By now, we all know that daily deal fever is sweeping
the globe faster than an alien virus in a bad
Shyamalan movie. According to research firm
BIA/Kelsey, the deal-a-day market is expected to
grow from $873 million last year to $1.24 billion in
That number will more than double by 2015 to
hit $3.9 billion.
As group buying continues to grow at a dizzying pace, it is
evolving into an essential marketing tool for media publishers
and merchants alike.
But, rather than partnering with giant sites like Groupon
or Living Social, smart publishers are launching their own
branded daily deal sites through white-label software programs.
And with two of the most important ingredients for
deal-site success already in place — an engaged audience and
established advertiser relationships — publishers just need
the technology required to get a group-buying program
launched and a new revenue stream running.
In contrast, big consumer deal sites have invested hundreds
of millions of dollars in building their subscriber base.
In Q1 alone, Groupon spent $180 million on online marketing
to acquire customers. And with no targeted content to
draw a focused audience, the group-buying Goliath and sites
like it are largely attracting transient bargain-hunters. In fact,
according to a study by Rice University, only a third of
Groupon customers spent beyond the deal value and just 20
percent said they returned to pay full-price. Ultimately, giant
deal sites simply don’t provide enough repeat business to
make these promotions sustainable in the long run.
On the flip side, local and niche media publishers offer
merchants a focused, high-affinity audience. Subscribers to
these smaller deal programs come first for the quality targeted
content that they crave, such as foodie news, beauty
tips or local culture. And, because of the site’s expertise in its
space, subscribers trust the publisher to feature deals on only
the best products and services.
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Deal Sites to Watch:
WhereYouShop: A deal site that differentiates itself by
providing not just access to daily deals via email, but through a
searchable database of deals. Users pre-define their shopping
areas (work, home and in-between) through a rather unique
user interface and when new deals are added to their area,
only then are those users notified via email. Currently available
only in Chicago and surrounding suburbs, new cities are
scheduled to be added in 2012.
Yipit: Track nearly 700 active deal providers in over 50 cities in
North America including Groupon, LivingSocial, BuyWithMe,
Tippr, Yelp and others and recommends the best of the daily
deals to users based on their preferences. Yipit also offers an
API for developers interested in building applications
on top of the Yipit platform.
These are the customers that merchants want to attract,
because these are the customers who come back and pay full
price. To put it in numbers, local and niche publishers offering
deals in context via a white-label model bring an average
return per email (RPE) of up to $1.00; Groupon’s RPE
sits at $0.20. Big sites may have millions of subscribers, but
it’s the targeted publishers whose audiences buy and, more
importantly, become repeat business.
And, just as local and niche publishers provide more
value to merchants, so do white-label programs offer a better
option for publishers. When executed well, these programs
reinforce brand loyalty of audiences, provide
additional options for advertisers, and open new revenue
streams for publishers.
BELO Corp., one of the nation’s largest pure-play, publicly
traded television companies, is a prime example. BELO
recognized the advantage it had in its dedicated fan base and
the operating sales team needed to power a deal program. By
partnering with a white-label daily deal solution, BELO was
able to quickly launch branded daily deals in select television
Within two weeks of its initial launch in San Antonio,
BELO’s Yollar.com was expanding at up to 3 markets per
week and was live in a total of 17 cities across the country
within 6 months.
Having partnered with a white-label program, BELO
had the flexibility to build offers that better fit the brand
and could be tied into the rich local content already
on its websites. The partnership also allowed BELO to
offload the staffing requirements of a full team of copywriters
and graphic designers, scheduling and production,
merchant accounts payable functions and live
customer service. Today, the white-label platform powering
Yollar deals continues to handle all the tedious
work of the deal program so BELO can keep doing what
it does best: creating great content.
With an established loyal audience, reputable merchant
ties and a more solid financial foundation, publishers
are seeing profits and brand loyalty skyrocket with the
integration of a daily deal component. Groupon may have
been the pioneer in the group-buying race, but publishers
are in a prime position to take the daily deal model to the
About the Author:
Martin Tobias is founder and CEO of TIPPR, a premier
provider of group-buying solutions and the flagship PoweredByTippr,
a white-label platform that enables publishers to
create successful group-buying services.