With the exception of efforts like AOL’s Patch and New England’s GoLocal24, “Hyperlocal” has really moved away from its initial focus on neighborhood journalism to more of a focus on geo-targeted advertising and commerce.

Redefined this way, there’s a lot going on in hyperlocal. Today, Stamford,CT-based Local Yokel Media, a hyperlocal ad service started by Yahoo/AOL/Doubleclick vet Dick O’Hare, announced that it had raised $2.15 Million in its first institutional round. Backers include Connecticut Innovations, the Connecticut Department of Economic and Community Development and Gold Ridge Asset Management.

Local Yokel says it is distinguished by its network of local blogs and websites, including newspapers; ability to map ads to a very specific location; and the ability to develop unique and scaleable creative copy. The site is now working with publishers such as Hersam Acorn Newspapers serving Fairfield County, Connecticut and DNA Info, a local news site covering the neighborhoods of New York City and Chicago. Advertisers include Meineke Muffler, LL Bean, and 7-Eleven.

Last month I presented to the International Franchise Association “Fran Camp” conference in Atlanta. To capture and prepare for the presentation, I recorded some of the slides and audio which you can see in the video embedded below.

The point of the presentation was a crash course in mobile and local advertising . Not only is that a central theme for us, but is appropriate for Franchises which have combine national marketing resources with local orientation.

Because the presentation was made to Franchises, it’s not necessarily about franchises. However the last 15 minutes focus on our LCM survey and the Franchisee portion of its respondents.  The rest deals with mobile trends and case studies.

Assuming you don’t have the time (or desire) to watch the full 54 minute clip, the main chapters are written below in case you want to skip around to any parts that may be of interest.  Stay tuned for more video on these and other topics.

Presentation Agenda

– Mobile by the Numbers
– Local Ad Targeting
– Mobile Presence: Half the Battle
– Mobile & Social: Going Native
– Franchise Development
– Franchise SoLoMo Report card

The SMB payment space has been getting mighty crowded since Square’s 2010 launch. Major merchant acquirers such as PayPal, Groupon, Intuit, VeriFone, Heartland Payment, Swipely, Merchant Warehouse and Total Merchant Services have joined Square in the battle for small spending but high volume merchants.

Some may even be subsidizing payment fees in order to get around Square’s appealing, flat rate 2.75 percent fee (plus transaction). Groupon, for instance, has a 1.8 percent for its clients (plus 15 cents per transaction.) LevelUp waives the fee altogether for merchants who also run an ad program with it.

Now comes Punchey, a Boston-based, 20 person startup launched by Yodle Founder Nate Stevens. Punchey’s pursuing small merchants who typically use their Visa or MasterCard accounts to process payments over $50 (i.e. beyond food truck merchants and quick service restaurants.)

Like others, it hopes to use attractive payment processing fees to win accounts that will use other services, especially CRM, reputation management and marketing in general. It charges .75 percent on top of Interchange costs – which range from .50 percent to approximately two percent, depending on the card type and merchant risk.It includes a ten cent fee that banks charge to connect to Visa, MasterCard and Discover.

Stevens says Punchey will save substantial money for merchants that don’t need to simplify their business to flat but inflated fees – or bind themselves into high commission sales relationships in order to get a low processing fee.

Merchants start saving money on transactions over $18, with merchants saving 59 cents on a $50 transaction, he says. That translates to $4.55 on a $250 transaction, and $9.43 on a $500 transaction.

From Stevens’ point of view, Punchey’s found a niche that has much lower processor attrition rate than Square’s target audience of very small businesses. Moreover, successful merchants tend to graduate from operating with the single, personal cell phone that was Square’s original forte. Punchey’s typical client will have between two and 10 employees, he notes.

The company has been testing with 500 merchants around the U.S. for several months. Today, it formally rolls out a self-serve product geared to mobile service providers and businesses that take cards on the phone, such as carpet cleaners and contractors. It will soon launch a telemarketing effort for Brick & Mortar merchants as well, such as frame shops, bike stores and salons.

Today’s announcement that Gannett is acquiring the Belo television stations was certainly not expected. Even with the increased activity of groups acquiring many medium and small market stations, and last week’s announcement that Media General and New Young Broadcasting was being combined, nobody was expecting today’s news.

