All posts by Peter

First Data Bets on Virtual Gift Cards to Drive Local Commerce

Gift cards have been growing astronomically and now make up an industry nearing $100 billion in revenues. You’ll see racks of cards for national brands and retailers everywhere, from Safeway to Bed, Bath & Beyond.

But can local merchants get in the loop? We’ve seen gift card activity increase in travel, spa & salon and hospitality. Most of these are sold in person or on web sites.

And a second question: can they go virtual, with gift cards stored in e-wallets and easily bought, sold and transacted via mobile phone? While the industry is relatively nascent, Mercator Advisory Group says loads onto digital cards have tripled from 2012 to 2014.

That’s the bet that payment processing giant First Data is making today via the acquisition of Gyft, a Silicon Valley ewallet provider that has contracts with 200 major retailers.

First Data is hoping to extend its own prepaid ties with over 300 national retailers, while also working with SMBs who use its Clover touchscreen POS solution. Its Perka loyalty program customers may also be recruited.

Not everyone thinks they can easily move into Gift cards, however. Facebook, today, announced that it was shutting down its virtual gift card service – apparently, it sees other avenues for getting into ecommerce, such as buy buttons, as more immediate and customer-centric.

Perka co-founder Rob Bethge is a featured speaker at BIA/Kelsey’s Leading in Local: SMB Digital Marketing conference Sept. 22-24 in New Orleans. Check out the full agenda here. Prices go up after July 31.

Coming to New Orleans? More Top Speakers Announced for SMB Digital Marketing, Sept. 22-24

We keep adding and adding to the lineup for our SMB Digital Marketing event, which takes place Sept. 22-24 in Rockin’ New Orleans (yes, we are trying to top last year’s super event in Austin). We’re boasting 32 industry leaders for the event now, and expect to end at 40+. Among our new adds are:

• Julien Billot, CEO, YPG
• James Croom, General Manager, Google My Business, Google
• Peter Curzon, Business Development, Yelp
• Tim Williamson, CEO, The Idea Village
• Neal Polachek, Board Advisor, Buzzboard
• Matt Graves, CDO, Infogroup
• Faith Murphy, Director, Channel Management,Yahoo

These leaders add to an already steller lineup featuring Acxiom CEO Scott Howe; ReachLocal CEO Sharon Rowlands; Groupon’s VP of Local Dan Roarty; Facebook’s Joseph Devoy; Sprint’s SMB GM Karen Noel; Booker CEO Josh McCarter; and Kevin Ryan, author, Taking Down Goliath.

Let’s highlight a few more of our sessions:

• A powerhouse newspaper SMB panel featuring NOLA Media Group Publisher Ricky Matthews; The Houston Chronicle’s CRO Warren Kay; and Morris Communications’ Steve Gray
• A great local search session with Search Influence CEO Will Scott and Matchcraft SVP Brad Petersen
• A deep look at SMB loyalty programs with Perka cofounder Rob Bethge and Mercury Payments SVP Randy Clark.

Check out the full agenda here. Each of the speakers has been hand-picked by the BIA/Kelsey analyst team. Will we see you in New Orleans? You may register here.

Zillow to Buy Trulia; Will Pursue Twin Brand Strategy

Zillow is buying Trulia, its chief rival, for $3.5 Billion in stock. The two companies – both nine years old — have a lot of overlap currently. But after the deal closes in 2015, they will seek to develop two differentiated marketplaces for real estate-related information, which includes house sales, rentals, mortgage and related national and local advertising.

As the acquiring company, Zillow would focus on “top of funnel” awareness advertising. Trulia, meanwhile, would focus more on specific agent-related, final purchase (or rental)- related advertising. According to ComScore, Zillow attracted 83 million unique visitors in June, while Trulia attracted 53 million. Roughly half of Trulia’s visitors do not visit Zillow.

The proposed purchase price, roughly $70.53 a share, represents a 25 percent premium over Trulia’s current stock price. Combined revenues from both companies could produce $721 Million in 2015 under present conditions, according to estimates by Benchmark Research. Separately, the companies estimate $100 million a year in cost savings by eliminating redundancy. Under terms of the agreement, Trulia CEO Pete Flint will report to Zillow CEO Spencer Rascoff.

