Daily deals are one of the hottest new areas for local advertising and promotions, with Groupon, Living Social and more than 150 other players rolling out their own versions. At least two companies, Click-N-Shout and Deal Current, are targeting local media companies as partners. Basically, they’ll provide the technical and logistical know-how, and the media companies would provide sales and marketing. Both companies launched dueling products in San Diego this month with The San Diego Union-Tribune’s Sign On San Diego and the upstart San Diego News Network.
Deal Current CEO Jimmy Hendricks says he’s carved the company from Artistic Hub, a 10-person firm that’s been providing support for various media properties for two-and-a-half years, including Time Warner Cable, the Oakland Raiders and Active.com, where he previously worked on its tennis vertical.
Deal Current launched in November, when it began developing Daily Deal with SDNN, which had used the company to build several photo contests involving the San Diego Chargers, pets, etc. But the company’s ambitions go beyond daily deals.
“Our goal is to build a suite of private-label solutions for media partners to engage their visitors and to increase revenue,” says Hendricks. Just this week, for instance, the company launched several online contests for Entercom, the radio station group. “Content software is too expensive” for media companies to build on a one-off basis, he notes.
Regarding the Daily Deal, Hendricks expects to be announcing a number of white-label deals with media partners. Hendricks compares his efforts to Click-N-Shout, which he calls a “redirect” that requires use of a Click-N-Shout URL and branding.
“Media partners can run their own program and embed our software on their site,” says Hendricks. Deal Current also provides full turn-key solution including sales training, promotional plans, customer support and operations.
Whether embedded or redirected, Hendricks believes the key to success for daily deals is going to be the quality deals. “It won’t work without good merchants and good advertisers,” he says. It is also important not to dilute the quality control so that only the most interesting and desired advertisers are featured.
Ultimately, Hendricks believes the daily deal market will shake out to top consumer brands such as Groupon and Living Social, and leading local media plays as well. “All the small guys with 5,000 e-mails are going to get pushed out,” he says.
Deal Current hopes to mine the best local media partners. Partnerships will be offered on an exclusive basis for the first six months or so, then complementary local media partners may be added as well (i.e., radio stations with newspapers).
In San Diego, for instance, the San Diego News Network is partnered with San Diego 6 TV and with San Diego Gay and Lesbian News, a niche site with 68,000 monthly users. Local sites like SDGLN may not have enough traffic on their own, but they’ll do well banded together, says Hendricks. Some deals may be structured so that media companies receive affiliate commissions from others in the market.