Nextdoor is betting neighborly gossip can give it an advertising edge

Nextdoor says it has a data advantage for marketers that Meta, Google, and Reddit can’t match: neighborhood gossip.

The hyperlocal social network exclusively told CMO Insider it’s launching a new tool for advertisers called Neighborhood Intelligence.

The company has mapped 350,000 individual neighborhoods — roughly 12 per ZIP code — to create what it calls a neighborhood graph.

Marketers can use the graph to see how people in different neighborhoods are talking about their brands and target specific geographies with ads on Nextdoor that speak directly to those conversations.

An internet service provider might serve different ads to a neighborhood that’s complaining about its reliability than to another that’s griping about its fees.

A brand could also use the graph to identify “lookalike neighborhoods” that resemble the characteristics of communities where its products already sell well in stores.

Nextdoor CEO Nirav Tolia told me that while its digital ad rivals have become extraordinarily sophisticated in finding users likely to buy products online, he’s betting its data will be more useful for businesses whose sales vary from one physical location to another.

Think car dealerships, solar panel companies, and restaurant chains.

Those businesses don’t necessarily want to spend their marketing dollars uniformly across every location — or even across a single ZIP code — Tolia said. “Giving them a way to target their advertising based on what their local needs are — that’s not something Meta offers,” Tolia added.

Pepsi is one such marketer that expressed an interest, he said.

On its face, the neighborhood graph appears to be a fairly niche proposition — a sophisticated tool that might struggle to attract enough advertisers to use it regularly.

He said that while brands can garner general consumer sentiment using social listening tools across platforms like Instagram, X, or Reddit, these tools usually can’t pinpoint where those conversations are happening geographically.

He said many consumer brands want sentiment data clustered by geography because product preferences can vary drastically across locations. “I really don’t think demand is something that we feel is the missing piece here; the missing piece here was building it,” Tolia said of the neighborhood graph. “We’ve been asked for it so many times.” Nextdoor said it’s initially focused on using the graph to target ads on its own platform, but could eventually extend it to advertising elsewhere on the web.

Nextdoor isn’t alone in packaging up the unique data about user behavior into an insights tool for advertisers.

Last year, Uber Ads launched Uber Intelligence, which offers anonymized, aggregated data about the journeys users take and their takeout habits.

Last month, DoorDash launched what it calls a retailer intelligence tool, Brand Center, which offers data that includes what consumers are buying and which products are substituted when the ones they ordered are unavailable.

Nextdoor’s launch comes as its ad business has shown signs of momentum after years of struggling to keep up with its larger rivals.

Analysts at Citi wrote in August that the company was seeing traction across advertiser verticals such as home services, tech and telco, healthcare, and financial services, crediting improvements to its performance advertiser tools and higher-priced formats like video.

The company, which makes most of its money from advertising and has around 110 million users, grew revenue 15% to $75 million in its most recent quarter, which ended in June.