Even as preprint circulars continue to account for a hefty chunk of newspaper revenues, the race to migrate these FSIs onto digital platforms that provide compelling shopping experiences and command premium CPMs is revving up. Associated Press will soon release iCircular for mobile devices, Gannett’s PointRoll operates ShopLocal, Local.com has a local option and several deal/offer aggregators are popping up. Travidia’s Find n Save, however, has gained early traction with publishers thanks in large part to a social + local + deals approach.

McClatchy is the earliest adopter, with co-branded Find n Save sites now live in 21 markets, including Charlotte, Miami and Sacramento. Find n Save leverages partnerships with Groupon (daily deals) and Milo (real-time retail inventory) and Twitter (Twitter streams) to create quick shopping routes for deal hunters.

Here are how the different tenets work together within the holistic platform:

– Group Buying: Groupon provides an exclusive daily deal in each of McClatchy’s markets through Find n Save. At NAA mediaXchange, VP of Strategic Development James Calloway said that this co-branded arrangement plays nicely with the separate deal-a-day program that the publisher is now independently marketing through a private label from Second Street.

Unsurprisingly, Calloway has seen the greatest successes in restaurant, recreation and personal grooming verticals. Retail (except for high-margin goods) are more suspect.

In addition to obvious brand and exclusivity perks, the Groupon Find n Save relationship integrates consistently across all McClatchy properties with “zero sales or fulfillment costs.” Effective CPMs have reached $125. The drawbacks: McClatchy controls the user relationship (and thus the data), but McClatchy handles the local merchant. Then there’s margin compression, with the publishers taking only 15 percent.

– Local Coupons: In addition to digital store circulars (listed as clickable tiles on a single page), Find n Save also features searchable local coupons by category and advertiser. Many are online-only, but print-to-online and online-to print also exist. All coupons are socially enabled for sharing, and local advertisers have unlimited coupon-refresh capability.

– Real-Time Inventory: A deal with Milo (now part of eBay) enables product searches primarily for national chains, though Calloway, much like Milo founder Jack Abraham, is hopeful that eventually more locals can participate. McClatchy takes a revenue share on clicks to retailer sites.

– Social Media Integration: Find n Save embeds a Twitter widget that streams active local deals, linking to the source. Shopping blogs from local newspaper columnists such as Sacramento’s “Shop Cheap” infuse useful content into the site. Calloway sees Find n Save’s shopping portal — an advertising vehicle — as primarily a “content play.” Social functionality enriches this ad-as-content value.

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During the 72-hour whirlwind that was ILM:10, several other announcements also came down the pike. Among them:

– Group buying giant Groupon continues its flurry of partnerships. The Chicago-based deal a day inked separate deals with the Chicago Tribune Media Group and JiWire. The Tribune agreement calls for Groupon to power local deals each weekday on the company’s recently launched ChicagoShopping.com site. ChicagoShopping.com wants to add depth to the deal-a-day experience by enabling users to personalize deals around specific shopping interests.

Groupon has several co-branded deals with traditional media companies, including McClatchy and Media General. Typically, it furnishes the publisher with an exclusive offer for its market audience and splits revenues equally. All merchant sales, creative and payment processing is handled by Groupon, which as a result, is able to add valuable buyer information to its database.

The pact with JiWire marks an important step for Groupon in targeting more granular, sub-metro deals. It also opens up new inventory possibilities for a brand that has quickly seen demand outstrip supply. JiWire’s network of public Wi-Fi hotspots (more than 30,000 in locales such as cafes, coffee shops and airport lounges) will allow for hyperlocal targeting of deals at venue level. JiWire users are typically on-the-go and tech-savvy, which may ripen new deals categories such as travel-oriented restaurant and retail chains.

Deal-a-day competitor LivingSocial has also debuted sub-metro deals, but not with such granularity. In related efforts to open up new inventory, Groupon introduced personalized deals over the summer.

– It didn’t take eBay long after its $75 million purchase of Milo to begin incorporating the company’s real-time shopping data into its product line. EBay is integrating Milo’s local store inventory and pricing information into its RedLaser barcode scanning applications.

RedLaser’s single-scan interface enables product and price comparisons at nearby stores. Milo’s data adds yet another content layer. EBay is also expected to incorporate Milo functionality into other online and mobile products, notably its Shopping.com site and perhaps ProStores (an online storefront software company for SMBs).

– ComScore released an early wave of holiday online spending stats (Nov. 1-Dec. 3). The gradual economic comeback has triggered a 12 percent increase year over year in total online spend. Cyber Monday (Nov. 29) eclipsed $1 billion in e-commerce by itself.

