Nextdoor is betting neighborly gossip can give it an advertising edge

Only 6% of marketers say AI is paying off in a big way. Here's what the winners are doing.

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

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.

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.

"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."

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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.

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.

Axel Springer, Insider Inc.'s parent company, is an investor in Nextdoor.