Sponsored Content Moves Nextdoor
Until recently, Nextdoor, the hyper-local online neighborhood forum, was living off venture capital. Now the platform is seeking to monetize its massive audience and has implemented Sponsored Posts, allowing it to generate revenue, offer businesses an opportunity to advertise to potential customers and further streamline users’ News Feeds.
The new effort is limited: sponsored content is being featured in select neighborhoods from an exclusive group of businesses. Businesses participating in this program do not have access to neighborhood conversations, directories or user information. A username and location will only be available to a business should a user choose to interact with a Sponsored Post. Businesses were selected to participate in this pilot program based on the relevance of their services to selected neighborhoods.
Entities interested in advertising in the future can submit their information to Nextdoor at nextdoor.com/business. Sponsored content can come in the form of a banner ad in a user’s daily email digest or a Sponsored Post displayed in a user’s newsfeed. The platform is currently working with businesses to create content that resonates with the app’s persona and adds value to its users. During this trial phase, Nextdoor is seeking feedback from both neighbors and businesses on what type of content is most beneficial. Overtime, these posts will change to better suit the expectations of Nextdoor and its user base.
Nextdoor hopes that sponsored content will provide a range of benefits to businesses and users. Businesses can use this direct line of communication with local neighborhoods to generate word-of-mouth promotion among users, create local advocates, target hyper-locally by segmenting audiences and customize posts by ZIP code, neighborhood or address. Users currently see the same ads, but Nextdoor plans to develop targeting mechanics that will further tailor ads based on an individual’s characteristics.
The inclusion of sponsored content on Nextdoor is similar to most social media platforms’ business models in which revenue funds the development of the applications. Nextdoor’s appeal can be attributed to its hyper-local experience, free from the noise of larger online communities. Isolating users to their distinct neighborhoods has given Nextdoor a unique position of creating digital connectivity in the context of real world proximity.
Nextdoor has had specific guidelines prohibiting self-promotion. However, in the instance of Sponsored Posts, Nextdoor intends for them to serve as an opportunity for both users and businesses to connect and benefit from one another. To this end, users’ experience are expected to remain positive, perhaps even alleviating the burden leads and active members face in policing news feeds on a daily basis for self promotion. The shift to this revenue model also highlights Nextdoor’s move to a sustainable business model that they hope will position the platform to exist well into the future. As such, it further raises the need for cities to evaluate if and how they capitalize on Nextdoor to engage their residents.