Large national brands have experienced the strongest growth. The top 25 online retailers are up 20 percent over 2009, and some of that increased market share is at the expense of small and mid-market shops, where sales remain flat.

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EBay’s e-commerce prowess is well-established. Now, it is making inroads into the nearly $1 trillion online-search-for-offline-purchase market with the acquisition of Milo, a shopping search engine that catalogs and categorizes real-time inventory at more than 50,000 stores (national retailers such as Best Buy, Nordstrom and Advance Auto Parts participate).

Terms of the deal were not officially disclosed, but reports put the number at $75 million. The acquisition marks just the latest of many recent turns in online product search. Google recently revamped its Blue Dots platform with the full-scale rollout of Product Search, then Wi-Fi mobile ad network JiWire purchased NearbyNow, another Milo competitor.

The move raises several intriguing possibilities for eBay, which stated in the official release that it will implement Milo’s technology into its own Web and mobile offerings. Whether that means the dissolution of Milo.com is yet to be seen. Deep integration with eBay’s Shopping.com is logical. Bringing Milo to ProStores (eBay’s online storefront software company) could enable local shopping search to move down market to smaller businesses, a scale challenge that Milo CEO Jack Abraham recently conveyed to BIA/Kelsey.

Then there is the mobile opportunity. Milo’s product and price comparisons could be stitched into eBay’s Red Laser mobile application, which allows for bar code and QR code scanning.

Projections for the research online, buy offline market are robust, with $917 billion in retail sales pegged for 2010 and nearly half of all in-store purchases being informed and/or motivated by online search.

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Google galvanized a lot of mainstream attention for the online-research-for-offline-purchases market with its recent rollout of Product Search. But with the total sales pie expected to eclipse $1 trillion in 2011, it’s a big enough playground for more than just the big G to stock store inventory online. Milo, which jumped into online-to-offline product search while Google was beta testing Blue Dots (the precursor to Product Search), has added a series of new features and enhanced its partnerships to make it a viable option during the holiday shopping spree.

First, Milo teamed with PriceGrabber to list product inventory at local stores on its site. It has a similar deal with consumer reports, and well as integration with Yellowbook.

Milo currently teams with 150 retailers (Best Buy, Nordstrom, Advance Auto Parts) encompassing more than 50,000 stores to show real-time product availability and price. CEO Jack Abraham not only wants to recruit more retailers, and perhaps move down-market to attract a new breed, but also sees partnerships as vital to expanding Milo’s visibility for those stores. He told BIA/Kelsey that partnerships span four categories: “search, shopping, local and media.”

The Palo Alto, California, start-up also went mobile for the first time, unveiling an Android app (and soon an iPhone counterpart). The early success sent Abraham a strong message about the fundamental value of mobile shopping and the importance of fostering a seamless mobile experience. “I was skeptical from a user standpoint initially,” he conceded. “But it’s been huge for us. The direct relationship through the mobile platform allows you to truly own your users.” Now, ensuring that their retailers are automatically optimized for mobile is an important next step in Milo’s evolution onto the new platform.

With Google already allowing businesses with registered listings on Places to offer coupons and Facebook having recently rolled out Deals, it was inevitable that Milo would counter with a similar option. Indeed it has, offering both printed and buy-online, redeem in-store coupons that pop up automatically based on a user’s location and specific product search.

Coupons are also equipped for mobile, so consumers can simply call them up on phones and have them scanned in-store. And unlike Facebook, Abraham stressed, no check-ins are required for special offers to activate. Instead, they appear when consumers — potentially new customers — are already deep in the purchase funnel, searching for specific goods and already primed to buy.

Abraham is serious about moving down-market to target smaller businesses, even local SMBs. But can this be accomplished with any measure of efficient scale? Abraham acknowledged that “it’s a hard problem to crack,” but one that Milo is working on.

The company recently conducted a trial with inventory from 100 pilot stores and found the local merchants, generally speaking, to be engaged. Among many challenges, the greatest may be adapting the technology for smaller businesses, which have different inventory systems and product data than the national brands that Milo is accustomed to servicing. A turnkey solution that SMBs can easily install will be necessary.

The scale challenge extends to merchant recruitment as well. That’s where media companies with embedded local sales forces such as Yellow Pages companies could be natural partners. Abraham said that Milo has been approached about this idea, and though nothing is active yet, it is in the company’s consideration set.

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Evidently, the popular adoption — or lack thereof — of location-based applications and services may simply be a function of whom you talk to. JiWire asked the on-the-go audience that it serves ads to across public Wi-Fi networks, and the holiday outlook for LBS is markedly sunnier than the dimmer results recently released by PEW.

