30 Mar 2011

Finding the "hyper-local" (or real) world in the digital one

PaidContent just put out its list of the top 50 digital media companies in the US. They base this on actual digital sales, either advertising or subscriptions or of content - with no numbers from traditional media sales (like printed magazines) and nothing from device sales, such as the iPad or Kindle.

The top spot goes to Google, of course, with more than three times the revenue of number two Yahoo. Spots three and four go to Apple and Microsoft.

Yawn. Pretty predictable, right?

Well, the list gets more interesting further down. This is PaidContent's take:

Businesses that generate digital revenue by selling ads dominate our list; companies that make most of their money selling online content or subscriptions took only 13 of the 50 spots. And while many traditional media companies may be struggling to grow their overall sales, they are generating significant revenue online. Twenty-one companies on our list have a substantial presence in non-online media, such as newspapers, phone books or TV.

Fair enough, but what struck me in the list is the prevalence of old-school, basic functions like Yellow Pages, hyper-local classifieds and sites focused on small businesses. In other words, this list was not all about the new fancy digital world (though that is there) but also about what makes our daily lives run in our immediate neighborhoods.

A digital Rotary Club, so to speak.

You've got three yellow page businesses on the list - AT&T (with YP.com and its 23 million monthly page views), SuperMedia (home of Superpages.com, among others) and the Yell Group (home of Yellowbook.com). And while AT&T obviously has other digital interests, the company entry on the PaidContent list deals almost exclusively with its printed directory business.

What do these old school print directory companies have that newer players lack? A big local sales force, it seems.

On another front, you've got ReachLocal, which offers marketing services to small businesses, and there is Classified Ventures, which runs the very local-focused cars.com and apartments.com, among others.

And one of the digital companies with the most buzz and fastest-growing influence right now is also hyper-local. Yelp.com allows people to review and rate local businesses and didn't even make the PaidContent list.

And to stretch this a bit, both Yahoo and Aol are making significant commitments to hyper-local news. Groupon is also decidedly local, as is, in the end, much of Google's advertising.

(An aside - local restaurant owners apparently are not in love with either Groupon or Yelp. Read this press release to find out why. I can't tell if they have a point or are just whining because their competitive world just got a bit more ... competitive.)

The lesson here? That the digital world is based in the real world. That our basic needs for information are not changing completely. That there is a lot of money to be made out there away from the glamour Facebook and Zynga.

Nathan Hegedus is a writer and editor for JG Communication, with a focus on magazines, white papers and corporate responsibility.

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