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Why Coupon Deals Aren’t Dead


Why Deals Aren’t Dead–And Why Facebook Will Be Back

By E.B. Boyd

Facebook [1]’s shuttering of its Deals business at the end of August led to a lot of chattering about whether the deals business, as a whole, was doomed. If Facebook couldn’t make a go of it, how could anyone else?

It didn’t help that, just a few days later, Yelp announced it was cutting in half the number of its sales people focused on its own deals product.

But new data from Yipit [2] shows that the deals business is actually growing at a healthy clip. Revenues from the North American market–as well as numbers of deals offered–grew nine percent from July to August. Groupon [3]‘s own revenue grew 13 percent, to $121 million. Annualized, that makes it a whopping $1.5 billion company.

And a series on conversations with experts in this space uncovered the more important lesson from Facebook’s about-face. Conventional wisdom has held that there are low barriers to entry to this business. But as it turns out, there are in fact many pieces to the puzzle of running a successful deals enterprise, and the key ones aren’t so easy to put together. That’s giving some companies–including Groupon, LivingSocial, and even Amazon [4]–a competitive advantage.

Here’s what we learned:

It’s not about the technology

Sure, the deals business emerged because of technology. It couldn’t have happened without the Internet and social commerce. But while technology was necessary for this space to emerge, it’s not the defining piece of the puzzle–especially since the technology portion has largely become commoditized. “I can buy a clone script for $200 from overseas and have my own deals site up and running by the end of the day,” Kris Petersen, founder and CEO of DealsGoRound, a site that lets you resell deals you can’t use [5], tells Fast Company.

So while Facebook might have been seen to have an advantage in this space because it’s the 800-pound gorilla in Silicon Valley these days, technical chops aren’t actually sufficient to guarantee success.

It is about the people

Success in the deals business means getting good deals–deals that are interesting to consumers and useful for merchants. And that means hitting the pavement. Deals might be a flashy new Web 2.0 industry, but it relies largely on a human sales staff knocking on doors, just as much as any old-school publishing business ever did, like alt weeklies or the Yellow Pages.

And it’s not just about charming merchants with a smile and a persuasive tongue. The best deals companies will be the ones that invest in serious analytics to figure out what kinds of deals work best for which kind of merchants. It’s not a one-size-fits-all, just-give-’em-all-50%-off kind of business. The kinds of deals that work best for salons are going to be different than the ones that work for hot air balloon operators. Which makes the sales staff all the more important: They need to sit down with merchants and walk them through how to structure their deals to get the best results.

Groupon gets that. It has a huge number of boots on the ground. According to its revised S-1 filing [6], 50% of the company’s 9,625 employees as of June 30, or approximately 4,800, were on the sales team. (For comparison, only 380 people were on the technology team.) LivingSocial’s staff numbers aren’t public, but it also has said in the past that it is hiring sales people by the boatload [7].

Even Yelp’s shift reflects that understanding. While it might look like Yelp retrenched, because it reduced the number of people working on deals, James Moran, cofounder and COO of Yipit, sees it differently. He tells Fast Company that the thing to pay attention to is the fact that Yelp took a team of 30 salespeople focused on both deals and local ads and assigned 15 people to focus on deals alone–as a way of ensuring that the deals Yelp gets are high-quality ones.

All of which means that, unless Facebook was willing to build a Groupon-sized deals sales team (which it probably was not), deals on the social network were not a sure thing (a miscalculation we, like others, made earlier this year [8]).

Size matters

Much was made of the irregular accounting metric Groupon included in its initial S-1 filing: ACSOI, or “adjusted consolidated segment operating income.” The metric was attacked for leaving out marketing costs. Groupon, for its part, argued that those were initial outlays in acquiring customers–and would not be ongoing costs (and so should not be used to evaluate the company’s prospects).

As it turns out, those initial outlays are now indeed generating returns. In July, Groupon launched a new travel vertical, Groupon Getaways, in partnership with Expedia. In August, the vertical’s first full month of operation, Groupon Getaways made almost $10 million, according to Yipit. Ten million dollars. In its first full month of operation. Instant revenues of that size, says Moran, were only possible because of the massive subscriber base the company had previously built up.

“They didn’t have to run a campaign to grow subscribers,” Moran says. If you were a new company getting into the travel deals space, “you would have difficulty” pulling off a 0-to-60 of that size.

Google and Amazon also have competitive advantages

Big sales staffs and bulging subscriber lists aren’t the only keys to this business. Google and Amazon also have competitive advantages, Moran says.

