IAC Vice President Kara Nortman, speaking at Interactive Local Media 2008, provided both a dose of reality and a glimmer of hope about where media companies in the local marketplace are headed. Nortman’s view of what is working well included sites that are building great organic traffic rather than relying on paid traffic, offering a unique distribution strategy at a cost-efficient price point and providing some level of a self-serve model to attract customers who cannot be affordably reached on the local level.

When talking about how best to attract and win local merchants, Nortman pointed out: “While a local field sales force is a significant advantage, it is only an advantage if there is enough of a merchant/advertiser base. So many smaller online companies are pushing for or building a large field sales force, which will likely hinder their growth and ability to break even.”

From a business model standpoint, Nortman views the local media landscape morphing into companies that bring together brands that build great content, own a robust distribution network, and can gain access to and retain local merchants. “These new media organizations may very well bring together several recognized local brands to become effective.”

Citysearch is a good model of this new local media company, offering an appealing advertising platform and bringing together merchants and content development to build sustainable consumer traffic, which helps local merchants to be successful.