Groupon is apparently thinking hard about dismantling its ambitious SMB platform, and refocusing on its core strengths in prepaid deals, goods and travel. Reports have come out saying that Groupon is offering to sell its Breadcrumb POS platform, which had been rebranded as Gnome; and also sell its interest in Serviz, a Local On Demand Economy home services company that has been developed as ClubLocal by former ReachLocal CEO Zorik Gordon. Groupon has also been in talks to cash in on T-Mon, the South Korean e-commerce service that it bought last year from Living Social for $260 Million, but could now been seen as a cash cow that could allow Groupon to invest in other areas.

According to Bloomberg Business Week, Piper Jaffray analyst Gene Munster thinks that the Breadcrumb part of Gnome could fetch $100 million, and that Groupon’s stake in Serviz could be worth $30 million. T-Mon, which is seen as an e-commerce winner in Asia, could ultimately get as much as $800 million. Groupon’s apparent decision to explore the sale of Gnome is the most interesting to us. A report in Re-Code said that executives casually offered to sell at least a portion of it to Square.

In developing Gnome, which has been built on top of its June 2012 purchase of Breadcrumb, Groupon assessed its widespread, international merchant base and concluded it could reinforce and upsell that base and position itself as a global e-commerce giant. It would do so via a compelling package of highly discounted point of sales devices, payment services merchant analytics and strategically targeted offers to customers.

The investment in Serviz — which gave the greenlight to Gordon’s team to continue developing a service that was not going to go further at ReachLocal — was also seen as strategic as Groupon looked for more and more ways to connect and broaden the local marketplaces. Coincidentallly, it looks like Groupon is giving up on having a piece of the home services market just as Amazon and Google are diving in.

Is Groupon giving up too early? We’ve been impressed with the capabilities of the Gnome platform and the strategic vision behind it. The Serviz product is also impressive, although perhaps too rarified for Groupon, as it aims for higher ticket repairs and services. And separately, T-Mon is going to require enormous investments to grow and maintain its market share in a business that has come to not only include deals but also ecommerce, fashion and services.

The bottom line here, however, is that Groupon may have concluded that its merchant base sees it as a 3rd, 4th or 5th choice for this kind of activity — rather than as a substitute for blue chip and diverse players such as American Express, VeriFone, First Data and Salesforce. While Groupon can always work to keep repositioning itself, it currently seems most secure as a provider of discounted goods and deals that it continues to mold into an always on marketplace.

The post Groupon Re-thinks Its Ambitious SMB Platform appeared first on BIA/Kelsey - Local Media Watch.

Forty percent of merchants run some kind of “special” sales or promotions according to a Groupon survey of 25,000+ merchants. Half of the specials are offline, “trapped” on chalkboards and menus, noted Groupon VP of Marketplacest Dan Roarty, who was speaking at Money2020. “There is no aggregate source for them.”

Roarty said that the company, as part of its Local Operating System, has been working “to close the loop” via its G.Nome payments and loyalty system. Among other things, G. Nome provides a seamless redemption of deals, specials, coupons; automatic requests to leave feedback; and “automatic goodies” for being a great customer.

Many other elements are required to really close the loop, however, said Roarty. Groupon is currently soliciting help from partners who can enhance its efforts to provide payments, Point of Sales info, Geo Fencing, Wifi and Beacons. “Groupon can uniquely blend all these signals and put customers in control,” said Roarty.

The post Groupon Seeks Industry Partners; Wants to Close the Loop for Merchants appeared first on BIA/Kelsey - Local Media Watch.

When it comes to local commerce and loyalty programs, all roads lead to groceries. That’s the feeling of key companies in the space, including WalMart, Amazon, Google and eBay. Groupon this week announced Snap, a grocery coupon and loyalty program that gets it into groceries in a more meaningful way than prior efforts to go in via daily deals — where the discounts were not sustainable in an industry that is more dependent on “cents off” than “55 percent” off.

As reported in Chicago Business, Snap replaces Freebies, a coupon program launched in 2013 that has attracted 30,000 coupons from 7,000 retailers. Users of Snap receive offers and get money back after they aggregate $20 of discounts — if they upload photos of receipts showing the goods that were promoted. (This validation effort could prove a little klugey.)

