NowSpots are beautiful online ads that feature the latest social media updates from advertisers, and make it easy for a reader to follow and share their content across the web.

For the last year at WindyCitizen.com, a social network for Chicago news aficionados and urban explorers, we’ve been selling a simple version of NowSpots ads to small businesses and local colleges — and we recently won a Knight News Challenge Award to spin the format off into its own company that provides these ads to other publishers.

In a world where thousands of small businesses are signing up for sites like Facebook and Twitter every day, these ads deliver a more personal, dynamic, relevant experience than the banner ads offered by most publishers. NowSpots.com will provide these “real-time ads” to local publishers large and small. Over the next year, our team will be blogging our progress here. You can also receive an e-mail alert when we officially launch this fall by signing up at http://nowspots.com.

Why Do We Need NowSpots?

Local publishers need better ads. This is true for both the little guys and the big guys. The last few years have seen hundreds of neighborhood and small town blogs spring up around the United States. Many of these sites, like Lake Effect News in Chicago and West Seattle Blog in Seattle, are edited and published by journalists who left mainstream media to try their hands at something more entrepreneurial. Some of them are finding audiences. Some of them aren’t. But very, very few of them are making money.

A publisher reaching 1,000 people in their neighborhood each day on a local blog has only a few options for converting that audience into dollars: She could sell text link ads to local businesses looking to boost their SEO — but Google frowns on that practice — and unless her blog has a PageRank of five or higher, few businesses will be interested. She could place AdSense or some other cost-per-click ad offering on her site, but the payouts for readers clicking on those ads will amount to pennies and her audience will be subjected to bottom of the barrel ads that have nothing to do with the content they’re reading, thereby degrading their experience.

The third option, and the one chosen by a growing number of small, local publishers, is direct sale display advertising. With display ads, which are sold directly, the publisher has to get out and sell, but she will have better targeted ads that pay out at predictable rates, depending on how they’re priced.

The problem with this third option is that traditional banner ads — static or animated images that display an advertiser’s messaging each time the page is refreshed — simply don’t scratch much of an itch for small businesses. They convey brand awareness and help an advertiser get clicks. That’s great for a large advertiser that can afford to develop a strong web presence with high-conversion landing pages, but for the average small business that still doesn’t have much of a website even in 2010, clicks just aren’t that valuable.

Local businesses are looking for customers, not clicks; increasingly, they’re finding those connections on social networks like Facebook and Twitter, where they can interact in real-time with customers and potential customers. Once someone likes your business on Facebook, they’ve entered into a relationship with your business that can lead to sales. A “like” is therefore much more valuable to a small business than a click.

Our Goal: Get Local Ads Past the Click Economy

That’s where NowSpots come in. NowSpots are display ads on crack. They are inherently social ads that let advertisers step beyond the click economy and into what we call the introduction economy. When an advertiser buys a NowSpot on Windy Citizen, and soon, on other sites near you, they’re not buying clicks — they’re buying an introduction into that site’s audience and community. They’re buying a very specific kind of relationship that actually converts into sales.

If local publishers are going to make money on the web, they need better ads. NowSpots is going to be there for them starting this fall.

How You Can Help Us Make Local Ads Better

We’ve spent this summer assembling a handful of Alpha Publishing Partners. These are local publishers who talk to us about their needs, pain points and goals for online advertising. These conversations are informing our decisions as we develop our product. If you run a local publication or work at one that would be interested in working with us to make your online ads more social, less annoying, and more effective for advertisers, drop us a line at info@nowspots.com and we’ll get back to you soon.