We’ve long known that coupons provide real traction for SMB advertising. Nothing beats a customer walking through the door with a coupon in hand. But a lot of SMB website publishers haven’t really focused on them.

DataSphere, on the other hand, has had a coupons product for some time. But it only recently has really zeroed in on their potential as “an adjacent space” to normal SMB activities, along with events, notes SVP Gary Cowan.

Coupons are actually easier to pull off than daily deals because “they don’t require the level of investment from partners,” he says. “They’re accessible to a wider set of companies. And they target advertising in a similar way.”

DataSphere, which is now in 85 markets with more than 300 sales reps, has taken an approach that more closely resembles “closed loop optimization,” adds Cowan. “We’re now helping businesses provide better content, and to make better offers. We tell them what the difference is between making an offer that is 10 percent off and 30 percent off.”

While coupons don’t drive the same volume as deal publishers such as Groupon, they lead to higher profitability because they feature smaller discounts, and have no commissions. They also typically run for longer time periods than deals.

DataSphere has also been focusing on exposing the coupons across a larger network of relevant sites, including Coupons.com. “There is no reason not to publish a coupon on several sites,” says Cowan. “It all goes to help the SMB advertiser in the end, and if they see more value, they’re more likely to stick around.”

With TV station partners such as Gannett and Fisher Communications, Cowan says the focus is on leveraging DataSphere’s increasing scale to “continuously evolve and add services with clear and demonstrable value for small local advertisers.”

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At BIA/Kelsey’s DSB ’10 conference, Fisher Communications CEO Colleen Brown emphasized that local broadcasters can utilize the “long tail” of content to create richer offerings and open new advertising channels. The Seattle-based media group already does this through clusters of hyperlocal community Web sites housed by its Seattle and Portland TV properties. 

Now, Fisher is unlocking a new multi-platform opportunity for its radio stations and other radio and TV stations by leveraging the syndicated TV show The Daily Buzz as Buzz Brands, which will provide vertical lifestyle content that can be plugged directly into Web sites to enrich their content base and introduce new sales opportunities. “It’s true convergence,” Randa Minkarah, Fisher’s senior VP of business development, told BIA/Kelsey.

Fisher will introduce GalTime, a repurposed version of the existing Web site, on its revamped KPLZ radio site in October. It expects to launch verticals focused on health, finance and other niches in the coming months.

Read the rest of this post.

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The deal initially covers ten of Gannett Broadcasting’s 19 markets, including Atlanta, Washington D.C., Tampa, Buffalo, Sacramento, Grand Rapids, Little Rock, Portland, ME and Macon, GA. Gannett is keeping the DataSphere arrangement separate from Ripple6, its social media marketing unit, which was recently merged with PointRoll, Gannett’s rich media services company.

Seattle-based DataSphere, which received $10.8 million in funding and is partially owned by Fisher Communications, now has deals with at least five media companies and powers more than 300 local news sites. Among its media partners are Fisher, Raycom Media, Local TV and Hubbard Broadcasting. More than 1,000 SMBs are served by the Fisher sites in Seattle, Portland and Boise. The service had also been tested out on a limited basis by Cowles.

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DataSphere CEO Satbir Khanuja, a former senior executive at Amazon, says “our timing is precisely right.” He notes that many advertisers had experience with Google text ads, but that the company’s focus on enhanced profile display ads makes more sense. It also brings in more money. “They’d been paying 50 cents to $1 for the text ad, but we can bring in 10 times more from the account,” he says (or $5).

In terms of getting to conversion, the company’s focus on specific neighborhoods rather than DMAs has been key to successfully selling the local accounts and leveraging content from the local media partner and from local bloggers, who benefit from aggregating their audience. “They want to see ‘my neighborhood.’ Things that are really in their community,” says Khanuja.

In New Castle (WA), for instance, the whole town was talking about Blockbuster and the imminent closing of its local store, he says. The company got that. “It is also important that they’re calling from [Fisher’s] KOMO-TV News” rather than from a no-name provider, he says. “Our conversion is extremely high.”

Key categories for DataSphere in Seattle and other markets that it serves include groceries, drug chains, dentists and lawyers. “The categories are controlled by the [local] sales agents,” says Khanuja. “It is all green field.”

DataSphere has also launched in markets served by other media partners, such Providence, R.I. It supports more than 130 hyperlocal neighborhoods in all, including 40 in the Monterey,CA/Salinas areas in partnership with Cowles California and its area TV stations.

Fisher has invested $1.5 million in the company, an amount that was part of a $10.8 million B round. Ignition Partners was another investor. Khanuja says the hefty amount will be used to develop the software platform and launch “thousands” of additional neighborhoods. Fisher recently owned and then divested Pegasus News, another hyperlocal platform.

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