Archive for the ‘advertising’ category

Aggregators sorting daily deals in surging ‘group-buying’ market

November 6th, 2010

Wes Bos, 22, is the founder of Deal Page, an aggregator that helps consumers sort through various offerings from group-buying sites.

Today, group-buying is all the rage online, with huge discounts offered in cities around the world. However, as copycats crop up each day to cash-in on the trend, it’s increasingly difficult for consumers to follow everything.

Group-buying online allows consumers to group together to get better deals or discounts when purchasing products or services. Using various new websites, consumers are given deals by email and the only catch ? and the reason why group-buying has been so successful ? is a minimum number of people need to buy the deal for it to become official. In order to hit the minimum numbers, consumers often encourage their friends to get in on the deals by sharing details of each deal through social networks such as Twitter and Facebook, ensuring the minimum numbers are met and helping companies to grow. It’s an ideal business model because everyone wins.

Getting deals online shows no sign of slowing down. It’s backed by hundreds of millions of dollars in venture capital, it’s spreading into virtually every major market, and media companies are jumping in and acquiring start-ups.

The king of group-buying is still Groupon, a two-year-old Chicago start-up that has been called the fastest-growing company in Web history, generating an estimated $500 million in revenue this year.

This week Facebook also announced it was also getting into the business with the launch of the Facebook Deals platform.

Depending on the city you’re in, the list of companies that are emerging to offer group-buying can be dizzying. In Toronto, for example, there are at least 24 companies offering discounts on merchandise, restaurants, laser hair removal and more. There’s Groupon, Teambuy, LivingSocial, WagJag, to name a few.

The group-buying game has also become so niche that there are sites set up for sections within cities; in Toronto, there’s a site targeting people who walk through a large underground walkway called “PATH” and deals only come from businesses within the underground.

The explosion of daily deal sites leaves a lot of opportunities for consumers to save, but it can also be challenging to navigate through the dozens of local sites to see if one has a better offer than the other. And if you’re not interested in the yoga offer from one company, you may be interested in the restaurant discount from another. But who has time to visit dozens of group-buying sites to check out the deals?

That’s where Deal Page fits in, a start-up aggregating start-ups. With a quick glance, visitors can see every deal being offered in a particular city, all at once.

Founded by 22-year-old Wes Bos, Deal Page aims to provide a one-stop shop for everyone looking for deals in their region. The site was launched at the end of September and Bos says it’s expanding quickly just through word of mouth. It’s available in Canada only right now.

“Traffic is currently around 1,200 daily visitors and growing each week as people tell their family and friends,” Bos said in an email interview. “I love to create things and this was an excellent side project that I could continually improve on. I’m a Web designer and developer, so taking a break from client work to hack away at something like this has been really nice.”

Bos’ side project has grown from a Toronto deal page to catering to visitors in 11 cities across Canada. As the site gets more interest, Bos says he’s looking to expand.

“I just brought on another guy to work on the site with me, so we’re planning on launching in a lot more cities with support for RSS, email and mobile,” Bos said. “Right now we’re focused on Canada but looking at the United Kingdom, Australia and the United States to see what would be best to get into.”

So what’s in it for Bos? In addition to providing consumers with a website that lets consumers see all city deals in one place, Bos can also earn money by referring people to each service.

“My first group buy was for a coupon at a local pub,” Bos said. “I bought it and then shared the link on Facebook. A few days later I logged in and was surprised to see I made $40 [in referrals]. So once all these sites started to pop up, I was getting more and more email and I thought about creating a page that pulled in all of the latest deals in Toronto.”

Deal Page was created using publicly available data group-buying sites provide in order to spread themselves among the developer community. Using their APIs and what Bos calls “some secret sauce PHP scrips that run every few hours,” the site essentially creates itself dynamically using data provided to it.

Bos says he can put together a new deal page for a city in about 20 minutes or so, depending on what data is available.

With the rising popularity of these discount-deal sites, group-buying aggregators such as Deal Page are also increasing in popularity and Bos is not alone in the industry. DealGator and CakeDeals, to name a few, offers similar services.

