Ted Leonsis, Groupon vice chair, American Express board member and Internet pioneer, emphasized the importance of scaling for local in a global economy during a keynote at ILM East yesterday. “Indiana really matters. India matters more,” said Leonsis, pointing out that for larger companies, most growth will come from outside the U.S.

The way that growth is measured, however, is rapidly changing. “I try to follow the new currencies: time, attention and clickstreams,” he noted. “Now you see payments in pixels, Facebook newsfeeds, or points and rewards. AmEx has trillions of points.

While growth for “the biggest companies” comes from serving the entire international marketplaces, local needs are universal.

“I love local; we built Internet on businesses created about ‘you,’ ” said Leonsis. “There is no bigger business imaginable.” He noted special opportunities in “MoSoLo….the convergence of mobile, social, video.” Mobile will make up 88 percent of digital advertising, he suggested, citing analyst projections. “One thousand cities are ready for MoSoLo.”

Leonsis believes that the largest companies will soon be making spending sprees in the local arena. Local entrepreneurs should realistically shoot for selling their companies because only a couple of companies end up IPOing in the public market, added Leonsis, who is, of course, a major investor.

Leonsis noted that the largest companies such as Google, Microsoft and Cisco are sitting on almost a trillion dollars of retained earnings. “That’s pent-up cash. They will want to fill in their value chains.”

Channels are also changing, and quickly. Email usage is way down and has “become a deliverer for e-commerce push. Email is for manicure or pedicure deals,” said Leonsis, noting that Groupon and Facebook are really poised to leverage this with their massive email lists. Phones, meanwhile, are for texting. The average teen sends 70 texts a day and barely use any minutes to talk.

But Leonsis predicts that video will emerge as the new killer app as it becomes the core medium for self expression and sharing. “The YouTube phenomenon is truly amazing. We’re all becoming cable MSOs.”

Video also will be key to the future of retail and education. Retail site visitors who view video are likely to stay on site two minutes longer on average and are 64 percent more likely to purchase than other site visitors, said Leonsis. Video is a foundation for “next generation commerce.”

The pursuit of closed loop network is the really big game here, Leonsis noted. Amazon has made everyone an affiliate and a reseller. Similarly, PayPal made made everyone a small business with 100 million-plus accounts for money transfers and payments. EBay has made everyone an entrepreneur.

Moreover, Google has 8 million advertisers on file, and invoices 20,000 advertisers. AmEx has developed a closed loop system of its own, and Groupon has created “curated local commerce.”

But Leonsis is skeptical that the world of interactive local commerce is something that start-ups can gain traction in. “No one will give an eight-person start-up their social security number. Payments are not for the faint-hearted. Start-ups are better off looking for margin opportunities.

“I don’t want to see any business plan saying ‘I’ll be the next Groupon.’ Verticalization happens.”

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During the first ever public presentation of Google Offers at ILM East today, Google Offers head Nitin Mangtani noted that Google Offers is now live in 40 cities, but he emphasized that Google’s after more more than just deals. The local commerce space is much broader and richer than deals, although deals are very exciting, he said.

Google wants to “enable an ecosystem that connects consumers more seamlessly, and drive e-commerce for all,” added Mangtani. Publishers should work with Google to “get noticed, get customers and get paid,” he said.

Google’s local vision is to help local businesses connect with consumers, noted Mangtani. Deals are part of discovery, but so are other promotions; just as Places are part of Locate, Wallet is part of Purchase, Adwords is part of Research, and Wallet is part of purchase. The company also wants to work with external partners. A company such as Idea Labs’ Punch’d could be part of Become Loyal, he noted. Google Offers currently works with 30 partners, including such companies as Gilt City, Zozi and KGB Deals.

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The New York Times and other news organizations have been hampered by the short cuts of HTML and hyperlinks, but are now reclassifying to provide more structured, fluid data in a major development with massive implications, noted New York Times VP of Research Operations Michael Zimbalist, who keynoted Day 2 at ILM East. The benefits are immediate in terms of SEO, but longer term, provider richer product for consumers, said Zimbalist.

“Information has become increasingly granular or structured,” he said. “Each unit of content has extensive machine readable metadata about itself.” Fluid information can move more easily among machines and people.

In the case of The New York Times, it can now process the 300 pieces of professional content it produces every day — a brick of compiled information — into multiple formats, including things such as personal editions and slide shows. “You are reaching underneath the databases the power the Web to do new things,” said Zimbalist.

The key is to move the surplus of names to strong identifiers that are linking to data cloud driven by meta data. The Times, for instance, is embarking on moving all its data to DBpedia, which drives Wikipedia, Freebase, which is owned by Google, and GeoNames. To date, 29,000 names have been recontextualized for a new semantic platform — a “super librarian” — which includes 39 percent of people (“Edgar Allen Poe”), 31 percent of organizations, 76 percent of locations (“Park Slope”) and 14 percent of descriptions. “The future is bright for librarians,” joked Zimbalist.

