It seems like your biggest hurdle might be getting local advertisers in an area. Maybe I don't know anything about small-scale ad sales, but I would think that part of the business would really benefit from having local/regional people doing ad sales. Do you have a way to get around that? Is it a solved problem that I just don't know about? For that reason, it seems very obviously simpler to grow into regions, maybe not expand to the whole country at once.

Edit: I would have killed to have this service when I was in college. Props for making it work.