According to the BIA/Kelsey revenue estimates, together Gannett and Belo will vault to number 3 among local television station groups in terms of 2012 advertising revenues, only exceeded by Fox and CBS. These two companies have been strong broadcasters for many years and both have been very aggressive in developing new products and services to offer both to their local viewing public and their local advertiser clients. Successes from both companies into these new areas will certainly be applied to all of their new markets.

All of this station sales activity comes at a time when there continues to be new and strong competition both for viewers and for advertisers. While that new competition is very challenging for local television stations, many have embraced these new opportunities to expand their own offerings. This activity appears to be a strong signal that local television stations will remain an important part of the local media marketplace.

And this mega deal will more than triple the Year to Date (through May) total of television station sales value as monitored by BIA/Kelsey and is made available at on our Media Trends webpage.

Groupon founder Andrew Mason’s concept of Groupon as “the operating system for local commerce,” had a certain catch to is, but what does it actually mean in practice?

That’s the challenge being addressed by Groupon’s “Breadcrumb” team in Silicon Valley, which has rolled out a suite of services for restaurants and now, other verticals. Groupon is hoping that the Breadcrumb services represent a new source of revenue that can leverage the client relationship that Groupon has already formed vwith 500,000 merchants worldwide – perhaps 100,000 of those in the U.S.

Built on top of the Breadcrumb processing service acquired by Groupon in June 2012, two types of “Breadcrumb by Groupon”-branded services have been introduced.

The first is a full-featured “Pro” product that launched in October 2012 and includes such features as table management, discounted payment processing, full customer support, etc. Monthly fees for Pro range from $99 to $399, depending on volume and what is included. The second Breadcrumb product, introduced this month, is a free Point of Sales tablet product that will compete with Square and others at the low end.

A major inducement for SMBs to switch to Breadcrumb are highly discounted, perhaps subsidized payment processing rates, which for Groupon merchants, are just 1.8 percent plus 15 cents per transaction on Visa, MasterCard and Discover swiped transactions, or 2.3 percent for keyed-in transactions (plus 15 cents).

These rates compare favorably to other fees. Square, for instance, charges 2.75 percent plus per transaction fees. An added sweetener to switch is free processing for the first $5,000 of transactions – a move that might cost Groupon $150-$300 per merchant.

Groupon is also now selling pre-configured hardware boxes to help SMBs get started, including iPads, printers, routers – although items can also be purchased a la carte.

VP for Merchant OS Mihir Shah tells us that Groupon’s aim is to provide “mission critical” services for a wide range of local Brick & Mortar businesses, although restaurants currently dominate the mix. The Breadcrumb services leverage Groupon’s existing merchant list, and also seek to convert Groupon’s Mobile App users, which now account for 40 percent of all Groupon revenue. For merchants, “it is a way to perfectly manage yield,” says Shah.

Are Groupon relationships with its merchants as bad as the press has made them out to be? Shah maintains that Groupon’s merchant relationships are actually very good, and much more of a client relationship than the casual deal-to-deal relationship that it had when it was based entirely on email promotions.

With the arrival of ongoing mobile services (and social media), Groupon has moved to a “DealBank” relationship enabling merchants to pinpoint how many units they want to push through Groupon’s ongoing deals supermarket, or specific promotions. That keeps them in the Groupon fold, and carefully studying their analytics and marketing, he says.

“The retention rate is very high for deals,” says Shah. “Now we are helping you to run your business, and build your business. Our goal has always been to be a partner of these local businesses.”

During a Webinar yesterday, BIA/Kelsey’s Senior Analyst Mike Boland, along with Marchex VP of Operations Travis Fairchild and Head of SEM Cody Kunning discussed how businesses and those managing online and mobile advertising campaigns can best maximize performance with Google’s AdWords Enhanced Campaigns, which are set to kick off on July 22nd.