While a robust grocery and delivery program has its own value, it may also lead to a key gateway into women shoppers; strong user behavior analytics; and peripheral deliveries or transactions with other goods such as electronics, etc. Groceries are also used more often than other key anchor promotion verticals, such as restaurants and services. Google similarly entered the grocery coupon business last year with the rollout of Zavers.

In Groupon’s case, the Snap program also supports its broader Marketplace effort, which allows advertisers to participate in many different channels (deals, coupons, ads). Seventy-five percent of Groupon business advertisers currently use Groupon for at least one feature in addition to the one-off deals. One of the key issues with Marketplace has been to provide a volume of listings so that searchers will always find things when they search for them. Currently, 9 percent of Groupon’s transactions emanate from Marketplace.

The Snap program does not get Groupon into dedicated home delivery — yet — but it does build out the marketplace, and could serve as an effective building block.

The post All Roads Lead to Groceries: Groupon Adds ‘Snap’ Loyalty Program appeared first on BIA/Kelsey - Local Media Watch.

When it comes to local commerce and loyalty programs, all roads lead to groceries. That?s the feeling of key companies in the space, including WalMart, Amazon, Google and eBay. Groupon this week announced Snap, a grocery coupon and loyalty program that gets it into groceries in a more meaningful way than prior efforts to go in via daily deals — where the discounts were not sustainable in an industry that is more dependent on “cents off” than “55 percent” off.

As reported in Chicago Business, Snap replaces Freebies, a coupon program launched in 2013 that has attracted 30,000 coupons from 7,000 retailers. Users of Snap receive offers and get money back after they aggregate $20 of discounts — if they upload photos of receipts showing the goods that were promoted. (This validation effort could prove a little klugey.)

While a robust grocery and delivery program has its own value, it may also lead to a key gateway into women shoppers; strong user behavior analytics; and peripheral deliveries or transactions with other goods such as electronics, etc. Groceries are also used more often than other key anchor promotion verticals, such as restaurants and services. Google similarly entered the grocery coupon business last year with the rollout of Zavers.

In Groupon’s case, the Snap program also supports its broader Marketplace effort, which allows advertisers to participate in many different channels (deals, coupons, ads). Seventy-five percent of Groupon business advertisers currently use Groupon for at least one feature in addition to the one-off deals. One of the key issues with Marketplace has been to provide a volume of listings so that searchers will always find things when they search for them. Currently, 9 percent of Groupon’s transactions emanate from Marketplace.

The Snap program does not get Groupon into dedicated home delivery — yet — but it does build out the marketplace, and could serve as an effective building block.

The post All Roads Lead to Groceries: Groupon Adds 'Snap' Loyalty Program appeared first on BIA/Kelsey - Local Media Watch.

Fifty plus industry leaders will grace the stage at Leading in Local: SMB Digital Marketing Sept. 22-24 in New Orleans. We’re looking forward to a great show. Want to do some research before the event? Here’s some recent BIA/Kelsey blog coverage of the featured speakers (Click on the hyperlinks).

Acxiom: Scott Howe, CEO (Keynote, Day 2)

Alignable: Eric Groves, CEO (Future Stars, Day 2)

Booker: Josh McCarter, CEO (Scheduling ,Day 2)

Facebook: Joe DeVoy, Product Manager, Local Ads, Facebook (Social Media Shift, Day 2)

First Data/Perka: Mike Lazarro, Head of Planning (Beyond Advertising, Day 3)

ForwardLine: Craig Coleman, CEO (Cultivating SMB Success, Day 2)

Groupon: Dan Roarty, VP, Product Development (Keynote, Day 2)

Local Media Association: Nancy Lane, President (Local Media Heavy Hitters, Day 3)

Radius: Megan Austin Karlen, VP (Smart Data, Day 2)

ReachLocal: Sharon Rowlands,CEO, (Keynote, Day 2)

SignPost: Stu Wall, CEO (Beyond Advertising, Day 3)

Verve: Tom Kenney, President (Brass Tacks Mobile, Day 2)

Wanderful Media: Doug Kilponen, COO (SMB Retail, Day 2)

Yelp: Darnell Holloway, Sr. Mgr., Community Outreach (SMBs On Stage with Yelp, Day 1); Peter Curzon, Business Development ( Brass Tracks Mobile, Day 2)

YP: Jeff Federman, SVP, Digital (Brass Tacks Mobile, Day 2)

The post Useful Research for New Orleans: Recent Blog Coverage, SMB Digital Marketing Speakers appeared first on BIA/Kelsey - Local Media Watch.