Google’s big advantage is its insight into your “purchase intent.” It knows what you might be in the market for based on what you search for. Google has long used that insight to power its AdWords business and serve up highly relevant ads. Now Google Offers can leverage that same capability to serve up highly relevant deals.

And relevance is going to become increasingly important. There’s a lot of talk of “deal fatigue” among consumers in this space. But consumers aren’t exhausted by saving money. They’re exhausted from having to sift through too many offers they have no interest in. Companies that can fine-tune the decision matrix that determines which deals you see versus which ones I see will have an advantage over the ones that just dump a ream of offers in your inbox, like so much junk mail.

As for Amazon, people are used to buying stuff from it, so it doesn’t have to overcome the trust hurdle that a newcomer does. Add to that the fact that Amazon already has everyone and their grandmother’s credit cards on file and the fact that it’s an expert in making buying things drop-dead simple. Both of those will enable it to reduce friction at checkout time and thereby increase the number of consumers who go through with a deal.

So it’s probably no surprise that, even though Amazon is new to this space (its AmazonLocal product only launched this summer), it’s showing promising signs. Active in only three markets for the full month of August, the business made $1.4 million that month, making it one of the top performing sites on a market-by-market basis, according to Yipit.

Eventually Facebook will come back

Even Facebook has a natural competitive advantage in the deals space: The social graph. Facebook has already shown the power of friends’ word-of-mouth when it comes to advertising [9]. So it’s natural to assume that friends’ recommendations will have the same influence in getting Facebook users to snap up deals.

The problem though, explains Moran, is that, right now, there isn’t yet the necessary critical mass in usage of deals for Facebook to take advantage of the power of the social graph.

“The average subscriber to Groupon only buys two deals a year,” Moran says. “You probably have a few hundred friends on Facebook. A portion of those are in [the city where you live]. A portion of those are buying deals. So you’re probably only infrequently seeing a friend buying a deal.”

“But it can be a powerful thing,” he continues. “That will happen when [at least] 50 percent of your friends buy deals [in general] and at least some of those people are buying deals every day.”

All of which means Facebook might have taken its Deals program off the shelf. But it hasn’t necessarily tossed it into the trash. (Facebook wouldn’t comment.)

The upshot

All of which is to say, there’s one major lesson to take away from Facebook’s (potentially temporary) exit from this space. Says Petersen: “Deals is not just something you can put in your sidebar and expect to have returns like Groupon or LivingSocial.”

“It’s too soon to conclude that we can all go home,” Moran says. Deals are “going to be transformative to how we buy and sell things locally.”

E.B. Boyd is FastCompany.com’s Silicon Valley reporter. Twitter [11] | Google+ [12] | Email [13]

[1] http://www.fastcompany.com/most-innovative-companies/2011/profile/facebook.php
[2] http://blog.yipit.com/2011/09/12/groupon-and-industry-resume-growth-post-record-revenue-in-august/
[3] http://www.fastcompany.com/most-innovative-companies/2011/profile/groupon.php
[4] http://www.fastcompany.com/most-innovative-companies/2011/profile/groupon.php
[5] http://www.fastcompany.com/1738958/the-dealsgoround-app-helps-you-profit-from-groupon-remorse
[6] http://www.sec.gov/Archives/edgar/data/1490281/000104746911007178/a2204399zs-1a.htm#dm79801_selected_consolidated_financial_and_other_data
[7] http://sales-jobs.fins.com/Articles/SB130090099092197185/Salespeople-Fuel-Growth-at-Groupon-Living-Social
[8] http://www.fastcompany.com/1749849/why-facebook-deals-marks-a-turning-point-for-the-deals-business
[9] http://www.fastcompany.com/1767275/facebooks-sponsored-performing-twice-as-well-as-standard-ads
[10] http://www.flickr.com/photos/thespis377/3930246596/
[11] http://twitter.com/ebboyd
[12] https://plus.google.com/106082235483426226462/posts?rel=author
[13] mailto:ebboyd@fastcompany.com
[14] http://www.williamkeever.com
[15] http://www.golocomedia.com
[14] http://www.entrepreneurgroup.com



August 8th, 2011, Nashville, TN, Main Street Media announces the launch of a joint venture between GoLoco Media Group, under the Coupon Mint brand name, and Main Street Media, LLC.

Main Street Media CEO Sam Hatcher describes the joint venture as follows, “Community newspaper readership is up over 17% across the country. Our readers are loyal and seek local community based information. Coupon Mint delivers just that. We see a tremendous opportunity to capitalize on the coupon advertising strategies, relationships, and sales culture of Coupon Mint’s 20 year history.”

