ILM East keynoter Ted Leonsis, in a BIA/Kelsey pre-conference webinar, proclaimed a “new generation and reinvigoration of local products.” The new opportunity in local is “where social, video and mobile intersect,” Leonsis said.
What surprises Leonsis, who currently serves as Groupon’s vice chair and a board member of AmEx, is that VCs and entrepreneurs are correctly focused on local opportunities, but traditional local media don’t seem to believe in their core local products.
Newspapers and other local media are budgeting for covering the Olympics and the presidential election, “but there are so many ways to get national news,” noted Leonsis. Meanwhile, if you want information or news about where you actually live — say, Potomac, MD, where Leonsis lives — you need to go elsewhere.
In this climate, American Express, with 5 million or 6 million local touchpoints around the world, is a major conduit to the small-business community, noted Leonsis. And a company like Groupon has absolutely “hit it” out of the park. “They have very compelling local offers in real time.”
Groupon is a “much bigger idea” than a simple directory or city guide or newspaper, added Leonsis. “It creates marketplaces for socially astute audiences” — an effort that Leonsis dubs “curated commerce.” “It’s a good example of social commerce,” he said.
Groupon also has proved to be a great friend of SMBs. Four years ago, during the financial crisis, banks had stopped lending to SMBs, and here comes Groupon asking for no money down and providing cash for products that are redeemed over many months. “Groupon’s helped float a lot of SMBs,” noted Leonsis.
Leonsis sees Groupon solidifying its hold on the market, as other companies begin to contract. The deals marketplace “is easy to enter but really hard to scale and be successful,” he said. “It’s hard to open offices in 500+ markets, build a database and create demand.”
If you are not Groupon, Leonsis added that the way to go may be to focus on verticals. Companies didn’t take on Google in search. They went to vertical niches. “They’re verticalizing shopping experiences and connecting with marketplaces,” he noted.