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It’s safe to say that Ted Leonsis is at the center of the local revolution. He’s done it all, from his early days trying to jump-start e-commerce at Redgate, to his work building a local framework at AOL (i.e., MapQuest, Digital City, MovieFone, Studio Now); to his current role as vice chair, Groupon; board member, AmEx; a principal with the $450 million Revolution Growth Fund; and, of course, as owner of the Washington Capitals, Washington Wizards and the Verizon Center.

What is Ted’s Take on key local issues? We’re talking live with Ted Monday at 3 p.m. Pacific/12 p.m. Eastern in conjunction with his keynote at ILM East in Boston, which takes place March 28.

Sign up for the free webinar. Registrants also get a discount code toward the conference, which is March 26-28.

The post Webinar: Ted Leonsis Talks Local, Live on Monday From Verizon Center appeared first on BIA/Kelsey - Local Media Watch.

Constant Contact, an email marketing company, announced its acquisition of mobile app developer CardStar this week. CardStar developed a mobile app where consumers are able to store all of their existing loyalty cards, rather than having to carry multiple, physical cards. Constant Contact will continue to operate CardStar’s free mobile loyalty application, which is available on major mobile platforms, including iPhone, Android and BlackBerry. Retailers can also offer coupons and special deals through the app. Terms of the deal are undisclosed.

Constant Contact’s acquisition is part of its makeover into an all-purpose marketing platform for SMBs. At the end of last year, Constant Contact launched a new offering, Social Campaigns, aimed at helping SMBs grow their fan base and drive engagement on Facebook, Twitter and LinkedIn. Mark Schmulen, general manager of social media at Constant Contact, is scheduled to speak at ILM East in March about local social media, customer engagement and the direct connection to sales.

CardStar’s employees will join the Constant Contact team, including CEO and Founder Andy Miller and CTO and Founder Danny Espinoza. Miller will serve as the director of mobile products. Espinoza will join Miller’s team to lead future product direction.

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ILM East is coming back to Boston March 26-28 with a lineup of doers and innovators who are transforming and redefining the local space. Highlights include a featured keynote from industry legend Ted Leonsis (Groupon vice chair/AmEx board member/sports team owner/AOL mastermind), along with keynotes/interviews from Jason Calacanis, Leslie Berland, Jay Herratti, Michael Zimbalist and Michael Silberman.

Other highlights of the two-day event includes a preconference rundown on local search run by Andrew Shotland of Local SEO Guide; a full plate of top BIA/Kelsey research and forecasts; a special venture capital panel; and innovator panels on social, mobile, deals, video and hyperlocal (the latter co-moderated by Merrill Brown).

KEYNOTES/KEYNOTE DISCUSSIONS
� Ted Leonsis: Owner, Monumental Sports (Washington Capitals, Washington Wizards); Vice Chair of Groupon; board member of AmEx, former vice chair of AOL; author, “The Business of Happiness”
� Jason Calacanis: CEO, Mahalo; investor. Calacanis’ career has been at the cutting edge of local and social media and reflects all the big trends, from his development of The Silicon Alley Reporter to Weblogs (AOL), Mahalo and the creation of TechCrunch50 and Launch.
� Leslie Berland, vice president, social strategy, American Express. Berland’s a major deal maker deeply involved in AmEx’ss mega Foursquare and Facebook deals.
� Jay Herratti, CEO, CityGrid Media. Herratti always gets top rankings at our events. He runs IAC’s super quad of the CityGrid Media Network, Citysearch, Urbanspoon and Insider Pages.
� Michael Zimbalist, VP, research operations, New York Times Co. Zimbalist leads the NYT’s 12 person-research unit. He’s deeply immersed in cutting-edge social, mobile, tablet and video efforts.
� Michael Silberman, GM, New York Magazine Silberman is the mastermind of NYMag’s development of a super set of verticals catering to the “New York state of mind.”

FEATURED SPEAKERS
� Bill Bice, CEO, SpaBoom
� Merrill Brown, Cofounder, MSNBC.com, Court TV
� Jim Douglass, EVP, Cartera Commerce
� Jere Doyle, CEO, EverSave
� Walt Doyle, CEO, Where
� Adam Japko, CEO, Digital Sherpa
� Maria Kermath, Director, New Tech & Sales Apps, AT&T Advertising Sales
� Mark Josephson, SVP, AOL Local
� Charlie Kim, CEO, Next Jump
� John McIntyre, CEO, Pixelfish
� Randa Minkarah, SVP, Revenue, Fisher Communications
� Randy Parker, President, SMB Apps
� Mark Schmulen, GM, Social Media, Constant Contact
� Andy Slater, VP, Digital Agency Sales, Katz 360
� Andrew Shotland, Publisher, Local SEO Guide
� Christopher Tippie, CEO, FindNSave
� Darren Waddell, EVP, Product and Corporate Marketing, Reply.com

Join hundreds of senior level local executives at ILM East for the local community’s best networking and insights. You can register here for earlier bird rates.