“There are about 130 daily deal sites in North America right now,” Simon Wong, co-founder of CakeDeals, said in an email interview. “It was very inconvenient to visit multiple deal sites or to receive multiple emails every day. In order to make our own lives easier, we made a simple aggregator that allowed us to see all the deals in one place.”

CakeDeals launched a month ago around the same time as Deal Page and has attracted 10,000 visitors to the site in the last month. The company is running in 13 cities, including seven in Canada and six in the United States.

“One of the interesting use cases we discovered was that our users would subscribe to a foreign city before visiting it,” said Wong. “This way they can start snapping up amazing deals for dining and activities for their vacation. We are in the process of expanding to some Asian cities, such as Hong Kong, Shanghai and Taipei.”

Similar to the competitive group-buying landscape, group-buying aggregators face steep competition from companies who are backed by big money. DailyD, for example, aggregates deals from 53 cities and the company recently raised $5 million in funding.

Deal Page’s Wes Bos says he plans to grow and compete online by focusing on the user-interface and keeping things simple. What the competition is doing, he says, is secondary.

“I am really happy with our layout and user interface, which I’ve heard lots of good feedback about,” Bos said. “When I built the site I had no idea anyone else had one of these sites so I wasn’t influenced by any of them ? I just made a site I would like to see while having my coffee every morning. The sites features are ever evolving based on visitor feedback, so I try and focus less on what competitors are doing and more on what works and makes people happy.”

Bos, who is finishing up his Bachelor of Commerce in Business Technology management at Ryerson University, also maintains a competitive advantage by fostering relationships with owners of group-buying sites in order to make sure he has their sites on Deal Page when they launch.

“We are currently working on some ideas to pull in additional money from sites that want to promote themselves on DealPage,” he said. “It’s a really easy site to convert because people come to the site looking to click.”

- Cross-posted to Digital Journal and Future of Media.

Facebook launches Groupon competitor with ‘Deals’ platform

November 3rd, 2010

Facebook CEO Mark Zuckerberg during a press conference from Facebook headquarters

At a press conference at its head office today, Facebook announced a new Deals platform that allows local merchants to target and offer deals to Facebook users. The new platform could prove to be big competition for social-buying giant Groupon.

The Deals platform is built around Facebook’s Places feature. It allows users to find specials around them, and it allows merchants to offer specials to drive more business, without paying Facebook a dime.

The Deals platform allows users to launch Facebook on their mobile and search for deals available around them, see what deals their friends have purchased, and see what deals are being offered by businesses they “like.”

Deals can range from everything to discounts at restaurants, to clothing stores, to coffee shops and more. Once a user finds a deal they want, they can go into the store and claim the discount.

Facebook says its Deals product is designed to solve an age-old problem of getting local businesses online. The company says local businesses have been told for years they should be online, but local business owners don’t always see the value. Facebook says its platform provides a reason to be online, as it allows merchants to turn fans and visitors into “real people, real dollars and real experiences.”

On the merchant side, Facebook says the deal set-up process is simple: Merchants visit a single page where they can specify two lines of text to describe a deal, when it expires and how many deals are offered.

Four types of deals are available: Individual deals, loyalty deals, friend deals and charity deals. Individual deals target an individual user; loyalty deals offer incentive to get users to come back often (for example, offering a free coffee if the user buys two at previous visits); friend deals to offer incentive to get users to bring in large groups (for example, offering a group of four people a discount at a restaurant); and charity deals.

Self-serve deals are coming to all companies on Facebook in the near future. For today’s launch announcement, Facebook is partnersing with The Gap, which will give away 10,000 pairs of bluejeans to people who check-in at a Gap store.

Facebook’s Deals feature is available in the United States and will be rolled out in other regions later.

By adding a social business layer to its Places product, Facebook is likely to attract businesses who currently use social buying tools such as Groupon. The big difference, however, is that deals from Facebook could be more inexpensive for retailers.

