Groupon announced today that it will work with McClatchy, the third largest newspaper chain, in 28 McClatchy markets. The rollout begins this month in Sacramento and Kansas City. Other McClatchy markets will be added over the next several months, possibly including titles in Ft. Worth, Miami, Charlotte and Raleigh.
Like Living Social’s earlier deal with The Washington Post, the deal is based on McClatchy’s powerful local promotion capabilities. Groupon deals will be promoted throughout newspaper websites in contextually relevant sections (i.e. dining). Print promotion, however, is not part of the deal at this point. Sales also aren’t part of the deal, which is non-exclusive. Other media companies can sign with Groupon both in McClatchy markets and outside of it.
Groupon appears very likely to announce other local media deals in the near future – a likelihood driven by the efforts of Business Development VP Sean Smyth, a longtime local media vet with Tribune, Metromix and other local media companies. In general, there is recognition that Groupon has developed a presence in several McClatchy markets without any brand assistance. Groupon will, however, develop custom versions specifically for McClatchy readers.
At our Marketplaces conference last March in San Diego, Groupon CEO Andrew Mason said that his early vision was to team with The Chicago Tribune, his hometown paper. But he soon realized that Groupon could roll out faster and with more editorial independence by working solo and relying primarily on telesales. Now, Groupon expects to surpass The Tribune’s circulation in Chicago by year end. But evidently, newspapers local promotion capabilities remain a strong incentive for partnerships.
McClatchy VP Chris Hendricks tells us that he sees a net plus for both companies by helping promote Groupon. “They’ve got their space,” but McClatchy offers Groupon more “entry points” to readers and deals, he says.
The deal also enables maximum flexibility for both companies. Conceivably, the Groupon deals could be included in a product suite, he says. The limited nature of the deal, and limited commitment, is also seen as a plus. “We have a lot of stuff going on,” says Hendricks. “An affiliate marketing program fits in better,” and “lets us get out of the gate.”