Internet Pioneer Ted Leonsis

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Many thanks to our BIA/Kelsey community for the real success of ILM East last week in Boston. We appreciate that there was a ton of competition for people’s time, and we still managed a very strong showing (final tally: 455 participants). It was truly a powerhouse event with great learning and networking, and for me, a career highlight.

We got many testimonials (thank you!), but I like this one from Clipper Magazine CEO Steve Zuckerman. “The show was very informative. It got me thinking about things a little differently.”

Mission accomplished? See you all again soon.

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Brian Costello, GM and VP, Digital Media and The RedPlum Network, Valassis Communications; Jere Doyle, founder, president and CEO, Prospectiv; and James Green, chief marketing officer, Travidia took on the topic of “Deal Universe: The Big Picture for Coupons and Sales” at ILM East.

Some common themes were the need to create a context around local content as that creates relevance around consumers shopping for local deals. Costello shared that national and regional advertisers are very concerned about targeting has to be a local message.

Green said an opportunity exists to reach broad demographic groups, but it is important to make the use of deal services by clients as easy as possible to scale the business. Doyle observed that “deal a day is a retail business, not an advertising business; [there are] incredible amount of retail issues associated with it.”

Doyle argued that coupons are more “in” now. This may be so, but Costello asserted that deal a day will have to do more targeting to increase it market presence.

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It’s often noted that the deal-a-day space is burgeoning because it is so easy to enter. Success, however, is another matter.

Understanding the key drivers of success requires data, and Jim Moran, founder of Yipit, shared some data-driven insight on deals this morning in “Group Buying by the Numbers” at ILM East in Boston.

Moran calls Yipit “Kayak.com for the deal space.” The company recently moved beyond deal aggregation to add a data product, responding to companies asking Yipit to repurpose its consumer data, past offer data and competitive information. Companies use the data to understand which merchants to target, which price points work best and so on.

Here are some of Moran’s early takeaways, after about one month of tracking the space in detail, as well as his general analysis of the space.

* Proliferation. There are more than 400 daily deal sites, a proliferation Moran attributes to white-label providers. A key factor in this growth is the entry of major media companies.

* Low bariers to entry; high barrier to scale. Players with the larger list are able to sell more vouchers, which leads to more offers, more commissions, more salespeople, more offers, etc. “There is an increasing reward to being larger in the space.” Moran sees the major players staying big, with others that could do well including the major publishers that enter the space.

* Operators follow “bifurcated” strategies. Operators are following two paths in how they structure deals, favoring offers with higher deal value, as well as very low value deals that are effective in acquiring and retaining customers. One key to the lower value offers is once customers buy a deal, they are more likely to buy another, perhaps more lucrative, deal.

Retention is key. Because discounts are so huge, the initial economics of a deal break even (or worse). The idea is bringing in a repeat customer. The target retention rate for a successful deal is category dependent, with as low as 10 percent or as high as 19 percent being necessary for a deal to work.

Moran cited the extreme example of a 69 percent off deal for a butcher in Toronto that generated $200,000 in commission revenues. It’s unclear what retention numbers the butcher needed to make that deal seem like a good idea in retrospect. Moran said in general that more personalization of deals will be a big driver of retention.

Some interesting random datapoints:

* Groupon remains the No. 1 deal site, generating three times the volume of LivingSocial, but Groupon has a lower revenue per deal than LivingSocial.

* The breakage rate (unredeemed vouchers) on deals is roughly 20 percent.

* “Hair removal” is the best revenue generating category.

* Among merchants who have done deals,  93 percent say they would like to do another.

* Asked if they would shift spend from other media to fund deals, 43 percent said yes.

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In two short years, LivingSocial has blossomed from a Facebook application development shop into a leading group buying platform in 230 markets and 12 countries. But the question du jour in deal a day isn’t “what have you done?” but “what’s next?” At ILM East, LivingSocial Chief Operating Officer Eric Eichmann mapped a diversified plan that includes instant deals, new verticals and increased segmentation.

LivingSocial is currently testing Instant Deals in its hometown of Washington, D.C. Flash sales are uploaded onto a mobile app and allow merchants to push specific goods or services in time-sensitive windows (e.g., “half off lunch for the next three hours”). Instant utilizes all four of the company’s “pillars of success”: local, mobile, social and commerce.

Eichmann shared social statistics that are particularly striking. For instance, during LivingSocial’s highly successful national deal with Amazon, 40 percent of purchases were a byproduct of link sharing. There were 185,000 shares on Facebook alone.

Moving forward, Eichmann and team think they can continue to leverage “discovery and surprise” to delight customers. Notably, this is manifesting itself  in Escapes, a higher-touch, more considered set of experiences that grow out of the company’s acquisition of Urban Escapes.

Also, look for LivingSocial to continue to segment deals geographically, burrowing into smaller districts and neighborhoods based on customer propensity to shop close to home. It’s already experimenting with sub-metro segmentation in markets such as D.C. and New York.

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