“To be clear, we don’t get paid for the deals,” said Facebook CEO, Mark Zuckerberg, at the press conference. “They’re user value and value to the businesses. If a business wants, they can also advertise on the ad system we’ve had for years. For now, the whole premise is this is something great for people who are using this system. Check in, tag three of your friends and everyone gets a free ice-cream. That’s good. That hasn’t been done before.”

Facebook offering deals without taking a cut of the margins could put a huge dent in sales from competing deal-maker Groupon.

Groupon is currently the leading deal-of-the-day site that offers group discounts on everything from spa services to restaurant deals to discounts at major retailers. Deals are offered to members by email and through social media.

Groupon, a two-year-old startup out of Chicago, is the fastest-growing company in Web history, generating more than $500 million in revenue this year, according to Forbes. Valued at $1.35 billion, Groupon has seen competitors and copy-cat sites crop up in markets all over the world in an effort to cash-in on the group-buying craze.

Unlike Facebook’s new Deals feature, however, Groupon takes a cut of all revenue generated from daily deals. So if a user buys a coupon for something via Groupon, the retailer gets a percentage and Groupon takes a percentage.

With Facebook’s Deals feature, the retailer could offer the same service without having to lose any of its margin to a partner. The merchant could also benefit by being visible to a user’s entire friend feed on Facebook, and by being able to target people who are physically close to them.

A Facebook blog post lists other potential Deals coming to the U.S. in the near future.

[Cross-posted to Future of Media & Digital Journal]

Liveblog: Facebook, AOL and Rogers debate marketing in modern age

November 2nd, 2010

Digital Day Conference 2010
Toronto – How should marketers adapt to new technologies and demographics online? How should they view content creation? This liveblog follows a panel discussion between Facebook, AOL and Rogers as part of Digital Day in Toronto.

The 13th Annual Digital Day Conference is presented by the Canadian Marketing Association and Marketing Magazine, and DigitalJournal.com is there covering it live.

This panel discussion takes place between Alfredo Tan, Senior Director of Sales, Facebook Canada; Graham Moysey, General Manager, AOL Canada; and Claude Galipeau, Executive Vice-President, Digital, Rogers.

The discussion aims to explores and debate content creation, content distribution, and audience engagement as they relate to how marketers and agencies should be thinking about the marketing mix.

Moderated by Veronica Holmes, President of Zenith Digital, the discussion is scheduled to take place between 10:35 – 11:35 Eastern.

I’m at Digital Day and covering the panel talk in a liveblog below:

[Cross-posted to Digital Journal and Future of Media]

USA Today undergoing major restructuring with 130 layoffs, news tailored to mobile

August 27th, 2010

In a press release issued late Thursday, USA Today announced it would be undertaking a major organizational restructuring effective today.

USA Today publisher Dave Hunke told the AP the publication would lay off 130 people, or about 9 percent of its total workforce of 1,500 employees. The changes represent the biggest organizational shift in USA Today‘s 28-year history, as the Gannett flagship moves away from print and toward mobile.

“This significant restructuring reflects USA Today‘s evolution from a newspaper company to a multi-platform media company,” Hunke said in the news release. “When USA Today first launched in 1982, we led the news and information industry in aligning our content with readers and advertisers. I’m confident these key executive appointments in new and current departments will continue our legacy as a vital, valuable media brand across print, digital and mobile platforms.”

USA Today‘s print edition is still the big bread-winner for the organization, but the changes represent a focus on emerging platforms such as smart phones and tablets. These tech-friendly platforms present a new way to sell subscriptions and advertising.

Furthermore, USA Today‘s advertising revenue has dropped by nearly 50 percent since 2006 (the publication sold 580 ad pages in the most recent quarter ending in June compared to 1,098 during the same period four years ago). USA Today‘s circulation has also dropped from 2.3 million subscribers in 2007 to 1.83 million for the six months ending in March.

To address falling revenue, a decline in subscriptions and opportunities on new platforms, USA Today has announced new appointments in circulation, finance and news and five new departments have been established. As PaidContent explains, USA Today is moving toward content hubs instead of four traditional departments (news, money, life and sports).

