The news: Hyperlocal community social network Nextdoor has launched AI-powered click optimization for UK advertisers as part of its expanded smart advertising suite. Nextdoor has 10 million verified UK users, reaching 1 in 4 households. 

Currently in beta testing, the feature delivered a median 75% reduction in cost-per-click (CPC) and quadrupled clicks for the same budget.

The tool uses machine learning to optimize toward clicks rather than impressions. It builds on Nextdoor's Ads Manager platform, which unified managed and self-serve campaigns in Q3 2025. Other refinements include the use of ChatGPT for copy and Pexels for images, neighborhood targeting precision, and expanded video formats like square and carousel ads

By the numbers:

AI-powered click optimization brings the following updates in ad performance:

• 75% median reduction in cost-per-click during testing.
• 4 times more clicks for equivalent media spend.
• Over 75% median CTR improvement versus CPM bidding.

Why it’s worth watching: The update reveals a broader shift toward AI-optimized bidding that prioritises action-based metrics over reach. Nextdoor is positioning its verified user base and local context as differentiators from larger social platforms, with targeting at neighbourhood level rather than broad demographics.

Hyperlocal and store-specific ads deliver the highest returns for 43% of quick-service restaurant (QSR) decision-makers in North America and Europe, per Koddi and Forrester. Nextdoor’s click optimization feature could exponentially increase these returns.

Implications for brands: For advertisers, the efficiency gains lower barriers to testing hyperlocal campaigns. Verisure reported significant improvements in cost-per-lead and ROI.

• The integration of generative AI for creative production further reduces friction for smaller advertisers.
• The platform's scale—reaching 25% of UK households—means these efficiency gains apply to meaningful reach, not niche audiences.

Brands should test Nextdoor's AI click optimization to drive hyperlocal campaign performance, and see how the feature improves impressions and adjust based on ad performance for when the feature becomes the standard.