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It is an awkward time for a company to be holding an affiliate meeting right after it has been sold. This week, ShopLocal was put in this position for its long planned meeting with 120 retail partners in Chicago (where I was a speaker). The company has just been consolidated by Gannett, which bought off shares held by Tribune and McClatchy at a substantial discount. The company, valued at $85 million in 2006, is now valued at $52.5 million.

Last week, I speculated that Gannett’s discount was attributable to a number of factors, most importantly Tribune and McClatchy’s need for cash, and willingness to dispose of non-core assets. Gannett, on the other hand, sees clear value in bringing ShopLocal and its national retail accounts in-house, in part for the synergy they have with PointRoll, its fast growing rich media advertising service. ShopLocal’s SmartMedia product is being replaced by PointRoll’s PaperBoy service.

Company President Vikram Sharma has no comment on the politics of the acquisition. But he strongly asserts that ShopLocal is in a very healthy space. Naysayers about ShopLocal really don’t understand the $10 billion circular business, he says. Retailers still value print circulars, but they are getting new kinds of traction online, especially vis-a-vis ShopLocal’s focus on electronic circulars that can be inserted across a range of Web sites (among other features).

While national advertisers are consolidating in general, and cutting newspaper advertising, these trends haven’t adversely affected ShopLocal, says Sharma. He notes that the company works with almost every major retailer; hardly, if ever, loses any accounts; and keeps bringing them more and more products, including a new behavioral marketing relationship with Yahoo, searchable circular products on a local basis (again with Yahoo) and mobile services. These include weekly ad reminders, store locations, specific product offers and shopping lists. Two retailers have agreed to launch the mobile products.

Sharma notes that the company has 50 smart circular sites, which get 20 million visits per month and 250 million page views. And he asserts that the sites are effectively targeted. Fifty-three percent of visitors to the smart circulars are considered purchasers who buy the product they were researching within a week. Ninety-five percent buy their researched product within a month.

Some ShopLocal products are decidedly not newspaper-centric. They include the launch today of a cable TV video on demand “Smart Delivery” circular product with Comcast that enhances the “flat” circulars with motion, pictures and music. They are able to provide the services on a version and localized basis. Comcast will enhance capabilities with credit card data base matching.

Other service strengths include a robust opt-in e-mail marketing business, which has 600,000 subscribers (mostly middle demo women) during regular periods, and up to 1 million during holiday seasons.

On the panel on which I spoke, which was moderated by Greg Sterling, Robert Kennedy, director of marketing of, affirmed the importance of circulars to his business. So did Stacy Boone, media manager at Target.

Kennedy says Toys “R” Us is actually boosting his circular distribution to make up for the decline in print circulation. It is putting out a Wednesday sales edition, for instance, plus its normal weekend buy.

He appreciates the new capabilities of the digital circular products, which can be produced in dozens of localized and personalized ways. But “someone still needs to produce them”  — a good plug, probably, for ShopLocal’s automated solutions. Digital represents great opportunity for Toys “R” Us, but it remains a challenge to execute. “I’m still trying to get my store locator to work,” he jokes.

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