is under examination at present, and it is likely to be contentious for ever. 

JC:  There’s also a real fear that draconian copyright measures will threaten the most vibrant and promising social media platforms. There’s a very strong pushback right now on that issue.

We’re having the same debate here, even though our markets are very different and people consume things in a different ways. There was the Hargreaves Review very recently and a sense that unless we update our IP and copyright regime then we may be hindering economic growth.

JC:  In the US, we have various fair use laws that we’re hoping people will continue to use to their full extent to keep them being infringed upon by corporate interest.

In addition, there is a tremendous amount of attention being paid around the globe to social media. People are using social media to press back against governments that are keeping their media systems closed and even just for social movements in the US and elsewhere. 

TG:  It’s important to think about the balance between the rights of consumers and the rights of the creators of content. 

Tell me about it, that’s something we try and do every day!

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If you were in any doubt about the increasing influence of Facebook, two things caught my eye this week, both of which demonstrated the impact of the social network.

In the US, Zynga, the maker of the Facebook-based hit game Farmville among many others, this week sold 14% of its shares, valuing the company at $7 billion. Markets clearly still value companies which make things, even if in this instance the ‘goods’ are virtual.

Facebook’s own IPO, widely predicted to be issued at some point in 2012, will surely see the social network valued at a much higher figure.

And the network’s dominance of the social sphere was clearly reflected in Ofcom’s sixth International Communications Market report, a weighty tome which compared the global communications market across 17 countries. It found that in the past year ‘Facebook’ was the most searched for term on Google in ten out of 17 countries, including Italy, Spain and the US. It was also the fourth-most searched for term in India and Brazil, confirming that Facebook isn’t just a phenomenon of the US and Europe.

Of course other social networks do exist – and are popular: Stayfriends with the second largest social network in Germany, for example, and Copains d’Avant, the third-most popular in France. 

Of all the countries surveyed, Top of the (social networking) Pops is Italy, where 91% of internet users having visited these sites online. Twenty-four per cent of them do so more than five times a day. Moreover, the average Italian also has more friends online (216) than the average user in the UK (168), US (198) or France (108). It was also the country where the highest number of internet users claimed to read news online (78%).

The impact of this for news outlets and journalists isn’t just that social networks are where the eyeballs are. They’re also affecting how we consume traditional media, with some audiences consuming less ‘heritage’ media as a result.

 

Source: Ofcom consumer research, October 2011.

Consumers are also using social networking sites to discover breaking news, with a third (35%) of UK consumers saying they do this, alongside nearly half of French (45%) and those highly socially networked Italians (47%).

As Facebook rolls out its Timeline service, and other developments designed to make the network stickier still, media outlets will have to respond to the challenge by somehow embracing the power of social networks.

Yahoo! has just announced it is rolling out its Yahoo! Activity news tool, to the UK and Europe, making story sharing easier; while traditional media players like The Washington Post have introduced their own Facebook app so users can read their content entirely within Facebook itself.

In March 2011, the hyper-local website Rockville Central, a Maryland-based blog, went one further by becoming Facebook-only, noting: “Facebook is where people, by and large, have decided to go for their first-stop online community activities. Which begs the question: Why have a separate site, and try to drag people away from Facebook? Why not go where they are?”

As the BBC’s recent Mark Zuckerberg: Inside Facebook programme showed, a wide range of businesses have been developed off the back of the network’s success. And while Zynga’s flotation is perhaps the most high profile, efforts such as Rockville Central show that this impact can be felt right down to a hyper-local level.

For innovation lovers, it looks like Facebook will continue to be ‘one to watch’ in 2012.

Damian Radcliffe is manager, nations and communities, at Ofcom. He is writing here in a personal capacity.

 In turn, I also wanted to share this recent set of slides from an internal ‘show and tell’ – which enabled me to come across a few new things. Thanks guys – proof if ever it were needed that it’s great to share!

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In this guest post Ofcom’s Damian Radcliffe cross-publishes his latest presentation on developments in hyperlocal publishing for September-October, and highlights how partnerships are increasingly important for hyper-local, regional and national media in terms of “making it pay”.

When producing my latest bi-monthly update on hyper-local media, I was struck by the fact that media sales partnerships suddenly seem to be all the rage.

In a challenging economic climate, a number of media providers – both big and small – have recently come together to announce initiatives aimed at maximising economies of scale and potentially reducing overheads.