In addition GoLoco Media’s digital advertising expertise in web strategy, social media, email delivery and list-building provide a large variety of additional solutions to loyal advertisers and those who didn’t see local papers as a viable option.

William Keever of GoLoco Media Group, Inc, praised the joint venture, stating, “GoLoco’s digital solutions add value to the Main Street Media newspaper advertiser. We are extremely excited to move forward with the implementation of both print and digital products for Main Street Media’s publications and relationships.” The initial launch phase will take place in Wilson, Sumner, and Williamson Counties.

The launch of The Wilson Post’s branded email coupon program, “My Click, Print, and Save”, www.myclickprintandsave.com, will take place with the printed Coupon Mint newspaper inserts on September 17th, 2011.

GoLoco Media Group sponsors Social Media Seminars for Coupon Mint


(1888PressRelease) July 21, 2011 – GoLoco Media Group’s CEO, William Keever, stated today, “Over the last three months GoLoco Media Group has provided expertise, scheduling assistance, and weekly seminar support to Coupon Mint Magazine advertisers and other business owners in the Middle Tennessee market. Seminars up to this point have covered topics such as Facebook for Business, Twitter, Google Places, Social Check-ins, Google +, and a host of other advanced topics relative to SEO, SEM, and social media.”

Coupon Mint Magazine has a Middle Tennessee footprint covering Murfreesboro, Lebanon, Clarksville, the Nashville market, and Southern Kentucky. Coupon Mint provides a coupon filled digest sized publication to approximately 400,000 residents in the Mid State market.

In April of 2011, GoLoco Media Group acquired Coupon Mint Magazine. This acquisition provided Coupon Mint the opportunity to integrate digital products into its highly successful print publication media offerings.

The seminar’s featured trainer through its first four months is Sherman Mohr, CMO of GoLoco Media Group. Sherman Mohr, the seminar’s featured trainer, brings 6 years of online and social media marketing to the series. His background includes administration of large Facebook pages, growing groups on Meetup.com’s network of 20,000 meetups into the top 1000 and conducting dozens of seminars around social media topics. Sherman’s Entrepreneur Meetup on the Meetup.com network has partnered with globally known speakers in the technology and social media space and has provided over 120 sessions to Middle Tennessee’s business community.

Mark Schwartz, President of Coupon Mint, described the series this way, “GoLoco Media continues to bring incredible value to our advertisers with this seminar series. All of our advertisers know of the value of a digital strategy complimenting their print campaigns. We’re now able to provide valuable expertise for the Middle Tennessee business community through our weekly seminars.”

GoLoco Media Group integrates digital marketing tools into 400 Middle Tennessee, Southern Kentucky advertising campaigns with launch of “Click, Print, and Save”



Nashville, TN May 2nd, 2011

William M. Keever, CEO of GoLoco Media Group, Inc. announced today the launch of Click, Print, and Save Email Marketing Programs. “Nashville based, GoLoco Media Group, Inc. has a 12 year track record in acquiring email and mobile audience in a highly profiled internet based program under various web site domain names.” Keever goes on to describe the company, “GoLoco has tremendous experience in building proprietary platforms designed to deliver ultimate control to the consumer. The consumer centric focus allows GoLoco to promote the aggregated audience to advertisers who in turn have access to consumers who have total control over which advertisers and genres from which they receive mobile and email advertising.

Chief Marketing Officer, Sherman Mohr, announced that the first large scale implementation of the program is taking place with advertisers who are in contract with Coupon Mint. Coupon Mint is the largest direct mail coupon publication in middle Tennessee.  The Coupon Mint Magazine is a digest size coupon publication featuring local business coupons such as restaurants, retail and personal services. Mohr states, “The Coupon Mint introduction of “Click, Print, and Save” is in keeping with where the advertising world is moving: That being digital, social, and mobile.”
Coupon Mint President, Mark Schwartz, praised the technology stating, “Our working together serves to distinguish our company from the competition by providing digital marketing tools, systems, and expertise to our database of over 1200 regional advertisers”

GoLoco Media Group grows digital marketing reach to over 400 Middle Tennessee, Southern Kentucky advertisers with purchase of Coupon Mint.



May 1st, 2011

Executives with GoLoco Media Group, Inc. announced today that it had acquired Coupon Mint, the largest direct mail coupon publication in middle Tennessee.

