Posts Tagged ‘ Deals ’

Deal Site Shakeout – Should Local Media Throw in the Towel?

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:

1. Packaging

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.

Now What?

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.

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2011
10/03
CATEGORY
Revenue Creation
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Deal Sites Galore: 10 tips on how to compete in the deals space

Not a day goes by without yet another article on deal sites: new launches, billion dollar valuations, or how they are garnering local ad dollars. For a media business, it is hard to figure out if we should be excited about deal sites or scared to death. Clearly there are some tremendous opportunities — and risks — associated with the deals space.

Groupon and Living Social have changed our world in the coupon or deals space. The numbers speak for themselves. Still, a local media business has the opportunity to become a viable competitor to Groupon and Living Social in their respective communities. Several competing deal sites will be available in most ALL communities soon, and many will be legitimate competitors for local advertising dollars. In response, local media must take what has been learned in the deals space and build a stronger differentiated deals presence in the markets served.

Finding deals that will work is the hard part. Advertisers selling food, entertainment or personal services such as spa treatments work the best. Patio furniture, mattress stores, replacement window and lawyers do not work. You will also find that in many cases the advertisers offering deals don’t currently advertise in the traditional local media space.  They tend to be businesses using Google ad words deeming the local newspaper, radio and television too expensive.

10 Tips on how to compete with in the deals space

How will your business best compete in the deals space? Here are 10 considerations that should help guide the decision process:

10. Realize that Groupon and others will be calling on businesses in your markets.

9. Differentiation: The number one thing is to differentiate your offer to local advertisers by bundling your ad space along with access to the database of names you have built.  Push the fact they get branding as well as immediate sales versus just sales from the likes of Groupon. If you don’t have ad space to include then come up with something that delivers something the advertiser can’t get from the big guys.  Also Promote you are part of the community and you want to help them drive loyal customers and not just one time visits.

8. Know going in that you need a dedicated salesperson who owns deals, and in most cases the sales are done over the phone.

7. Remember that you will be calling on lots of small businesses that can participate without plunking down one dollar upfront – a huge selling point compared to advertising without exact knowledge of what they get in return.

6. You don’t have to do a deal every day.

5. You need a champion that knows what deals will or won’t work and can say NO to sales if something doesn’t make sense.

4. Deals and the dollars associated with them are dollars often taken out of the local media budget.

3. You must create in your face marketing to let advertisers know you are in the deals business.  The big guys spend lots of dollars promoting their deals and although your business cannot compete on dollars spent, you certainly can make sure your community knows about your business.

2. Innovate and determine how you can grow beyond daily or weekly deals and into instant deals.

1. Remember that this a social media business. You need the deals shared with friends and discussed in a viral nature.

Finally remember that people are always looking for deals and local businesses are finding that using daily deal sites really does work.  If you are a local media business or just an entrepreneur looking to start a business the deals space is lucrative if you can really drive customers to a local business.  It’s not about the deal for the advertisers.  It’s about building a new, loyal customer.

photo: dealiciousfinds.com

2011
08/03
CATEGORY
Revenue Creation
TAGS



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