At a hyperlocal level, the launch on 1^st November of the Chicago Independent Advertising Network (CIAN), saw 15 Chicago community news sites coming together to offer a single point of contact for advertisers. These sites “collectively serve more than 1 million page views each month.”

This initiative follows in the footsteps of other small scale advertising alliances including the Seattle Indie Ad Network and Boston Blogs.

These moves – bringing together a range of small scale location based websites – can help address concerns that hyper-local sites are not big enough (on their own) to unlock funding from large advertisers.

CIAN also aims to address a further hyper-local concern: that of sales skills. Rather than having a hyperlocal practitioner add media sales to an ever expanding list of duties, funding from the Chicago Community Trust and the Knight Community Information Challenge allows for a full-time salesperson.

Big Media is also getting in on this act.

In early November Microsoft, Yahoo! and AOL agreed to sell each other’s unsold display ads. The move is a response to Google and Facebook’s increasing clout in this space.

Reuters reported that both Facebook and Google are expected to increase their share of online display advertising in the United States in 2011 by 9.3% and 16.3%.

In contrast, AOL, Microsoft and Yahoo are forecast to lose share, with Facebook expected to surpass Yahoo for the first time.

Similarly in the UK, DMGT’s Northcliffe Media, home to 113 regional newspapers, recently announced it was forging a joint partnership with Trinity Mirror’s regional sales house, AMRA.

This will create a commercial proposition encompassing over 260 titles, including nine of the UK’s 10 biggest regional paid-for titles. Like The Microsoft, Yahoo! and AOL arrangement, this new partnership comes into effect in 2012.

These examples all offer opportunities for economies of scale for media outlets and potentially larger potential reach and impact for advertisers.  Given these benefits, I wouldn’t be surprised if we didn’t see more of these types of partnership in the coming months and years.

Damian Radcliffe is writing in a personal capacity.

Other topics in his current hyperlocal slides  include Sky’s local pilot in NE England and research into the links between tablet useand local news consumption. As ever, feedback and suggestions for future editions are welcome.

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The past decade has seen massive changes in the UK’s communications market. We’ve seen the launch of Freeview, Sky+ and the iPhone, as well as new services like the BBC iPlayer, YouTube and Facebook. Many of these are now mass-market technologies and services.

At the same time, the dial-up, landline-only, analogue four/five-channel TV home has become virtually moribund.

Certain technologies are now so ubiquitous that we forget how new they actually are. None of the above examples have yet to celebrate their tenth birthday, and several have only recently celebrated their fifth.

It’s hard to remember that ten years ago ownership of a mobile phone, multichannel digital TV and a domestic internet connection was far from the norm for most households. By 2011, that’s no longer the case.

The chart below illustrates these changes, showing the take up of communications services between 2000 and 2011. As you can see, the growth curves are pretty steep:

Source: Ofcom/Oftel survey research.

But, despite massive change, the size of the industry – if you take revenue as your yardstick – has remained relatively stable. Total annual communications industry revenues in 2010 were £53.4 billion, remarkably similar to the (inflation adjusted) revenues of £54.3 billion in 2000. Moreover, traditional industries like TV and radio have seen consumption remain relatively stable, even if there has been a proliferation of the methods by which we consume this media.

Perhaps not surprisingly, telephony-based services have seen the biggest changes. From the advent of 3G to the demise of dial-up internet, faster speeds and a greater choice of mobile and fixed providers, this is an area which has seen a massive increase in consumption.

Much of this has been driven by mobile, but it’s worth noting that in the UK fixed telephony still remains the main method of making and receiving calls for just over half of the UK population (53% when calls made from a fixed-line phone at work are included).

And while mobile voice minutes increased by around 350% between 2000 and 2010, we still – but only just - make more fixed voicecalls (i.e. from a landline) than we do from a mobile. No doubt it won’t be long before that is reversed.

What all of this shows therefore is that, despite massive technological change, we’re broadly doing what we did before – just doing it in different ways.

Whether we’ll be saying the same thing in ten years time is of course another matter. Until then, here’s a final chart which shows the story of the past decade as the UK became truly digital:

Source: Ofcom research 2000-10.

As LP Hartley says in the opening to The Go-Between: “The past is a foreign country: they do things differently there”. We did indeed.

Damian Radcliffe is Manager, Nations and Communities, at Ofcom. He is writing here in a personal capacity.