Last month I was at the Affiliate Summit and it was reported that over 51% of affiliate sales are driven by online coupons. The majority of these are online promotion codes similar to what you find on RetailMeNot.com. Retail Me Not went public in July 2013 and shares soared 32% in the first day.
Looking at this year Ebates is also gearing up for an IPO making the coupon space the hottest market in 2014.
At Deal Current we are excited about the coupon space. Every day we attract more advertisers to the Deal Current Platform who want to run local coupons on a performance basis.
To learn more about the Coupons.com IPO read “Anatomy of an IPO” at the Huffington Post which was originally posted on www.atelieradvisors.com.
Here is an excerpt:
On January 31, 2014, 16-year-old dot-com darling Coupons.com filed for an IPO. To put this event in perspective, PayPal was founded in the same year. While PayPal filed for its $70 million IPO in 2002 and received an acquisition offer of $1.5 billion from eBay later that year, Coupons.com made the decision to remain private. In general, the average company takes six to seven years to reach IPO readiness. Sixteen years is rare.
Strike When the Iron Is Hot
When 4-year-old PayPal filed for an IPO, its trailing 12 months revenue was $138 million, while 16-year-old Coupons.com had trailing 12 months revenue of approximately $153 million at filing. One could argue that Coupons.com did not have strong enough revenue growth to warrant an IPO in 2002. I would tend to agree with this. If Coupons.com revenue growth of 50 percent, as evidenced in its S-1 filing, has been consistent, it’s fair to reason that they may have had less than $5 million in revenue in 2001.
We are excited to announce that we are just a couple weeks away from releasing a brand new management center for all of our clients and would like to invite you to one of our preview webinars.
Our new system has a great new design, is mobile responsive like our consumer websites, and has a bunch of improvements to make managing deals and coupons even easier. Even more important, this will give advertisers really easy to use tools for deal redemption and coupon tracking that you can be proud to show off (Screenshots Below).
If you would like to see all that Deal Current has to offer I encourage you to sign up for one of the calls below or share this with your team.
Register for an overview session now by clicking a date below:
Preview of New Navigation and Dashboard
Preview of Reporting Center
Preview of Merchant Voucher Redemption Page
Our President Patrick Dillon was recently quoted with other experts on the outlook of the daily deal market on News Net Check.Read the original full post here.
Almost two years after Groupon’s IPO and amid repeated dismissals of the space as dead, deals soldier on as a viable revenue source for local media companies.
BIA/Kelsey has projected the deals space will reach $5.5 billion in revenue by 2016, up substantially from the $1.8 billion generated in 2011. But industry experts warn that deal vendors, pure plays and media outlets included, need to mature beyond one-off, email-based arrangements to attract loyal customers of their own.
“What we’ve seen is the deals companies say, ‘I can’t keep on going to the endless amount of local businesses and trying to sell deals to a new one,’” says Peter Krasilovsky, VP at BIA/Kelsey. “‘I have to keep my merchant customer base.’”
Questions of whether deals drove loyal customers, sharp discounts and unfriendly revenue shares for merchants prompted many skeptics to warn of the deals space’s downfall after Groupon’s IPO, the largest of any Web company since Google.
Groupon, which has banked over $1 billion in investor funding, saw its share price drop almost 90% in about a year. The Chicago-based company has rebounded, recently reaching a 52-week stock high following a CEO change.
The space has also thinned since late 2010, when Amazon poured $175 million into LivingSocial and rumors circulated that Google would buy Groupon for nearly $6 billion. “At that point, the men were separated from the boys,” says Andrew Moss, founder of BuyWithMe, which had raised $36.8 million to compete as a third pureplay. Shopping website Gilt acquired BuyWithMe in the fall of 2011.
Today, Groupon and LivingSocial remain the two dominant pureplays to compete with local publishers, broadcasters and entrepreneurs. (Groupon also offers an affiliate network, available to media companies, where partners can place Groupon deals on their sites for a commission.)
“The deals space has leveled off,” says Patrick Dillon, president and co-founder of Deal Current, a white-label deals software company that works with The Buffalo News, Pittsburgh Post-Gazette and, in some markets, Clear Channel Communications Inc. “Now, it’s going to start growing again.”
One reason industry experts remain bullish on deals is its evolution since 2009. For a few years now, BIA/Kelsey has referred to the deals space as the “promotions marketplace,” Krasilovsky says; others prefer performance marketing or prepaid offers, given the stigma associated with “daily deals.”
Groupon has acquired Savored to bolster its restaurant reservations and SideTour to likely make a play in events hosting. Its e-commerce play, Groupon Goods, now represents 38% of the company’s total sales, according to AllThingsD. (A Groupon spokesperson could not be made available for comment.)
LivingSocial formed a Merchant Solutions division in late 2011 to assist merchant clients with other digital marketing initiatives. Like Groupon, the company has bet heavily on its mobile app full of always-on deals. “If [a merchant] came to us and said, ‘Hey, send me 50 customers a month,’ we really didn’t have that as an option,” CEO Tim O’Shaughnessy recently told The Washington Post. “Now, we do.”
At local media companies, most minus the personnel or financial resources of a Groupon or LivingSocial, similar pressures to evolve are on.
“I’m still bullish on deals for local media,” Krasilovsky says. “But it’s not the savior, as a standalone, that we might have thought it was a few years ago.”
Local media companies leverage their content, market reach and sales staff to curate offers for a local audience, usually partnering with a white-label technology company like Second Street that provides the platform. These deals often complement the media company’s other digital marketing services.
Shawn Wilcox, VP and director of sales at the ABC/NBC affiliate in Traverse City, Mich., stresses that his company is not a deals player, but rather a multimedia service provider. His sales reps are selling more than deals.
“Our sales team [consists of] truly digital-ready consultants as sellers,” Wilcox says. “Their job is to go out and speak to any individual client about what their marketing opportunities and needs are and then to custom tailor a solution. Sometimes that includes deals, sometimes it doesn’t.”
Deals, or prepaid offers, can be more than one-time arrangements, Krasilovsky says; pureplays have added inventory via always-on mobile deals or deals supermarkets. For local media companies, deals can be bundled with ads, website management and other digital marketing services as they move toward quasi-agency roles.
“When you do business with the local media company, in my case, you might get promotional commercials, you might get an interview in the morning news, in print,” Wilcox says. “You’re going to get something tangible out of it.”
Moss, whose BuyWithMe had early relationships with The Boston Globe, an ABC affiliate in San Diego and Entercom Communications Corp. in multiple markets, says local media companies should consider additional e-commerce plays. He points to Thrillist, a men’s lifestyle media company whose men’s shopping site JackThreads closed its millionth order about a year ago.
“[Publishers] have to decide whether they want to try to leverage their content and audience they have that likes their content to be transactional,” Moss says. “That’s the choice that they should be thinking about. It shouldn’t just be, ‘Let’s do that, but let’s be daily deals.’ They should think about the best way to be transactional.”
Second Street’s biggest line of business is its contests, a platform they license to more than 2,000 media partners, Coen says. A media company, for example, can run a weekly NFL picks contest on which they can sell a sponsorship to a sports bar.
“Email, contests, ballot and deals are really very interrelated from a promotions perspective,” Coen says. “What you really find is the key to success with deals is your email database. The way to grow your email database is to run promotions, which can be contests or even deals.”
The benefit: a diverse, interactive content mix to drive a loyal consumer audience — and a merchant who wants to reach said audience.
For local media companies, deals can be that way in the door, both with discount-hungry consumers — digital marketer Constant Contact reported last year that, over a period of six months, four out of five deal subscribers purchased a voucher — and SMBs in search of new customers and ad pay relative to the business it drives.
Wilcox says his ABC-NBC duopoly, which partners with Second Street in Nielsen’s 119th-largest DMA, has signed up over 75,000 to its email database and grosses annual revenue over $2 million. Wilcox says some local merchants, satisfied with the outcome of a deal, then purchase additional forms of advertising.
“When you do deals successfully, you have people calling you,” Wilcox says. “We have clients who do deals every month, every quarter, have signed up for annual campaigns [and] pour more dollars back into other TV and digital products.”
“People who says that deals are dead, mainly they’re saying that the broad, daily deals model as a replacement for other types of advertising,” Krasilovsky adds. “That hasn’t panned out. But deals are an important element in the overall mix. They’re still there and still making quite a bit of money.”
Founder Institute Mentors provide the support, feedback, and guidance that helped our early-stage founders launch over 800 businesses since the Institute was founded in 2009. When a founder is in need they come to the rescue… sort of like Startup Superheroes.
While all of our 2500+ Mentors help our companies, among these great individuals, there are some that stand out. Earlier this year, we announced the nominees for the 2012 Mentor Awards, which will take place at the 14th Founder Showcase event, on Wednesday, July 17th in Silicon Valley.
Today, we are excited to announce the winner of the “Highest Rated Overall”