On the heels of last year’s LEADING IN LOCAL: SMB Digital Marketing show in Austin, we’ve just announced our agenda for this year’s big event in “The Big Easy”: New Orleans.

Our initial slate of Keynotes include:

Acxiom CEO Scott Howe;
ReachLocal CEO Sharon Rowlands
Google’s SMB Revenue director Steve Espinosa
Facebook’s Leader of SMB/Product Insights Joe Devoy

Additional Featured Speakers:

Sprint’s Karen Noel, GM, Small Business
Groupon’s Dan Roarty, VP of Product Marketing

Also at the event: Search marketing leader Kevin Ryan. Ryan will be debuting his new business best seller, “Taking Down Goliath: The Digital Marketing Strategy Guide for beating competitors with 100 times your spending power.”

More great speakers (We’ll end up with 40 or more):

Yelp’s Darnell Holloway, Sr. Manager, Local Business Outreach
NOLA Media Group’s Ricky Mathews, President
Morris Communications’ Steve Gray, Director of Strategy and Innovation
The Houston Chronicle’s Warren Kay, CRO
ForwardLine’s Craig Coleman, CEO
Search Influence’s Will Scott, CEO
BizHive’s Kim Feil, CEO
Wanderful Media’s Doug Kilponen, COO
Perka’s Rob Bethage, Co-Founder and VP
Booker’s Josh McCarter, CEO
Agendize’s Alf Poor, President

Will we see you down in New Orleans? Check out the full agenda here. And please register here.

The post Just Out: Hot Agenda For LIL: SMB Digital Marketing (Sept. 22-24, New Orleans) appeared first on BIA/Kelsey - Local Media Watch.

Living Social CEO and co-founder Tim O’Shaughnessy announced today on the company blog that he is stepping down. He will stay until a new CEO is found and installed — a process that he “hopes” will be completed during the first half of 2014. O’Shaughnessy previously worked at AOL, and transformed Living Social from its origins as a book review site.

O’Shaughnessy’s departure follows Groupon founder’s Andrew Mason’s departure last year, and marks an end of the founder’s era in the prepaid deal space. While we believe that prepaid deals are now a permanent part of the local marketing arsenal, the question remains whether there is a real future for the pioneer companies as they morph their models from high commission daily deals to shopping arcades, local targeting and business services.

Many, of course, have written off Living Social as a viable entity. The company sustained massive losses of $650 million in 2012 and $499 Million in 2011. Moreover, in a major loss of faith, Amazon wrote off most of its investment in the company. At the end of 2012, The Wall Street Journal cheekily suggested that it was one of the brands that would surely go extinct during the year.

Besides the losses, which were largely attributable to an expensive sales infrastructure, the company suffered major issues in 2013, including executive turnover; a multiple day outage; and having all its customers passwords hacked.

The company may choose to brand or merge with another entity that wants a head start in this space, such as a bank. But we see signs of life in many respects, including a deeper focus on mining their customer lists; efforts to morph beyond daily deals to coupons and other factors leading to deeper merchant relationships; mobile-oriented service, such as card linked offers; an enhanced focus on national advertising; retailer ties with companies such as Pier1 Imports, Macy’s, Reebok and OfficeMax ; and a pruning of unproven business areas, such as local events.

Last year, the company raised $110 million — including funds from many of its longtime investors –to get over the bumps. It also got additional money by selling South Korea’s T-Mon service for $260 Million to Groupon, and closed or sold several other international properties.

As O’Shaughnessy notes in his letter: “We now have the most stable and healthy business that we have ever had, and the luxury of having hundreds of millions of dollars in the bank to take us to the next level.”

We have more commentary on Living Social in this recent article by Steven Overly in The Washington Post.

Living Social CEO Tim O’Shaughnessy

The post Living Social CEO Tim O’Shaughnessy to Step Down: End of an Era appeared first on BIA/Kelsey - Local Media Watch.

Five years into its existence, Groupon is grappling with the reality that it must evolve beyond simply fire-hosing leads at local merchants and begin helping merchants manage those leads and turn more of them into long-term, profitable customers.

