Couponing: The Medium Is The Massage

Everybody wants to sell you something.

These days, that includes TV stations that have raced headlong into online digital couponing — group buying programs and rewards programs, which have co-mingling parts.

Pick almost any TV station website and you’ll see enticements to join such programs, driven by the extraordinary success of Groupon. Belo has even started its own group buying service, Yollar.com. It’s now up and running at about a dozen of its stations, with more to come.

But others have opted for white label companies like Analog Analytics and Green Link. The former offers the Bigger Better Deal group buying software and support. It claims 850 newspaper, radio and TV clients, including KLAS Las Vegas, where yesterday you could to buy a $30 ticket to see comic Joe Lowers at the Alexis Park for just $10.

Green Link is running a rewards program PArewards for Newport’s WHP Harrisburg-Lancaster-Lebanon, Pa., and proven its worth. “I thought if I got 10,000 members in the first year that would be a very solid goal,” says WHP GM Holly Steuart. “We got 13,000.” 

Jonathan Agree, VP of program management at Green Link, says its rewards program is operating at some 25 stations, with a like amount about to kick off soon. He estimates there are probably 70 or so companies now selling their couponing and rewards services to TV and radio stations, and newspapers too.

Having looked at a lot of the group buying services in the last few weeks, I’ll tell you this: If you’re looking for a massage — I mean a legitimate massage — at a half-off discount, this program is for you. (Apparently, this is an amazing growth industry accounting for a good portion of the 192,000 new non-farm jobs in the last labor report.)

Likewise, it’s a great place for a consumer looking for a deal on a pizza, flowers, an oil change or yoga. KLAS, for example, touted a month of yoga classes for $30, a savings of $150. That deal enticed 173 buyers.

Analog Analytics’ deal with stations is typical. The merchant gets half of the purchase price. The station gets about 40%. The rest goes to Analog Analytics, along with the credit card company, which takes its customary transaction fee.

Merchants “pay” by offering a great deal to consumers — at least a 50% off. “That’s the magic number,” says Ken Kalb, the CEO of Analog Anayltics.  “Offering a free topping on a pizza doesn’t work.”

For stations, the group coupon concept is a perfect way to get non-traditional revenue on the books. A station wouldn’t likely sell a schedule of time to the small pizza shop that just opened up, or those suddenly ubiquitous massage joints, for that matter. But a small business might risk offering its inventory — or its services — at a huge deep discount to find new customers.

As Kalb puts it, “You can go to a business and say, ‘I’m offering you a risk-free deal to advertise.’ You could offer a kid right out of school the job to sell this.”

Kalb and a couple of station GMs I talked to also say when some merchants get their 50% cut of the deal, station rep can try to persuade them to use the money for a flight of on-air commercials. But lots of times the merchants are just too small to contemplate TV time.

Green Link doesn’t want its rewards program to be confused with a loyalty program where viewers get a chance to win station T-shirts and the like, but generally, don’t build revenue. “Loyalty sometimes seems like a four-letter word in our business,” Agree says.

Instead, Green Link offers a rewards program, much like the kind airlines have. Members watch the station to discover the day’s special word. That’s worth points to them that they can cash in with local vendors for merchandise or services.

Agrees points out that Green Link helps sell its reward and group buying programming. It collects data on the markets it serves and uses a Las Vegas sales call center to find willing participants.

Agree hints at upcoming deals with sports franchises and says the company is also pursuing deals with syndicated programs, which often already have fan sites.      

Agree says the e-mail addresses that station collect through the programs can be used not only for e-mail marketing, but for other purposes. One station sent e-mails out asking respondents to suggest who should replace the morning anchorwoman who was leaving. “It can be a built-in focus group,” he says.

WHP’s Steuart sees the online programs as a way of going after smaller merchants and service providers.

“You know, some people call small advertisers the ‘crumbs’ of the business,” Steuart says. “I never think of them like that. I realize this is a way to make a connection with smaller businesses in this market. I see someone starting up a business and I think they’re too small to advertise on our air, but if they do a little deal on PArewards, it could really get them known.”       

Stations can also use their online programs to sweeten relationships with on-air customers. In Harrisburg, the circus is coming to town and WHP figured a good way to get more of the commercial buy would by offering some discounted tickets. “It’s a feature we could offer the advertiser that none of our competitors could,” Steuart says.

In fact, she adds, now that Groupon has entered the market, she’s happy she jumped into the business a year ago. “It’s a weapon you want in your arsenal that you don’t want your competition to have.”     

But many stations don’t get the idea of offering advertising that isn’t paid for in a traditional way. “It’s a fundamental thing,” Kalb says. Station executives “keep asking, ‘Where does the money come from?’ It’s the thing we most have to explain. It’s amazing how many times we go through it before they get it.”

Market Share by P.J. Bednarski, all about TV sales and TV sales people, appears every other week in TVNewsCheck. Bednarski is longtime TV reporter and a former top editor at TV Week and B&C. If you have comments on this column or ideas for future ones, contact him at [email protected]. Read earlier Market Share columns here.