Mark Glaser, our host on Mediashift, asked:

“ … is there something (hyper-local news sites) can offer the businesses beyond just a display ad or a place in an online directory? Is there a more creative partnership they might have, where reader/contributors could give the business honest feedback on the site — positive and negative?

Paulding.com, for those who are aware, is based on a simple message board shtick. We have a front page with news but the majority of the action – some 2200 posts a day – occur within the forums. These posts are typically viewed by members who navigate to the user generated content via the recent topics page.

We describe the recent topics approach as the community’s conversation and we liken the banter that goes on about businesses as that most coveted of ad-types, word of mouth.

With nearly 15,000 members, the site provides business people who can participate in the community, a tremendous opportunity to network, make friends and find new customers. Because our mediation of person-to-person conversation is public, our assertion that we’ve packaged “word of mouth” and sell it to businesses is not without foundation.

The opportunity to solicit and benefit from word of mouth advertising is available to those who purchase a premium commerce membership on Paulding.com and represents, I believe, one example of the type of creative partnerships possible when a hyperlocal news/social site seeks to compete in the advertising marketplace. If only the execution were as clean and simple as the concept.

Businesspeople Interacting on Forums

The Paulding.com commerce membership is an annual license that provides the business with permission to post commercial messages in the proper forums as well as include an advertisement (banner ad, business card, youtube video business card or other graphic/image/display of less than 50kb and sized less than 200 pixels tall by 500 pixels wide.) in their ‘signature’ on the site. They may also have a business related graphic in their avatar. These permissions mean that they are distributing their ‘business card’ with each post they make. Commerce members, on average, have about 470 each to their credit and their posts represent about five percent of all posts on the site. The average member accounts for about 125 posts.

This means that participating businesses, rather than sitting in their business (or home) waiting for a customer to arrive, have discovered they can go on Paulding.com and drum up business in real time. (With a different 200-300 people on line from 9a to midnight, there are people always around to talk with.)

They may post a specific offer but then they may just do a little networking by posting a congratulations to this person, comfort a member who lost their pet in another topic and join in the righteous indignation another member feels because someone ran a stop sign and hit their car. It is all networking and getting known … and getting known in more than the one-dimensional manner that is common in todays fast-paced life.

They can also encourage their customers to go on paulding.com and talk about what a great deal they got from them. These customers are also available to recommend the businesses (both commerce members and non-commerce members) they work with and use. While far from a structured database, this information is searchable through the site’s database. In many cases, the recommendations also show up on a search on Google.com.

There are a few other perks including a free personal premium membership (the member might want to say something that is too controversial and they might not want it associated with their business), the ability to post HTML code (formatting and even items like paypal payment code), a gallery, a blog, significantly larger uploads and storage limits and an extra large private message box. Commerce members can edit their posts forever, close their own topics and even delete their own topics. We also offer meet and greet events to allow our commerce members to network with each other in person.

Protection from Negative Posts

Commerce memberships, as the biggest dollar memberships, also earn those subscribing to that membership level some ‘protections.’

The first and most important protection regarding commerce members is that regular members are not allowed to post a negative or derogatory post in a commerce-related topic started by that commerce member. This simply means that if a member wants to rain on a commerce members’ parade s/he must start their own post to do so. They may not ‘ruin’ or compromise the advertising started by the licensed member in a post started by that commerce member.

For instance, we have a new fresh meat market as a member. If they come on and advertise Rib Eye Steaks for $8.99/lb. and another member came on and said that another store had them on-sale for $6.99 as a reply to this commerce members post, they would have their post set invisible and be sanctioned.

Under our rules, there would be no sanction if the member had started their own topic with “Ribeye on sale at Hiram store.” However, if the situation were reversed and a member noted that a store that was not a commerce member offered their steaks at $9.99/lb and West Metro posted they offered them at $6.99/lb; as a commerce member their post would be okay. Competing commerce members are prohibited from posting in each other’s topic.

The second protection provided commerce members is that for their real world competitors to post on the site or even have their business name as a member name, they must also become commerce members. This means that commerce members are protected from their competition as long as they are the only business in a particular field. When we have one business as a commerce member, it is common that a few other competitors will also join.

Complaints about businesses have been one of the tougher areas to moderate — commerce member or not. Indeed, during the first year before we offered commerce memberships folks would trash some businesses regularly suggesting all sorts of behavior, both legal and illegal.

Because of the section 230a exemption, I wasn’t not concerned about being sued successfully for statements made by a member about a business. In that time members had broad leeway. However, in the tradition of give ‘em an inch and they’ll take a mile the fall-out from that lassez faire policy had created in the minds of some in business that the site was bad for local businesses.

