8coupons Relaunches Amid Daily Deal Slowdown
If you are a major aggregator of daily deals and the industry seems to be slowing down, what do you do next? That’s the question faced by 8coupons, one of the original aggregators. As founder Landy Ung tells us, “we used to get literally an email a day from a daily deal” site seeking a partnership. “Now it is one a week.”
It may have seemed safe for 8coupons, in fact, to continue building as it was. The self-funded site has been profitable for over a year, and has already set up partnerships with 450 daily deal companies and 50 local “non-daily deal companies, such as Goldstar and Restaurant.com. “Each one is unique,” says Ung. It also provides offers from 4,000 other sources.
The site has also avoided being boycotted by major sites such as Groupon and LivingSocial, which generally won’t work with aggregators. 8coupons makes the grade because it includes a variety of content beyond simply listing deals, including deal validation (“Is this deal for real?”) local shopper blogs and maps.
But six months ago, Ung says, the company had a nasty wakeup call when Google changed its algorithms. “We had been riding Google for the last couple of years, but we lost half of our traffic” (and much of its Google-based advertising revenues).
Ung decided the site had to go in some radically different directions, focusing on letting its 2.5 million unique visitors discover services and products. “Now we want to own the lifecycle” of how consumers use deals and offers, she says. “We are more of a service experience,” with a newsletter and other features,” adds Ung. “Even if the deals space collapses today, there is still a need for us.”
The emphasis on discovery has led to the ramping up in importance of such partners as Goldstar, the cultural events site, which is now its third-largest provider of leads after Groupon and LivingSocial.
One step it took was to partner with CityPockets, which tracks deals for consumers. Another step was to ditch the self-serve platform in favor of a deal with SignPost, the social media deal site that allows businesses to create their own coupons. SignPost had been a direct competitor, notes Ung. But “they’ve evolved into a B2B platform. They’ve phased out consumers at a time when we were phasing out B2B.”
8coupons is also de-emphasizing its efforts to aggregate shopping-related content. Instead, the company focuses on local “experiential” deals. “Getting local, shopping related content is extremely, extremely hard,” says Ung. We still have 50 bloggers we work with, but just a handful of them are truly committed. And those tend to have their own affiliate relationships,” which presents an inevitable conflict.
Ung notes that since the relaunch, 8coupons’ direct traffic has been growing 30 percent week over week. “The new 8coupons has gone beyond an aggregation and distribution platform,” says Ung. “It has pulled together the entire local deals ecosystem into a single hub, and is now the only hub for discovering, buying, organizing and even creating daily deals.”
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It will be interesting to see if there is sustainability in the deals space moving ahead. There are now hundreds of companies offering product, very often without distinction. It has been great to see a segment of search grow in such a depressed economy, and I hope that this represents a long term market opportunity.
Thanks Robert. The deals space definitely opens up many new doors, but we are closely watching whether “extension” projects like GrouponNow, Living Social Walk In Deals and others really leverage the customer and merchant base.