PaperG isn't the only company hoping to serve as an advertising go-between for local businesses. Lasso, an Austin-based startup, is focused on helping small businesses publicize discounts and special offers than on facilitating display advertising. Lasso's platform is designed with a collection of features that can be turned on or off depending on the needs of a specific advertising platform. This includes the option to ad geocoding for ads so that they can be used by location-based software such as Foursquare, a service that allows users to report their location to friends through mobile devices. Lasso's platform can also be linked to social media sites so that an offer can spread virally.

Services such as Groupon, which offers a daily deal in cities across the United States, have proved the popularity of special offers with customers. Lasso CEO Chris Treadaway hopes that his company can help newspapers in particular become hubs of such offers. Treadaway says local newspapers may be able to sell better ad packages to customers, and to provide statistics that make it easier to show the economic value of advertising over the Internet.

Online advertising for local businesses represents "the final frontier" for the ad industry, says Colby Atwood, president of Borrell Associates, a research and consulting firm based in Williamsburg, VA. But since so many technology companies are trying to leap into the fray, he says, many local business owners are confused by the spread of technologies on the market.

Atwood believes that while some small-business owners enjoy testing new technologies, many others feel uneasy because they don't understand the advertising packages they buy. "There's an underlying suspicion that maybe Web advertising isn't for me and doesn't work," he says. Because of the desire to get measurable results, Atwood says, there's been a huge growth in promotions such as coupons for local advertisers. Database management software has become much less difficult to use, and even businesses with limited resources can keep track of who's redeeming coupons and follow up with more marketing aimed at these customers.

Services such as those offered by PaperG and Lasso could prove useful in helping local newspapers sell advertising, even if they don't work perfectly, Atwood says. However, at some point he expects to see more consolidation in local advertising services.