Despite Groupon’s post-IPO troubles and repeated dismissals of the deals space as dead, local media companies are still turning to daily deals as a viable revenue source. “The deals space has leveled off,” says Patrick Dillon, president and co-founder of Deal Current. “Now, it’s going to start growing again.”
With the deals space focusing on unique opportunities such as concerts, sporting events and theater deals, local media companies find themselves perfectly positioned to use the recreation and event categories to showcase their market know-how. “Local media companies know their markets better than anyone through existing relationships with outdoor concert venues and activity centers,” says Second Street’s Matt Chaney. “These relationships are key as event organizers and venue managers look to unload unsold inventory quickly. Local deals sites are the perfect vehicles for this kind of last-minute inventory clearance.”
The daily deals arena may have had some well-publicized knockouts lately, including the firing of Groupon founder and CEO Andrew Mason, but that doesn’t mean that deals don’t hold a wealth of opportunities for local media. Matt Coen (pictured), president and co-founder of Second Street: “Local media companies are well positioned to own a large piece of the deals market thanks to their unique assets of loyal audiences and established brands, local sales forces and multimedia promotional reach. Today, it has become apparent that local media companies enjoy another key advantage over pureplays: economies of scale.”
Research firm BIA/Kelsey expects the deals industry to generate $3.6 billion this year, 86.9% over 2011, followed by a 23% increase in 2013.
Deals providers are partnering with credit card company loyalty programs to better track and target the frequent customers at the core of their business. Media companies are also experimenting with deal malls, according to Part 2 of NetNewsCheck‘s special report on the deals industry, while analyst Gordon Borrell warns there’s one more competitor to watch out for: yellow pages/local search companies.
In part one of a two-part special report on the deals industry, NetNewsCheck examines how media companies are taking less than 10% of the deals market but are well positioned to be pulling in much more and take on Groupon and Living Social, the big pureplays currently dominating the deals arena.
The new iteration of the Capitol Broadcasting-owned Raleigh-Durham TV station’s SaveCity daily deals program will not require users to pay upfront and will only charge businesses based on user interest.
Belo GM of interactive Joe Weir and a panel of media and daily deals executives told ILM West attendees that the crowded deals space needs to improve deal quality and find different ways to reach consumers to keep them coming back.
SeattleNow.com will offer the region’s shoppers daily deals, local coupon offers and discounts to area restaurants, as well as discounts to several national retailers.
CBS affiliate WFMY Greensboro-High Point-Winston Salem, N.C. (DMA 47) has launched daily deals site DealChicken as part of a larger rollout by parent company Gannett Co. to more than 50 markets across the U.S. by the end of 2011. Merchants have the opportunity to promote their local deal and business through online and TV advertising […]
Gannett Co.’s Denver NBC affiliate introduced the DealChicken daily deals service as part of the company’s nationwide rollout of the new service.
To win in the fast-growing digital advertising market, Web companies such as Facebook, Google and Groupon are increasingly wooing mom-and-pop businesses.
Amazon invested $175 million in LivingSocial last year, but Thursday it cemented a place in its own daily deals space by launching into the first local offering through AmazonLocal.
While local legacy media companies are eager to jump on the daily deals bandwagon, many don’t have the resources (or the expertise) to set up and manage such programs. So they turn to “white label” companies that can provide the necessary software and back-office support. Most white labels also help sell or “source” the deal — that is, find local businesses willing to discount their products or services for a quick jolt to the top line. Here’s a sourcebook of some white labels that have made inroads with prominent legacy media companies.
Local broadcasters, newspapers and others are among a rapidly growing number of Groupon imitators battling for a piece of the multi-billion dollar daily deal market. For the most part, the local media companies are turning to white-label platform providers so that they can build their own brand in the marketplace and potentially make more money. In Part II of this special report tomorrow, NetNewsCheck will provide a listing of the leading white-label platforms now working with local media companies.
BIA/Kelsey research found that about 92% of businesses that offer discounts through daily deals sites landed “quality customers” who typically spend about 60% more than the deal’s initial value, and Web companies are rushing in to capitalize on the trend.