In an onstage interview this morning at BIA/Kelsey’s Leading in Local conference, Sean Smyth, SVP Partnerships at Groupon, described Groupon’s ongoing evolution from a pure demand generator for SMBs to an operating system that works as much on the yield as the demand side.

Groupon reported about 19.9 million Groupon NA users in the third quarter, operating in 565 cities around the world. The company works with roughly 500,000 merchants. While a large number, 500,000 represents just a fraction of the roughly 30 million merchants worldwide in Groupon’s core verticals.

Smyth acknowledged that its early efforts weren’t always helpful to merchants, referencing widely publicized incidents where an excessive stream of deals strained some small businesses beyond the breaking point. The progression from “blunt instrument” demand generator to platform has forced Groupon to get into the weeds and really understand how its customers’ businesses work.

“We needed to learn what it means to run a good mani-pedi place,” Smyth said.

Groupon has been adding capabilities to build out this operating system concept. It acquired Breadcrumb, a tablet-based point of sale system for restaurants, a key Groupon category. It has also added a payments and reservations as core capabilities.

“We are looking at different chunks of how we optimize things for the merchant,” Smyth said. “We are still in the beginning phases of moving from the demand side to the yield side [for small businesses].”

On any given day, Groupon has 65,000 deals running in North America. Smyth’s job is to find partners to help Groupon expand demand to meet its robust supply of deals. “We have tens of thousands of partners now. We are looking for more help on the distribution side.”

The post At Leading in Local: ILM 2013: Groupon Grows Up appeared first on BIA/Kelsey - Local Media Watch.

At Leading in Local: Interactive Local Media Dec. 10-12 in San Francisco, we are presenting 50 of local’s top players. Want some homework? We’ve pulled recent coverage of some of our speakers from our Local Media Watch blog. There’s plenty of great reading here, and you’ll experience — first hand — how fast things have been changing.

Patrick Barry, GM, Intuit/DemandForce
Intuit Acquires Online Scheduler

Matthew Berk, CEO, Lucky Oyster
Matthew Berk Rethinks WOM via Lucky Oyster

Brian Boland, VP, Facebook
Facebook/Google Vertical Wars: Facebook Grabs a Google Auto Exec

Suzanne Cooper, Managing Editor, SF Chronicle
SF Chronicle’s Cooper: The Fight to Save Journalism

Jeremy Geiger, CEO, Retailigence
Closed Loop Mobile Local Shopping: A Conversation with Retailigence

Dan Hight, SVP, xAd
XAd and Posterscope: Retargeting For The Real World

Ziad Ismail, SVP, Marchex
Marchex Maps Call Monetization Genome

Mark Roberge, SVP, Hubspot
BIA-Kelsey Briefing: Hubspot Points to a New Way of Selling

Chris Schroeder, Author , Startup Rising
Bookshelf: Christopher Schroeder’s Startup Rising

Sean Smyth, VP, Groupon
A Look at Groupon’s New Partner Network

Eckart Walther, CEO, CardSpring
Merchants Drive Their Own Transaction Marketing via Cardspring Connect

The post Reading List: Recent Blog Coverage of LIL: ILM Speakers appeared first on BIA/Kelsey - Local Media Watch.

Groupon’s transformation from a daily deals company to a multi-channel shopping promotions and e-commerce portal continue with its launch today of Freebies, a new program that groups together online coupons, promo codes. sales, giveaways and samples.

More than 5,500 brands are said to be participating. Retailers taking part with special offers in the initial launch include Macy’s, Nordstrom, Best Buy, American Eagle and Sephora. The effort is focused on the U.S., with international expansion expected in 2014.

The new effort pits Groupon against other providers such as ValPak, Gannett’s ShopLocal, Wanderful Media’s Find&Save, and adds to other Groupon branded efforts, including Groupon Local (local deals and offers), Groupon Getaways (travel) and Groupon Goods (electronics and other products). Groupon also offers Breadcrumb for B2B merchant payments, promotions and services.

Freebies is an interesting and ambitious application. By extending beyond daily deals and moving towards a shopping mall approach, Groupon has focused on becoming a more heavily trafficked site. The challenge will be to convince consumers to think of Groupon when they are researching their shopping choices. In this case, the eyeballs (help to) win.

Groupon VP Sean Smyth and Wanderful Media CEO Ben Smith are speaking at Leading in Local: Interactive Local Media Dec. 10-12 in San Francisco. You can register here.

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