Why are Facebook and Yelp shutting down their deal programs?

Posted Originally on Dailydealmedia.com by Jimmy Hendricks, Co-Founder and CEO, Deal Current

why yelp and facebook are shutting down their deal programFacebook did not make a full entrance into the industry. The reality was they were testing out aggregation, something that Yahoo, CitySearch, and what a dozen others are doing currently. Facebook was not sourcing their own deals. They were an affiliate partner of other companies like Zozi, Groupon, LivingSocial, and several others. Deal quality is what wins in this space. Facebook’s deals were not theirs, and the company was transparent with consumers that the deals they featured were not their own. As such they were not able to create a following. It would be as if you created your own Facebook page, but just had 10 other people comment and update your posts for you. Of course, it’s only a matter of time before people realize what’s happening and just ignore your posts altogether – or unsubscribe.

The other reason why it makes sense for Facebook to temporarily shut down their deal program is because of the old adage saying “local advertising is sold, not bought.” Groupon and media companies need an aggressive outbound sales teams calling or in market street sales team. This doesn’t fit Facebook’s model. They are a technology company, not a sales company. Facebook was planning for deals to be self-setup and the evolution of the market says this may not happen or it’s far off – there are many examples of this.

Yelp seems to have shut down their program for a different reason. Yelp realized that offering increasingly great deals is the only way to win in this game, not just more low quality deals. Also my guess is, one of their troubles is that their sales force is predominantly inside sales and merchants self-manage their ads (like Facebook, another example of a technology company trying to foray into the bloody red ocean where sales companies feed). Deal Current believes the key to success is having an outside sales team who meet in person with merchants.

The Bottom Line: This news is good for independent programs, media organizations with existing sales teams, and software providers because of the following reasons:

1) It shows that the companies that are going to win in this space are the ones with outside sales teams.

2) Not having Facebook and Yelp in the game is a positive thing. Deal sites still leverage social sharing in a big way and use Facebook’s superior ad targeting to drive sales. Now deal sites don’t have to worry about Facebook blocking 3rd party deal sites or being overly selective in approval.

Additional thoughts:  Here are some things that we remind our partners on every day:

1) Deal Quality is everything – run good deals, if you don’t have a good deal, don’t run a deal, wait until you have a good deal. This builds your brand.

2) Focus on Deal Match – make sure your deals match your audience. You should have a target customer in mind (age, gender, income, location, interests, etc.), match your deals to them. This builds loyalty.

3) Focus on creating great deals, and promote the heck out of them (not just your program). This creates excitement.

Overall having major players bow out doesn’t mean the market is dying. I believe it proves it’s not as easy as people think and therefore not for everyone, which also makes the strong case that deal sites should partner with a technology provider to build their program.

10 Ways to Help Plan and Promote a Contest to Drive Opt-Ins Into Your Deal Program.

With the launch of the New Self-Serve Artistic Hub product, we’ve been getting a lot of questions regarding how to create success with online contests.  Here is some great info to consider when planning for a great promotion.

Contests, like anything else, don’t promote themselves.  With the new Artistic Hub, your job is to design and advertise your contest.  It’s our job to make sure the promotion runs smoothly.  We provide tools to easily manage everything and help you easily communicate with participants.  Basically your job is to get the ball rolling with traffic then our software will do the rest.

Here are 10 Things to Consider When Planning for and Promoting Your Contest:

  1. Create an exciting design for your contest layout – you’ll work on top of one of our templates, but your actual contest theme should be your own.  You need a few hours of creative time for this, please let us know if you don’t have the resources available in house and we can see if we can fit it in at standard hourly rates at Deal Current.
  2. While designing the contest layout, your designer should also develop additional promotional creative – banner ads, email newsletters, images, etc.
  3. Open up ad inventory to support your contest and create a promotional schedule of when to run ads – this could include broadcast, print and more if you have the authority.
  4. Create an exciting and relevant prize – this doesn’t have to be big, but it should be relevant.  A baby photo contest could be for a $500 gift card to Toys-R-Us, but it could also be for something a lot smaller and have the same effect.  Zulily.com ran baby photo contests with us for several months and they would get 10,000 submissions and several million votes monthly with the prize being your child’s photo on the front page of our site (50px x 50px big).
  5. Understand that your traffic will increase.  In some cases we’ve helped radio websites double their site traffic in less than a month.  Be prepared for this, as every site as means of monetizing this traffic, or using it to promote other initiatives.
  6. Consider where the contest will live – traffic directed to a stand-a-lone contest page with no link-backs is a billboard in the desert – you’ll see very little value to your brand there.  When we create contests for Warner Bros Records the contest is promoted on the band’s home page and embedded next to the iTunes store or tour schedule to drive track or ticket sales.  The NFL teams embed the contest widget in their e-commerce storefront to drive merchandise sales for the teams.
  7. Marry the contest with your deals program – your deals program is a direct-to-consumer sales opportunity, put the contest on the deals site if possible.  Place ads on the site to create awareness.  Consider giving free deals as a part of the prize pack.  Relate your offers to the contest theme during the contest period.
  8. Remember our embeddable technologies can run in unlimited environments.  Consider other places your contest can live also.  If you can’t use an ad to drive traffic away from another property, drop in the actual contest and have it running there too.
  9. Use Facebook.  Promote entries on your fan page, consider creating your contest with the narrow facebook layout (Template #3, 520 x 1085px) to run the contest on your actual fan page in addition to your deal site or media site.  Here’s a basic example on Deal Current’s fan page.
  10. Consider what to do with the content you develop with the contest.  User Generated Content (UGC) is valuable to brands, and according to most standard skill-based contests (including the standard example t&c’s Artistic Hub provides you) you own the data and content captured.  Don’t just trash this when you’re done, use it!  Zulily captured 40,000 photos in 4 months with Artistic Hub and created a whole marketing initiative called “Zulily Cuties” around the content captured.
  11. I know I said 10, but one more:  REMEMBER TO HAVE FUN.  Contests are fun, participants can get crazy, and hopefully your site will see the benefits with traffic and new fans.

Understanding Artistic Hub & online contests:

Artistic Hub contests are skill-based contests, not enter-to-win or sweepstakes.  There are several advantages here.  Enter-to-win (or sweepstakes) contests provide a negative incentive for sharing – your chances of winning decrease the more people you tell.  With skill-based contests, a participant’s chances of winning improve the more people they tell, because those friends can vote for the entries to improve one’s chances of winning.  With Artistic Hub, you will get automatic social media exposure from participants, and it will drive traffic to your site.  Other benefits include repeat contestant/participant traffic – our client’s participants come back to vote and see their ranking on average 7.25 times per month.

Artistic Hub contests use a unique head-to-head voting model.  Head to head means when participants come to vote on a picture, 2 pictures are shown at random and the user picks the one they like best, then 2 more are shown, rinse and repeat, and repeat.  This is great for many reasons.  One, it creates relativity quickly and fairly across all content in the database.  Proprietary algorithms and rules keep everything fair, and prevent cheating.  The head to head component was built to make cognitive decision easier – working memory isn’t needed, so processing speed increases,  and attention increases.  In plain English, your friend points out something and asks you to rank it.  Unless you’ve played this exact game before, you need to spend time thinking about it, it next to the other objects you’ve seen like it, and rank it with a number relative to the others.  Rather, why not just show two similar objects and ask which you like best?  The result: our average users stay and vote on average 8 minutes and 9 seconds, and they vote on hundreds of images, creating overall ranking in the system.

More reading: See a blog post from one of our clients, Entercom Radio.

Wanted Groupon and Living Social Sales Reps

Posted Originally on Dailydealmedia.com by Jimmy Hendricks, Co-Founder and CEO, Deal Current

Every day we all read the same headlines:

  • Groupon is losing money
  • Living Social is catching up
  • Both launch X new markets
  • A small local deal company was acquired
  • How does the market affect Groupon’s IPO?
  • When is Living Social going to IPO?

We can all sit on the sidelines speculating, criticizing, and making assumptions.The reality though, is that these guys have deep pockets and they can’t be out-spent or out-marketed.

You can compete though, and here is how:


RECRUIT THEIR SALES TEAM AND PAY THEM WELL

Over the past year, Groupon and Living Social have both changed their outside sales reps compensation plans.They have moved a repeat sale in-house which means the sales reps who built the business are getting shortchanged. It’s the natural course of business for a company to change commission plans when they experience rapid growth, but this also creates turnover.

A 25 year old sales person shouldn’t make $30k a month signing up 10 restaurants to run a Groupon, which is why Groupon and Living Social are reworking their compensation plans.  If you can offer these sales reps a better opportunity and maybe some stock options, then your company has an opportunity.  It’s all about the dream of helping build a company and seeing it take off, and the early Groupon and Living Social sales reps made a killing. Use this to your advantage, just like a startup tech company does when getting started.

People will work for less when there is a vision and they have purpose. Now is your opportunity to recruit these sales people and bring them on to your team. The key is to pay them well and make them a part of your organization. A great sales person brings experience, training, and most importantly a rolodex. Have them teach you how to compete and if you are lucky, how to beat Groupon and Living Social in your local market.

In closing, here is the ad I would run on Craigslist:

WANTED: Groupon or Living Social Sales Reps

We are a local grown successful daily deal company and we want you to help us build our army to take down the big guys.

We are the David going after Goliath and here is what we can offer:

A better compensation plan

Leadership experience

A management title

Stock options in our company

Then include the normal “Responsibilities, About Us, Contact Info”

Short URL: http://www.dailydealmedia.com/?p=12362

What does the Google & DealMap Acquisition mean?

Today, one of the largest daily deal aggregators, The DealMap, announced that it’s been acquired by Google.  Although many people are beginning to speculate on what this partnership could actually mean for the industry, consumers and daily deal publishers – we at Deal Current have our own opinions.  The DealMap has been a syndication partner for Deal Current clients for about a year, and their innovation in the space and mobile development has been certainly one to admire and appreciate.  Most notably, The DealMap has developed a very sophisticated geo-targeted mapping function which syndicates daily deals throughout the US.  Their mobile app renders all local offers, deals and coupons right to your current GPS location.

Our belief is this expertise coupled with Google’s obvious Google Map and Google Places products could be a natural fit for the content easily gathered and distributed by The DealMap’s API.  I’ve even found myself asking why Google doesn’t aggregate all of this data into search and it appears from initial analysis that they might be doing that with this partnership.

This can certainly be a natural fit for the Google Offers product as well, and our hunch is that they’ll leverage the DealMap user data to spur the consistent growth and scalability of the local offer and deal space.  We’re excited for our friends at DealMap and Google for making this transaction a reality.  If anything it’s exciting to see this lightening space continue to amaze everyone involved.

Here’s what the folks at The DealMap have had to say thus far about the partnership.

From its announcement blog post:

“We believe Google provides the ideal platform to help us accelerate our growth and fulfill our mission. We’re passionate about helping people save money while having great local experiences, and in Google we’ve found the perfect partner that shares this passion, as well as our vision and strategy. We believe that joining Google will help us innovate in new and unexplored areas of commerce.

For the time being, we will continue to support The Dealmap’s core products and partner services. People will still be able to access local and daily deals through The Dealmap website, mobile apps, and daily email, and we’ll continue supporting The Dealmap API and feeds for existing sourcing and distribution partners. As we’re ready to share more about integration and transition plans, we’ll update our partners and consumers on progress and any news.”

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