For obvious reasons, I’ve long kept an interested eye on Patch – AOL’s venture into hyperlocal.
Or rather Tim Armstrong’s venture into hyperlocal.
This week, news emerged that Armstrong and AOL were having a re-think; or rather a retraction. From going boldly forth, they were folding back in; trying to work out which of their numbers made sense.
The Forbes piece suggests that Armstrong has found a new love in the shape of $405m worth of ‘programmatic’ video ad tech that is Adap.TV. Interesting that the piece quoted the ‘insanely complex’ nature of the display ad business, citing our old friend the LumaScape by way of example.
Armstrong is banking on there being massive ‘consolidation’ in that programmatic ad tech space; the merger of Omnicom and Publicis is likely to merely fuel that process as they gun to deliver ‘black box trading techniques’ honed on Wall Street into this space – alongside genetic algorithms and artificial intelligence when it comes to placing an ad just there…
AOL clearly want a stake in that complex game of algorithmic hide and seek.
For 300 of Patch’s hyperlocal out-posts, the future is a little less certain. The Patch ‘network’ is about to become less ubiquitous, not more.
A fact not lost on one of Jeff’s commenters…
‘The brand, of course, has value once it becomes ubiquitous (900 towns, spread around a few score metro areas is not ubiquitous)…’ says Tim Windsor.
Ask Claire Enders and she’ll tell you - ubiquity is everything. You have to be able to go anywhere; a fact lost on the powers that be at OfCom/DCMS re local TV.
What’s interesting when you dig a little deeper into the current ad mechanics that sit behind an individual Patch site -Maplewood being my example – and to take out an ad on that site requires someone to fill out a form in order that a Patch sales rep calls you back…
It’s here. And this is 2013. That’s Stone Age ad selling; at Stone Age expense.
In fairness, they are no different in that to to LocalWorld’s Local People solution – arguably the nearest the UK has to a Patch-type proposition. That again requires the cost of a ’sales consultation’
Go on to an individual site – say, Bedlington People - and the failure of the existing ad tech to deliver appropriate advertising into such local spaces becomes ever more apparent.
The choice that greets me is overwhelming – I can discover the shocking secret to a new diet, a controversy over a new steroid alternative or a woman who is 53, but looks 27. It doesn’t actually say whether she’s from Bedlington or not.
This is the big, big challenge that faces all the big media groups trying to crack hyperlocal. And this includes Guardian Media Group and their short-lived foray into all things local.
Their current ad kit isn’t fit for local purpose.
The challenge – amongst many – is for the various commercial and marketing heads within such organisations to stick their hands in the air and admit as much to the board; that their efforts at cracking local are getting lost in the LumaScape.
‘National to local only works in a top-down model…’ was mighty AdLand’s claim.
Your current kit doesn’t work. And how many national brands seeking local advertising opportunities would place their faith and their ad spend on the LumaScape delivering any better?
There was an interesting line in that piece from NetNewsCheck.
Asked how Armstrong still intends for Patch to turn a profit by the final quarter of the year, he insisted that they still had a clear focus:
‘…the Patch platform needs to allow people to get high quality local information, upload and share information and allow for people to transact advertising and commerce using online tools. Armstrong said all investment in Patch will be focused on those areas.’
It needs to allow for people to transact advertising using online tools…
Which is all-but admitting that the kit AOL currently has at its disposal… isn’t fit for local purpose.
The question is whether Armstrong seeks a programmatic solution to his local ad woes… or allows people to place ads themselves. And takes that algorithmic element of chance out of the Maplewood equation.
And to improve his chances of national and regional brands buying into that Maplewood audience, he has to find a new way to gain ubiquity; or at least pick a patch and demonstrate what can be achieved within that local construct first.
Which is Mr Windsor’s suggestion…
‘[I suggest...] Patch learn from its own example and not try to do it everywhere, but pick one geographic cluster as a laboratory and work out the kinks before trying to scale it large.’
Good thinking. And you know what, we might even be able to help…