The changes were announced internally Thursday and are being implemented today. The management and executive changes include:

  • Rudd Davis will be VP of Business Development, overseeing new business opportunities and partnerships including brand licensing, content syndication, acquisitions and joint ventures. Davis will also assume oversight of USA Today‘s retail, hotel and education-based partnerships. Davis was previously President and Founder of BNQT.
  • Jeff Dionise is now VP of Product Development and Design. Dionise will oversee research and development of USA Today products across all of the brand’s networks. Dionise was previously Director of Design for usatoday.com.
  • Heather Frank will become VP of Vertical Development. Frank will be in charge of creating, implemented and managing new and existing content verticals.  overseeing the department dedicated to the creation and implementation of new as well as existing vertical content areas. Frank was previously General Manager of USA Today‘s “Your Life” health and lifestyle vertical, which launches in September.
  • Steve Kurtz is now VP of Digital Development. Kurtz will focus on developing and maintaining technology and systems to support the publication’s website, mobile, iPhone and iPad platforms. Kurtz will also oversee the development as well as acquisition of digital and emerging platform space. Kurtz was previously Director of Digital Information Technology for usatoday.com.

USA Today will get rid of the separate managing editors who oversee the publication’s News, Sports, Money and Life sections and divide the newsroom into 13 “content rings.”

The content rings will consist of Your Life, Travel, Breaking News,  Investigative, National, Washington/Economy, World, Environment/Science, Aviation, Personal Finance, Autos, Entertainment and Tech. The Sports division will be a separate business headed by Ross Schaufelberger who has been named VP and General Manager of the new USA Today Sports.

USA today also appointed a number of new executives. Check out the press release for full details.

Demand Media planning to go public, SEC filing sheds light on revenue

August 6th, 2010

The massive content hub that has become the talk of the online world is planning to go public. Today, Demand Media filed an S-1 with the U.S. Securities and Exchange Commission (SEC) which is the first step to an IPO.

As All Things D notes, it doesn’t include info on the value Demand Media thinks it can get when it goes public, but it’s the first time the outside world has seen numbers within this private company.

According to financial disclosures, Demand Media is making lots of money, but it’s not yet profitable.

For the year ended December 31, 2009 and the six months ended June 30, 2010, Demand Media reported revenue of $198 million and $114 million, respectively. For these same periods, the company reported net losses of $22 million and $6 million, respectively.

According to the SEC filing, Demand Media generates a substantial portion of its revenue from selling ads and through domain name registrations. There are more than 10,000 Demand media contributors now and content they create is syndicated to Demand Media sites such as eHow, Trails.com, Cracked, and Livestrong.com.

And as Danny Sullivan pointed out, revenue generated from search engines are a big part of its business; 26 percent of Demand Media’s income this year came from Google, up from 18 percent a year ago.

The SEC filing points to specific agreements with Google that expire in 2011 and 2012:

We use Google for cost-per-click advertising and search results on our owned and operated websites and on our network of customer websites, and receive a portion of the revenue generated by advertisements provided by Google on those websites. Our Google cost-per-click agreement for our developed websites, such as eHow, expires in the second quarter of 2012 and our Google cost-per-click agreement for our undeveloped websites expires in the first quarter of 2011. In addition, we also engage Google’s DoubleClick ad-serving platform to deliver advertisements to our developed websites and have another revenue-sharing agreement with respect to revenue generated by our content posted on Google’s Youtube.com, both of which are currently on year to year terms that expire in the fourth quarter of 2010.

Demand Media also notes potential areas where change can bring about a big hit to its bottom line, noting:

Our failure to successfully manage our SEO strategy could result in a substantial decrease in traffic to our owned and operated websites and to our customer websites through which we distribute our content, which would result in substantial decreases in conversion rates and repeat business, as well as increased costs if we were to replace free traffic with paid traffic. Any or all of these results would adversely affect our business, revenue, financial condition and results of operations.

If you want to see Demand Media CEO Richard Rosenblatt describe his business himself, here is a sit-down with Kara Swisher at the D8 conference: