One of the biggest trends in 2010 was the new “deal of the day” site phenomenon. What began with the startup known as Groupon, rapidly grew into a full scale phenomenon. By the end of the year, dozen knock-off sites had materialized, and established local sites such as Yelp and Zagat, as well as discount sites such as Gilt City and RueLaLa, had rolled out their own Groupon competitors. Now Google has even announced it is rolling out a Groupon-model deal site. How will the entry of major online powers, such as Google, or the Amazon buyout of Living Social, affect the category moving forward, and how will it change hyper-local marketing?
Last week, LivingSocial made headlines when the site offered a $20 Amazon.com credit for $10. Because of the broad appeal of Amazon.com, by the end of the 24 hour sale period, LivingSocial had sold over 1.2 million vouchers. This was a significant increase over Groupon’s most historically popular deal with GAP from 2010. Since LivingSocial is owned by Amazon.com, this was a deal that benefited both brands even more than the usual voucher deal.
The rising success of these deals is beginning to raise questions about whether they are a valid hyperlocal advertising opportunity. Groupons routinely sell a thousand or more vouchers in a 24 hour period, and Groupon charges 50% of the Groupon sale price to the business running the offer, for a total 75% loss off the voucher face price. Small business owners are also reporting that the Groupon voucher holders are less interested in discovering a new local retailer, and more interested in taking advantage of a one-time deal. Since the local deal sites are only as strong as the brands they offer, national brands who can afford to take major initial losses may become more prominent on the most popular local deal sites. The true local advertisers may begin moving to smaller daily deal sites, where they will have less risk of loss

This raises three questions for 2011: will these “second tier” startups survive? And, if the major deal a day sites continue to take on more national brands and attract more short-term deal seeking customers, will these smaller sites gain more of the hyper-local deals from retailers looking to invest in new customers? And finally, what new deal-a-day opportunities will come up that could take both the national and the hyperlocal markets?

Digital Breaking News: Twitter Releases “@Earlybird” Advertiser Channel

July 7, 2010 – Twitter today announced the release of a new advertising channel: the Early Bird Twitter feed. This Twitter account is owned and operated exclusively by Twitter, and will be used to promote deals and discounts which are exclusive to Twitter users. As of 2pm PST on July 7th, 2010, the @earlybird account on Twitter had over 16,000 followers, with approximately a thousand more following every hour.

For Twitter, this gives the site a real means of advertising income, without having to deviate from their community culture. The plan for Twitter to begin offering sponsored tweets was first announced April 13th, 2010, at AdAge Digital, when the site founders, taking a cue from sponsored search, promised to only place sponsored tweets at the top of Twitter search result pages. However, the model was experimental, and still being tested to be sure the tweets “resonated” with the audience. Now, Twitter has a dedicated advertising feed, one where users are given incentive to join through deals and discounts. Since following @earlybird is entirely voluntary, Twitter is able to keep their users happy, and avoid any model which could be considered invasive advertising.

For advertisers, this now provides a new opportunity to introduce their brand to new customers. Deals and discounts are proven incentives for users to sign up to receive advertiser offers. In a recent eMarketer study, 37% of users who “Liked” a brand on Facebook, did so because they were incentivized with coupons or exclusive discounts. Deal based sites such as Groupon and LivingSocial also command huge mailing lists of subscribers who receive daily offers via email. The promise of financial incentives has proven very attractive for the online audience, inciting thousands of people to sign up to receive regular communications featuring a variety of advertiser offers. The @earlybird stream on Twitter is very likely to command a similarly extensive following of highly responsive users.

While Twitter has not been a significant part of Integrated Media Solutions campaigns to date, this new advertising opportunity may prove to be an option for clients in future. This will be a national advertising opportunity, with over 100,000 “followers”. Recommendations will be made based on pricing and campaign goals, in keeping with IMS’ practice of media portfolio management

More information on Early Bird from Twitter can be found at:

http://support.twitter.com/groups/31-twitter-basics/topics/111-features/articles/208505-what-is-earlybird

Jillian Tate
Director, Digital Strategy
jtate@imediasolutions.com
@jilliantate

I actually do quite a bit of work with co-registration campaigns. It works. This includes working with Q Interactive – better known to the world as Coolsavings.com. Usually, we can get leads from those vendors to convert to sales at a cost per that’s below our allowable. But when it comes to co-registration outside of that one, trusted vendor, we have to watch the stream of leads intently to ensure that our “host’n'post” vendors aren’t delivering us a steady stream of sludge.

The up side of co-registration is volume. It’s people opting in to an offer, to submit their name as a lead, at the same time they are choosing to take part in another offer or signup. Hence, the co-registration term. This is great when the offers are related in some way. With a little bit of appropriate targeting, co-registration works.

The down side to co-registration is also volume. The cost of a co-reg lead isn’t just the buck or two we pay for it. It’s also the cost of the call center that then has to follow up, or the direct mail piece that goes out to the leads who sign up. And even if you have a low-pay call center, they get very discouraged after hours of calling co-registration leads with zero interest in the product – who only signed up in order to get a sample, or take a Quizilla quiz, or get a new plant in their L’il Green Patch on Facebook.

Here’s what I don’t get about co-reg: 90% of the vendors we run it with seem more interested in making a few dollars off the sludge leads than they do in targeting. Why? If the game is changing, and sites like Facebook are leading that shift, shouldn’t these sites be working harder to send leads that won’t clog up call centers and waste client dollars? Are these vendors seriously managing to get repeat orders and grow their business based on sludge co-reg?

Here’s the steps I ask that vendors take before I send an insertion order:

1) NO PRE-CHECKED OR PRE-FILLED BOXES. I want people thinking about what they’re doing and what they are signing up for. And that goes doubly for the offer list. People should have to select those boxes – not sign up because they didn’t unselect one.

2) SOME sort of targeting. Whether it’s a vague offer association – offering info on demo-targeted products – or actual targeting based on demo/geo, something should be in place to narrow down the river of sludge. It may not actually increase the quality of the leads, or increase the lead to sale conversion by much, but at least it will narrow the field and slow the pacing so the call center can keep up and the budget is spread out over a longer period of time.

3) Qualifying questions, if they can be applied. Even if it’s a yes/no, at least that will cut down further on completely non-qualified leads

But what is the future of co-reg, if not everyone is holding their vendors accountable this way? It won’t work forever. That’s why I was so glad to be at Facebook Camp this last week. We’ll need new ways to get people to opt-in to receiving information from brands in the future. Co-reg has lost its efficiency and I think it’s failing to thrive and keep up in a new, more authentic, better regulated Internet.

Regardless, I did a little research, and found one great article that proved we were in the right. The violator was using the client’s brand to confuse consumers into buying a competing product. Clear trademark infringement. I just wasn’t sure how much bandwidth Twitter dedicated to these issues.

I was very pleasantly surprised. I received an auto-response confirming Twitter’s policies on infringement, which includes a crackdown on cyber-squatting. Then I got an email from Twitter’s support, within three hours, to confirm that they had disabled the violating account. Case closed.

I’m very impressed with Twitter’s support levels on this subject. I have several clients with well known brands that are leveraged by competitors – especially competitors with MLM marketing schemes. It’s hard to stamp out that kind of low-level violation, when it’s small time individuals. But Twitter has evidently brought in the support to keep on top of it. Maybe this is part of their long term business strategy to keep advertisers happy??