William M. Keever, CEO of GoLoco Media Group, Inc. announced today that Goloco had acquired Coupon Mint Magazine. “Nashville based Coupon Mint has a great reputation for providing free coupons for dining out, great services, and general merchandise in a way that is convenient and cost effective.” Coupon Mint President, Mark Schwartz praised the acquisition stating, “Our working together serves to distinguish our companies from the competition by providing digital marketing tools, systems, and expertise to its database of over 1200 regional advertisers.”

Coupon Mint started print publication and delivery of its digest size coupon magazine in 1998, and is    now the largest direct mail coupon publication in middle Tennessee. The magazine is distributed quarterly to 370,000 plus Mid-State recipients. Generally, 65% of the publication is representative of restaurant values with the remaining mix being personal services and general merchandise. Sherman Mohr, CMO of GoLoco Media Group stated, “The addition and integration of digital marketing tools such as email, SMS, banner ads, and social technologies serve to bring the average small business owner a level playing field with national competitors.”

GoLoco Media Group, Inc. is a 12 year old digital media firm with a history of building significant highly profiled email and mobile opt-in communities. GoLoco’s CEO, William M. Keever, described the purchase of Coupon Mint as the first of many traditional print publications identified as possible targets in an acquisition strategy aimed at significant audience and advertiser growth.

Sherman Mohr in conjunction with GoLoco Media launched Nashville Daily Coupons to the Middle TN market on February 5th, 2011.



Nashville, TN – February 6, 2011

Utilizing Facebook applications and an open wall, “anyone may post” philosophy, Sherman Mohr in conjunction with GoLoco Media launched Nashville Daily Coupons to the Middle TN market on February 5th, 2011. Nashville Daily Coupons will allow any business who has liked the page to post information and a link about their specials, offers, or discounts. In addition, consumers will have the ability and permission to post information concerning where they have found or purchased the best specials or received the greatest deals.

The Nashville MSA features over 1,000,000 Facebook profiles according to Facebook’s advertising engine. Nashville Daily Coupons will initially advertise for “Likes” and pursue mentions through all other forms of social media and technology. Nashville Daily Coupons will become a participating portal for the Nashville Fan Card, a prepaid Visa cash card hard wired to feature the advertisers who utilized the page at a very nominal cost.

According to Sherman Mohr, founder of the page, and Chief Marketing Officer of GoLoco Media, a national text and email digital marketing firm, the typical Facebook subscriber wants to share information, assist others, and get a great deal. The Nashville Daily Coupons page is designed to leave the consumer in complete control.

You may find the page on Facebook at http://www.facebook.com/?ref=home#!/pages/NashvilleDailyCoupons/152360711468245?v=wall

GoLoco Media Group, Inc. Creates One-of-a-Kind Agency Portal


IMMEDIATE RELEASE February 24th, 2011

Goloco Media Group, Inc. announced today that it had developed a one-of-a-kind advertising agency portal that provides businesses, agents and brokers the ability to prepare, implement, order, send, target and manage digital advertising and marketing campaigns over the web.   “The agency system is very robust and comprehensive, said Sherman Mohr, Goloco’s CMO, allowing ad agencies to implement mobile (SMS & MMS), desktop, email and internet advertising all from one dashboard, and launching each campaign immediately or on a schedule.”  “We are not aware of any other web based system that provides a  similar turnkey application for the advertising and marketing industry, said William Keever, the Company’s CEO.   The Company believes ad agencies and media brokers will all want to take advantage of the Goloco agency platform.    ”Our system eliminates the current complicated and time consuming process of ordering digital advertising.  The agent merely logs in, uploads the message and/or creative, selects the delivery channels and consumer target groups (geographic, demographic and behavioral), schedules when the campaign will run, and presses the order and confirm button.” said Keever.  “An agency can launch an ad campaign literally within minutes of receiving an ad order from their advertiser commented Joe Butler, the Goloco President and Founder.

GOLOCO Media has specialized in internet and mobile marketing for almost twelve years.  The Company’s core business was built on two primary features.  First, Goloco provides advertisers with multiple digital media channels through which to market and advertise their business.  These media channels include internet, email, desktop and mobile.  Second, unlike the majority of media companies, Goloco “brings the audience” to the advertiser.  In fact, Goloco pioneered the development of rewards based digital media related consumer networks for over a decade.    In addition to its own distribution assets, the Company also launched its agency portal and partner network allowing the Company to sell and resell advertising inventory (web, mobile, desktop & mobile) over all digital advertising channels.