Enhanced Campaigns is a topic that has been talked about quite a bit over the last few months. It was discussed at BIA/Kelsey’s Leading In Local conference in March (read Leading In Local 2013: Enhanced Campaigns: Google Speaks), and Mikel Boland has written about it extensively (see Google “Enhances” Cross-Platform SEM: What Does it Mean? and More on Google’s Paid Search “Enhancements”: The SMB Angle)

Marchex brought additional firepower to the discussion. Fairchild, Kunning and team have spent the last several months testing hundreds of customer campaigns on the new AdWords Enhanced platform. Here are some of the key takeaways that advertisers must be aware of:

1. Do not wait to begin testing.. Boland, Fairchild and Kunning stressed throughout the Webinar that testing is critical to understanding how these changes will impact the way your advertising budget gets allocated. Google’s Enhanced Campaigns rolls out on July 22, 2013. The changes being made to AdWords are significant. If you fail to get the support you need now, you run the risk of wasting valuable advertising dollars when Enhanced Campaigns is launched.

2. Why is Google doing this? For advertisers, the new features should have some benefits and make management less manual. But one of the main reasons is that mobile advertiser adoption is accelerated through Enhanced Campaigns, because advertisers are faced with forced inclusion in mobile for all AdWords campaigns. This should help correct what Google sees as an imbalance between time spent in mobile and actual mobile advertising (see chart below). Google should see additional revenue from these changes as well. Supply and demand has kept mobile ad rates depressed. Greater mobile adoption, and higher performing mobile ad campaigns should help increase rates.

3. You will lose some of the ability you had to manage advertising by device. However, there are ways around this. Google has announced a mobile bid modifier, for example, that allows you to still run detail mobile campaigns. There also are geographic bid modifiers. Marchex recommends that advertisers locate the trigger points for budget allocation in order to gain some control over targeting by device. You will not be able to set a separate budget, as in the past, so how you set up your account will be key. This is why BIA/Kelsey and Marchex recommend you get started now. The learning curve is unavoidable.

4. Enhanced Campaigns require time for setup, familiarity, and the advertiser must know where customers convert and what they convert on. Device type, ad copy, device type landing pages, device type extensions are some of the key items. In addition to becoming proficient with setup, using third-party tools for tracking will be very important.

5. Call analytics is even more important than ever before, especially if you want to reduce volatility in CPL.

6. Both BIA/Kelsey and Marchex anticipate that CPCs in competitive verticals will increase after Google Enhanced Campaigns launches for three reasons. Reason 1: Advertisers will arbitrarily inflate mobile ad mods w/out analyzing return on spend to try to gain position. Reason 2: Advertisers will not properly optimize for quality score per device. Reason 3: Advertisers will not properly bucket keywords into similar bid ad groups to use mobile modifiers effectively.

7. Lastly, because Google’s Enhanced Campaigns will likely bring about CPC increases and potential headaches for advertisers, there is some potential for Bing to gain some market share from Google. Some advertisers have started to deploy more with Bing and have achieved favorable ROI. Boland, Fairchild and Kunning all agreed that increased competition can only help improve services and results for customers. However, it remains to be seen if Bing can make significant headway against Google.

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Register for BIA/Kelsey’s Leading In Local: SMB Digital Marketing, which takes place Sept. 11 – 13 in Austin. The program digs deep into the highest ROI for SMBs (and profits for their solution providers), and provides a first-hand look at the latest innovations and influential players in SMB-driven search, video, social media, mobile, promotions, CRM and reputation management. Register rates increase as the conference date nears, so take advantage of early pricing and register today.

Below Is The CoverItLive Twitter Coverage From The Webinar

After lots of rumors, and a weekend article from the Israeli based Globes.co.il, Google has announced it acquired mobile navigation company Waze. This comes after a rumored Facebook acquisition (see our writeup), the drivers of which apply here in lots of ways.

Though there’s some overlap with Waze, Google picks up lots of data to bolster its market leading position in mobile mapping. This goes back to the recent WSJ conference when Waze CEO Noam Bardin said, “Maps are for mobile what search is for the web.”

The highly data-driven Waze will boost Google’s existing position in mapping with not just real time traffic information, but  social signals such as where people are going and how they’re connected.  This goes back to our reasons for why Waze made sense with Facebook.

More specifically, Waze plugs right into Facebook’s product framework because real time status is the lifeblood of the news feed. In Waze’s case it would add an additional dimension to what you’re doing or thinking by adding where you’re going. It would be like Nearby on steroids.

The other reason this fits together is that Facebook is increasingly making location a key dimension of status, so that it has more content and “signals” to help you discover things. Signals can include current location, that of friends, places you’ve been, and where you might go next.