Dealing with Complaints and Reputation

As I envisioned this as a commercial venture that reputation had to change. Early efforts to curtail the complaints lodged by members toward any businesses (members or not) put the site’s management in conflict with many of the more vocal members on the board. When push came to shove, I removed the offending posts and went toe-to-toe with the complainers on the site to explain my action. These kinds of conflicts continue; in fact they just come with the territory. Here is a recent topic. I consider these teaching opportunities.

The policy that has evolved is one that allows members to comment on most businesses both with recommendations and criticisms over elements of service and style. For instance, it is not considered improper for a member to post a health department score on a restaurant.

Businesses that are not commerce members are prohibited from having their business names in the titles of the topics regardless of whether it is a kudos or slam. I reserve the right and may exercise it in the case of a commerce member to remove their name from the topic title if they are being mercilessly slammed. I would also move the slam against a ‘current and paid’ commerce member to an optional (password) forum if for no other reason as to deprive Google the content on a supporting member.

Allegations of tortuous actions on the part of businesses are, however, handled differently. As the site is in no position to judge the merits of a legal case in which a person alleges real money damages, our rule is such complaints may not be posted on the site without evidence that a civil (or criminal if that level of activity is alleged) complaint has been filed in magistrate or superior court. I should add that unlike national sites where literally hundreds of jurisdictions may be in play, the hyperlocal setting means generally that recourse in local courts is usually available.

A relatively recent example was the complaint by a car owner that the brushes used at a local car wash had scratched her car. She came on the site to complain and allegedly warn folks not to use the car wash. Among my concerns when I hear these kinds of stories is the motive behind such complaints may be to gain a competitive advantage for another business. None of the businesses involved were or are commerce members. Regardless, I removed the post and invoked the ‘file a case before you complain’ rule and I’ve heard nothing more about this incident. Bottom line: If you want to talk about it, go swear out a formal complaint and bring the filing by and then I’ll either do a news story on the incident or I’ll let the complainer post.

It should be noted that when one follows the “file first” protocol the poster is also protected in that court filings are privileged and the republication of the information contained in them are not subject to libel.

As an open forum we also have a few businesses that fall into the category of persistent leeches. Either they or their employees come on and plug their business in an effort to circumvent the site’s commercial nature. I’ve dissuaded a few by threatening to put in a word filter that exchanges the business name for the name “advertising cheat.” The really good news is that in regard to enforcement of these rules, the existing commerce members are diligent in reporting violators.

Revenues and Retention

With over 135 current commerce members I can report that revenue from these memberships pays the rent, phone, electricity and the T1 Internet connection.

Our retention rate for commerce memberships is greater than 70 percent overall. I’d have to estimate that 95 percent of those who are active posters renew.

In addition, more than half of those who sign up for commerce memberships also supplement their premium memberships with banner ads and directory listings. I should add that commerce members are not required to enter into a contract for banner ads. Non-commerce members who wish to purchase banner ads are required to purchase a three-month minimum contract.

It is important to know that commerce members are almost all locally owned and operated enterprises and some are quite small … at least in the beginning.

We’ve had limited success with national or regional franchises largely because there are so few successful ‘hyperlocal’ media outlets that this genre of advertising business is largely unknown outside the county.

Entrepreneurs Get Feedback

The $99.95 membership is a great first advertising tool for the fledgling entrepreneur. I’ve seen it used by several members to get instant feedback on the product(s) offered. Using the instant feedback of the forum is a tremendous benefit for the startup and it can easily help determine things like operating hours.

That use has helped one of the most successful commerce members expand their business. In the beginning they offered general handyman services and focused their effort at networking around volunteer work with the local humane society. Active in those topics and others, this member has expanded her business and, with help from feedback, now holds an additional commerce membership for a new pet furniture product line developed with feedback from the consumers on the site.

Another sells home-made soaps, lotions, salts and the like and is known to offer ‘gift baskets’ at auction on the site for charities including the Humane Society. Heck, they created an ecommerce site for the Humane Society that provides that group with profits from sales that site generates. This business member also markets their goods through other retail commerce members on the site and they’ve created a sort of mutual admiration society where they help promote the businesses that stock on consignment their goods.

In one of the recent discussions, this member Bruce wrote: “I will also add to Scarlet’s sentiment that pcom is 90% of our business. pcom brings more buyers to our site even though I get more referrals from Google. My bounce rate (those that leave the site after one page view) from pcom is 48%, with google it is 64%, the national average and target range is a 77% bounce rate from search engines.”

Indeed, that bit of word of mouth touting the success of paulding.com sums up what commerce memberships are all about … which is word of mouth.

GP Hughes

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