While it almost feels trendy to cast some doubt on Groupon’s concept and business model nowadays, I keep thinking that daily deals are here to stay and will become omnipresent as it is a great channel ─ although still perfectable─for small businesses to advertise online.
Media companies seems to think the same as they have been rushing into the business for more than a year in the US, leveraging their two main assets, audience and brand authority, to create a solid revenue stream and a valuable additional service to their customers.
In Europe, the trend is growing at the moment, making it the perfect time to let you know more about these publishers from the old continent which decided to go for the daily deals war. Straight acquisitions, strategic partnerships with start-ups, or own projects, they all started to play, but more importantly, it is to know if they can represent the future of the industry.
They make an acquisition. They do it for the product, the community or the team; they let the team manage the business development and offer synergies to boost the audience and brand authority.
- Le Parisien Group, which is among the top French offline newspapers, acquired Clubdeal and now push their offers on their website and paper editions.
- Rossel Group, a major press groups in Belgium did the same and bough 64% of the daily deal start-up Groupolitan earlier this year, just after their launch in France. They leveraged their experience in the field by signing interesting revenue sharing partnerships with online publishers, such as the powerful French women-oriented network aufeminin.com (around 14M unique visitors per month).
- Archant Group ─ the UK’s largest independently-owned regional media business ─ bought Tickles in order to publish offers in their 58 weekly papers and more than 180 websites.
If you add that to Germany, where Axel Springer ─ one of the leading European publishers ─ spent $55M to buy nearly a 75% share of a mobile coupons service named Kaufda, one could easily understand to what extent media companies consider local advertizing as a strategic asset.
They sign strategic partnerships. Because it could be a relevant first step in order to assess the synergies and the potential win in the daily deals market. The best example is M6 ─ French third national television channel ─ which decided to do so last july signing a cross-media partnership with the $2M funded start-up Bon-privé; it resulted in a TV advertising campaign (see video), and an integration of Bon-privé deals in M6 network of websites (around 10M of unique visitors). If the terms of the transaction are not clear, the impact on sales is: they went up 236 per cent the week after the broadcasting.
They launch their own projects. It is clear that local publishers have a natural user base and authority, but most of them also have a team which is used to reaching small businesses to sell them ads. If they are able to leverage their sales force and shift to deals, why wouldn’t they be able to manage their own group buying websites ? Fact is, they are.
- In may, Prisa Group (the world’s leading Spanish and Portuguese-language media group, owner of El Pais) launched Planeo in Madrid and managed to rank among the top 5 spanish group buying in less than four months. They also launched in Portugal and are considering South America (Chile could be the gate of entry).
- In France, the leading local publisher Ouest-France Group ─ former owner of leboncoin.fr before the sale to Schibsted for $200M ─ decided to integrate their own daily deals within their cityguide Maville in four cities. Surprisingly though; no sign of daily deals on the other group websites (including http://www.ouest-france.fr/).
With an audience, strong brand trust, and generally with pre-existing bonds with local businesses, media companies are penetrating the group-buying industry in different ways, pointing out that it could be the new local advertising model that will help them monetise their natural base. But there is more to say:
1. The historic Groupon daily email conversion rate is dropping ─ showing the historic distribution channel is not the unique answer anymore;
2. Google is now announcing that they will feature their targeted offers across several of their different products (such as Adwords, Adsense, Google Places, etc.);
3. GroupCommerce ─ an exGoogler company making a daily deals platform for publishers ─ signed dozens of contrats and raised $18,5M after less than a year.
Is it a good enough reason to consider daily deals as the next ads generation?
If so, the war is just starting.
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