Stepping back, Google has traditionally been all about algorithmically determining relevance based on a combination of keyword and page prominence. But it’s increasingly trying to bring in social signals to surface relevant content for users. That’s what Google+ is all about.

Waze Real-time traffic navigation data can get Google’s mapping and local efforts closer to that world of status-driven relevance. Where you are is an important component of status, and Waze could take that to the next level: where you’re going and where you’ve been.

That makes mobile search potentially more relevant for users and more attractive for advertisers. For the latter, picture ads served based on where someone is going or their navigation history, not just Google’s traditional paradigm of keyword query or search history.

This could also boost analytics the same ways Google Wallet is hoped to do: closing the loop on the last mile to the cash register. Rather than clicks to determine ad performance, tracking navigation to an offline store (where most transactions happen) is the holy grail.

The other speculated acquisition driver is to keep Waze out of Apple’s and Facebook’s hands. So Google has both acquired a strategic asset, and kept it away from competitors — increasingly an acquisition criteria in today’s competitive marketplace among tech giants.

The acquisition price is rumored to be in the $1.3B range but this hasn’t been confirmed. Waze currently has 50 million users, mostly in the U.S. Israel, and a few other markets. Its users are highly engaged, and Waze will likely be maintained as a standalone brand/app.

There’s a lot more to this which we’ll continue to unpack.

In the run up to WWDC, we’re hearing the standard chorus of rumors about what Apple will unveil. These include iOS7, new OSX, and iRadio. For the latter, Apple just signed Sony Music to round out its licensing deals with the holy trinity of rights holders (Warner, Universal and Sony).

The yet to be named iRadio is long-speculated and recently the subject of a Bloomberg article. The much discussed piece predicts an ad-supported streaming music service that gives the relatively dormant iAd a new home. I’m skeptical for lots of reasons, but let’s look at a few possibilities:

Free on-demand music service, ad supported

This would be most like Spotify and Google Play in that songs can be played on demand. But instead of a monthly subscription fee (i.e. $9.99 for Spotify Premium) premium level service would be free, monetized through a combination of audio and display ads. As mentioned, this could be run by iAd, though the rumor mill seems to be underestimating the feat of transitioning into an audio ad network.

What’s interesting about this possibility is the degree to which it will disrupt Spotify and Google Play. The price tag is obviously attractive, while iTunes’ installed base and vertical integration with a speculated iRadio are scary prospects. If this happens, it makes the mobile ad industry suddenly a lot more interesting, with lots of implications for innovation in interactive audio ad formats (say that three times fast!).

Free music discovery engine, no ads

This would be more like Pandora — streaming music discovery that’s personalized and allows some degree of song selection. It would include on demand play of streaming tracks which a user already owns (through iTunes). And it would mix in new suggestions and discoveries in a Pandora-like fashion. The advantage of such a discovery engine over Pandora would be a rich bank of content — inherent in your iTunes library — on which to base discovery.

But the main play here for Apple would be a conduit to iTunes music sales through this discovery and “lean back” listening mode. This revenue opportunity would justify the lack of both subscription fee and ads — both of whose absence will drive appeal, usage and thus content sales.  That’s a scary concept because Apple’s treatment of free streaming as essentially a loss leader would undercut and disrupt Pandora’s core business of ads and subscription.  Pandora currently facilitates music sales to iTunes, but iRadio’s vertical integration with iTunes would make it a more seamless option. And by siphoning Pandora users, Apple would get more direct iTunes revenue versus affiliate revenue sharing with Pandora.

There are lots of other possibilities but of these two I’m betting on the latter.  There’s something about the persona of radio ads in the first scenario that is very un-Apple.  And we’re talking about a very brand conscious and quality-obsessed company here.

Among these potential  endgames that justify a free service, driving iTunes revenue could be more strategic than ads (or both?). But even greater than that, the biggest endgame for Apple is where it makes the majority of its revenue and highest margins: iPhone sales.

In that respect a free iRadio, unencumbered by ads, simply makes iOS more attractive (one reason Google launched Play was to boost Android’s appeal). The angle everyone seems to be missing is that that iRadio’s hidden charter could be to sell more iThings.

We’ll get a closer look during Monday’s keynote, and there’s a good chance all of this is wildly off the mark. One thing you can expect based on Apple’s halo effect and track record in revolutionizing music: Streaming audio growth will hit an inflection point.