The Company believes it is well positioned to accomplish several timely interrelated goals:  To provide businesses with state-of-the-art mobile advertising and marketing solutions, including mobile based text messaging and traditional email and web-browser advertising; To provide consumers with a rewards based (opt-in and verified) advertising solution allowing them full control over the what advertisements they receive on their mobile phones; To provide businesses with an ultra-targeted comprehensive local based advertising solution that includes all facets of internet and mobile advertising; To exploit additional internet and mobile applications that provide both businesses and consumers a flexible but robust platform to prepare, implement, send, receive, control, and select targeted marketing and advertisements; and, To consolidate by acquisition the small to mid-sized segments of the internet and mobile marketing industries, improving and enhancing our ability to meet the rapid growth expected in these industries.

Goloco Media Group, Inc. appoints Sherman Mohr as Chief Marketing Officer



Nashville, TN January 19, 2011

Goloco Media Group, Inc. announced today that it appointed Sherman Mohr as its new Chief Marketing Officer. Mr. Mohr is a seasoned marketing professional, having served in marketing related management positions for almost 25 years. Mr. Mohr will direct the Company’s sales and marketing plan, including the launch campaign of Goloco’s mobile advertising division.

Joe Butler, Founder and Chairman stated, “Sherman Mohr is a very skilled and experienced marketing executive that will bring a determined and aggressive approach to marketing the Company’s products and services. Mr. Mohr has been on the bleeding edge of internet and social media related marketing and will enable Goloco to expand its advertising reach to include all facets of digital media.”

Goloco Media is a leader in new digital media, including state-of-the-art mobile marketing and advertising platforms. For more information go to http://www.golocomedia.com, or call 615-264-4747.

Mobile based advertising is expected to be the fastest growing area of advertising in coming years.



Nashville, TN January 5, 2011

GoLoco Media Group, Inc.(www.golocomedia.com) (formerly MidTen Media), is a successful Eleven (11) year old internet and mobile marketing/advertising company. Our newest project, presently known in beta as Turbo Tycoon, is a proprietary rewards based mobile messaging platform developed to take advantage of the huge market developing around mobile phone advertising. This rapidly expanding market is being driven by three converging phenomenon: 1) Advent of Local Based Advertising; 2) Dramatic increased use of Smart Phones; and 3) New Opt-in Regulations for Mobile Advertising.

Mobile based advertising is expected to be the fastest growing area of advertising in the coming years. In fact, local based advertising (“LBA”) (also known as local targeted adds) is expected to be one of the key factors driving such extreme growth. Google’s recently released search engine projections stated that local based searches (and resulting local based advertising), while constituting one-third of all searches in 2010, is likely to grow to almost half of all searches over the next few years. Moreover, use of Smart Phones is expected to eclipse all other mobile phones next year, giving the majority of people the power to access more information (including marketing and advertising) than ever before.

The Mobile Marketing Association (“MMA) has just significantly revised its mobile based local advertising projections upwards, stating that they now expect dollars spent on LBA to increase dramatically from 40M in 2010 to over 3B 2011. Even more exciting are the newly published eMarketer case studies which have found that the most effective and successful business model for mobile based advertising is the opt-in rewards based mobile messaging platform.

Finally, the Telephone Consumer Protection Act (“TCPA”) has now been extended to apply to mobile messaging, the result of which is that text advertisements may only be sent to mobile users who have given “prior express consent.” The strict opt-in requirement ensures that the less respected opt-out competitors are for all practical purposes no longer in business, leaving a huge vacuum in the mobile based advertising industry. The additional regulation is creating a dramatic convergence of an expanding vacuum in a very high growth industry.
William Keever, Goloco’s CEO, stated that “We believe we are perfectly positioned as a rewards based opt-in mobile messaging platform to take full advantage of these growing trends. Our technology has enabled us to build a scalable messaging network that can grow as rapidly as the industry. Moreover, unlike most mobile based advertising models, we monetarily reward our members every time they receive an advertisement.” William Keever continued, “Our platform also includes a unique best-of-breed advertiser portal allowing our advertisers to order, automate and coordinate their internet and mobile messaging campaigns. Businesses can literally order, pay for, and send out text, email and internet advertisements without ever calling our office. We believe this automated system will attract both large and small businesses, brokers and advertising firms, empowering each to take advantage of our rapidly growing rewards based membership.”

Finally, the full featured beta version of www.turbotycoon.com platform; as well as the Advertising Portal are fully developed and deployed, having already proven itself to be a success. In the last few weeks alone its membership base has grown over thirty percent (30%). This can be attributable to the public’s acceptance of mobile based advertising, and specifically rewards based mobile messaging.