In a sample of its tech-enthusiast users for its Q3 2010 Mobile Audience Insights Report, JiWire returned that an astounding 89 percent of respondents are likely to use location-based tools this holiday season. These are the same Foursquares, Gowallas, Loopts, SCVNGRs, et al that only 4 percent of PEW’s cross-section reported using in a study published earlier this month. The key differences: JiWire’s audience is exclusively Wi-Fi (thus catering to an on-the-move crowd), with much of its wireless distribution occurring in venues such hotels and airports that skew toward higher-end demos that are heavier holiday spenders.

David Staas, JiWire’s SVP of Marketing, told BIA/Kelsey that “over the last 12 months, we’ve seen an explosion of location-oriented content that’s taking place because of consumer demand. Consumers are starting to think from a location-centric perspective.”

JiWire’s majority, 61 percent, value finding store locations above all other mobile features. Interestingly, 33 percent prefer using LBS to search the product inventory of nearby stores. This validates Google Product Places, Milo, Krillion and a host of others that are partnering with retailers to share real-time inventory, an idea founded in research that indicates that most purchases still occur in store … but nearly half of them are motivated by online research.

LBS has begun to earn a checkered name in some circles because of the gimmickiness and fatigue associated with check-ins and virtual rewards. But JiWire suggests that 49 percent of the on-the-go crowd use these capabilities. They’re checking in principally to unlock deals and promotions, not to accululate virtual capital, supporting the notion that tangible bait is pivotal to drive store traffic.

This reaffirms a previous JiWire study that showed that the majority (51 percent) of its on-the-go audience was comfortable sharing location in exchange for more relevant advertising because, as Staas said, “it’s a value exchange. They’re getting something useful back.”

Also noteworthy: 30 percent of the sampled audience is willing to travel more than five miles to redeem a mobile coupon. For all the talk of hyperlocal and geotargeting, these results affirm the importance of a different term, one that Gannett Digital Network General Manager Josh Resnik recently shared with BIA/Kelsey — “hyper-relevancy.” People will travel if offers are contextually and psychographically germane. “It’s about matching audience with location,” Staas said. “Location has different components, including marketing to the right consumer.”

So, where does the truth lie? Again, it probably depends on whom you ask, and chances are it falls somewhere in-between. By the same token, several recent announcements have the potential to mainstream LBS well beyond the walls of technophilia. Facebook Deals and Places, coupled with Google Places. Place Search, Product Search and Hotpot, run the gamut of LBS, encompassing local, social and retail.

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Google has been telling anyone that will listen just how bullish it is on local/mobile commerce, and it has backed the bombast with a series of initiatives (Places, Place Search and Tags just to name three recent, relevant examples) to aggressively court SMBs and better connect with consumers at a neighborhood level. The latest is the formal rollout of Google Product Search, which will provide searchable and categorizable online product inventory for local branches of more than 70 retailers.

Product Search extends what began in March with the beta trial of Blue Dots, which charted product stock at selected retailers. Now several additional sellers are joining the program, including Best Buy and Williams-Sonoma.

Google joins a host of companies trying to connect online product search to offline purchase, including Milo, Krillion, ShopLocal and NearbyNow. But the Mountain View, California, search giant isn’t worried about the numbers game. Its focus lies on two other numbers:

1) The U.S. online-research-to-offline-buying market is estimated at $917 billion in 2010, swelling to $1 trillion next year. It accounts for the lion’s share of spending, with online e-commerce spending commanding only 7 percent of total U.S. sales.

2) Of the 93 percent of retail purchases occurring in-store, almost half are driven by online research.

Google Product Search does more than simply list inventory by product and store. Consumers will be able to tailor searches to only those brands that are currently available at nearby locales. It is also introducing a “popular products” feature, which shows most-viewed items within a particular search category. “Aisles” enables searchers to organize targeted queries into subcategories.

Google is complementing its release of Product Search with a mobile component. Its Google Shopper application for Android allows on-the-go shoppers to use “brand” and “price” search filters for more efficient discovery. Barcode scanning functionality will remain, too.

With nearly $1 trillion in sales, the pool looks deep enough for multiple competitors. In fact, Milo CEO Jack Abraham recently told BIA/Kelsey that it’s big enough that one company won’t dominate, and that Google’s serious foray is “helping to develop the market.” 

Of course, Google can play zero-sum games (just ask its online search counterparts). A crucial next step for the big G, or any other company seeking growth and differentiation, is to extend online-inventory-to-offline-purchase to SMBs. And that is no easy proposition considering that there is not a clear-cut, frictionless roadmap for how to capture that opportunity at scale.

Courtesy: Google

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