Unique source of funding :) and a successful idea for selling hyperlocal ads

First off, the unique source of funding. I'm trying to win a $5,000 contest put on by Intuit ... they're giving away 50 $5000 grants and an opportunity to win $25,000 on top of that.

I put together two entries and both pertain to making a hyperlocal media site work. And certainly I'm not at all too proud to get their money :)

Here are the links:

http://community.intuit.com/contests/av8IAeuFiqllvkab8P4pmk

http://community.intuit.com/contests/doBO_EuF4qllvkab8P4pmk

The first suggests that media is, overall, entertainment. Fulfilling the promise of a positive - even fun - experience is a critical aspect of drawing an audience.

The second is more nuts and bolts and I feel great advice for anyone seeking to launch a hyperlocal media outlet. I'll copy and paste that entry because it is relevant to this topic and effort.

---------------------------

Pricing media and advertising is difficult and has only grown more difficult with the proliferation and popularity of the Internet. The problem is that the Internet has an unlimited inventory of advertising and like any commodity, advertising is subject to the laws of supply and demand.

Auction markets provide an answer for this but in most cases involving local advertisers and advertising, there is no accessible market tool to mediate and make that market.

Typically, local media will set a price for their product based on what they perceive as the relative price and value of their advertising. I had followed this path, setting a CPM (cost per thousand impressions) of $10/m for my standard banner ads on paulding.com.

What I discovered is that on my forum-based site, I was deliverying over 3 million banner views each month and was only able to sell a very small percentage at $10/CPM. Literally, while sales were being made - lets say I had 20 clients at the time - I was selling less than 20 percent of the inventory.

The result is that when you came to the site you were going to see nine non-paid house ads for every paid ad in the rotation.

At this very time, a group of folks who had been active on my site bolted and started a competing hyperlocal forum site. They adopted my CPM sales approach and hit the market with a great deal of energy. The situation was dire despite the fact my site had 10 times the audience.

My response was to create a market-based sales approach. The basic unit was no longer 1000 banners but simply a single share of the monthly banner inventory. Each share cost $50/month. The shares were sold with the understanding that I could sell as many shares as the market would bear.

The result was that every advertiser got the most bang for the buck I could give them (100,000+ banners for not $1000 ($10/M) but $50 ($.50/M). I no longer ran house ads. We explained the market-based pricing by telling the advertiser if they had the only share, they'd get all 3 million banners for $50. What a deal!

This approach undercut the competition on price. The competitors efforts to evangelize their competing message board only fueled interest in mine. With my first mover advantage, my site grew faster and has retained its 10:1 audience advantage to this day.

Most important, though, my advertisers were happy with the market-priced advertising because it was a great value and worked. I worked for me too, giving paulding.com the revenue to weather the competitive challenge.

----------

I'll add to this that this year I did increase the base share price to $70/share. We're also deliverying over 5.5 million banner ad views a month and I've obtained the coding to increase that to well over 10 million.

I've also started selling 'premium' placements of 100,000 banners to be run in the course of as few as five days. Pcom has enough inventory that I can sell five of the IMPACT packages a week and still have a 70,000 to 100,000 more banners per day to deliver to those buying shares. We sell the IMPACT placements for $250 for the leaderboard shares and the same package with tower ads for $300/week.

We're getting much better response from larger businesses (health care, jewelry, real-estate) with the IMPACT packages as the $70/share just seems too cheap for them.

Back to the side pitch for the Intuit (Quickbooks) contest. I believe voting and entries continue through March 20th and certainly it is open to others.

Since voting for the various entries is key to getting into the running for the initial grants, I would appreciate the effort of signing up on the intuit site and your vote.

I'm pretty sanguine on the chances but $5 grand would buy some highly desirable video equipment.