In one of my previous blog posts, I discussed the 10 tips to compete in the deals space. Now I’m talking about throwing in the towel. What gives? Ok, a bit of tongue in cheek to get your attention. Actually, I think now is the time to double your efforts in the deals space. Let me explain.
The deals industry is going through a shakeout but not because revenues are declining or even leveling off. Instead, the big deals sites are continuing to grow and consolidation is beginning. There are only so many deal sites a market can support and unless you have differentiated your product it’s tough to keep up against the big guys marketing spend. Take a look at the overall spend by consumers on deals, the revenue in 2010 is expected to be $873 million growing to $4.2 billion by 2015. Local media has to be a part of the dollars spent on deals or keep losing ground. These are dollars that would normally have been spent with newspapers, magazines, radio and local websites. It is the ultimate pay for performance type of advertising.
So, it’s the time to double down, otherwise you jeopardize the opportunity to be a big part of advertising dollars spent by local advertisers. Groupon and Living Social are off to great starts but if you look at local media sites in the deals space, in many cases they are doing well.
Three Strategies for Local Deal Sites
What is it that keeps these sites competitive? I believe there are three key strategies:
Local media can offer advertisers a much more robust advertising opportunity than just the deal itself. Local media can put together a package that includes the deal itself marketed via email, front page print advertising, website ads, on air mentions, advertorial and even editorial discussion. These are unique advertising and branding elements that the deals-only businesses cannot duplicate. Local advertisers receive branding value they might not otherwise be able to afford if it weren’t for the deal offering itself.
2. Local Sales
Local media employs local sales people. These sales people have relationships with advertisers in the market. They live and work in the market. The competition in many cases is calling into the market with telesales. Local media knows it is relationships that will drive sales. Advertisers want to deal with people they know and trust.
3. Brand Loyalty
Local media brands are already established in the market. Unlike competitors who need to spend hundreds of thousands of dollars on advertising their brands for awareness. Local media can spend their precious dollars growing their email and social databases instead of advertising for brand awareness.
It’s time to ignore the naysayers and take advantage of the strengths mentioned above. Add more deals. Segment deals into categories. Become more effective in geo targeting of deals. Hire more sales people. Grow your list. Utilize the assets you have and recognize competitors aren’t going away and they will innovate so pay attention. Deals represent a critical battle that local media needs to win or at least participate in at a high level.
Check out one of our deal sites here.