In our view, the primary goal of the acquisition isn’t to build the one-two punch of differentiated real estate sites, or even to maximize cost savings from eliminating overlap. Mostly, it takes Trulia out as a rival company, and per GeekWire, it also ends apparent merger talks between Trulia and Move.com, the #3 Real Estate site that controls the NAR’s Realtor.com site. (It also isn’t the first time Trulia has considered selling itself. Google apparently was interested in buying the site in 2009 when it was pursuing a major listings effort).

Over the next several years,the effort to differentiate the two sites make more sense than to collapse them into one brand. Such a strategy would be reminiscent of what AutoTrader.com has accomplished with KBB.com; The Weather Co. has accomplished with Weather Underground; and what Match.com has accomplished with the purchase of several dating verticals.

Winning national advertising dollars is especially viewed as a key growth area. Zillow has budgeted $45 million in marketing dollars this year to accelerate that effort. Zillow, perhaps best known for its controversial Z-Estimates, sees a unique advertising market among speculative home browsers, targeting everything from landscapers to auto companies. Trulia, meanwhile, has been less controversial than Zillow in the Realtor community and might be a better brand for Realtors to work with.

Will there be anti-trust issues? Both Zillow and Trulia tend to draw from Realtors and brokerages that are digitally minded in their advertising. Zillow head Rascoff, however, suggests that the market is nascent and represents less than 3 percent of the $12 Billion market in real estate advertising.

We don’t know about that. The reality is that the two companies actually tie up a great deal of the linkages between real estate advertising and distributors, such as the search engines, local media companies and others. But ultimately, it probably falls short of real anti- trust concern.

Zillow CEO Spencer Rascoff at a recent BIA/Kelsey conference

CBS Local Buys Eventful (Updated)

Event listing sites were once seen as a leading hub for local media, and a great generator of user generated content and social media. It isn’t clear that they’ve fully caught on in these ways, but they remain strong promotional assets; sell lots of event tickets; and they also bring in related advertising.

CBS Local — which supports CBS Local Radio and TV stations — obviously sees their value. Today, it announced it is acquiring Eventful, one of the leading listings sites – and one that has evolved over the years to become a major social media player for local entertainment, and for entertainment services and lifestyle brands targeting local users (i.e. TV shows, movies, music, games, liquor and even politicians.) CBS Local has been an Eventful customer for some time.

Recently, for instance, Eventful created a competition among cities to host a preview of the new “Sleepy Hollow” episode. The campaign got 30,000 participants, 18 million social impressions, one million trailer views and 35 million digital media impressions. Thirty-one percent of the participants shared their voting on Facebook and Twitter.

Such efforts illustrate Eventful’s ambition to become “a behavioral targeting engine involving e-mail marketing and other personalized outbound promotions.” The company has been sending out over 100 million emails a month.

“The local targeting capability of the Internet and direct e-mail marketing services like Eventful helps agencies appreciate the benefits of local focus,” CEO Jordan Glazier told BIA/Kelsey a couple of years ago. “They are increasingly including local as a requirement within their buys.” Under the new regime, Glazier becomes SVP of Digital Strategies.

Will CBS Local focus on Eventful’s newer entertainment promotion areas or its listings activities? CBS Local President Ezra Kucharz told us that it is definitely planning to continue both of these efforts. They will complement CBS’ strong audio streaming and video streaming. But he indicated that Eventful’s core business of listings probably remains front and center. In particular, CBS continues to focus on personalizing its user experiences.

The price wasn’t announced. Eventful has raised over $19.6 million, and is said to have been profitable in recent quarters.

Eventful CEO Jordan Glazier and founder Brian Dear

Wanderful Media Targets SMB Retailers With ‘Find&Save Storefront’

When it comes to search, promotion, customer engagement and just getting found, the challenge for smaller retailers is to level the playing field with larger players (i.e. Macy’s, Kohl’s, Sears). That’s the idea behind Wanderful Media‘s new Find&Save Storefront, an App that allows SMB retailers to promote sales goods, seasonal collections and other items. Several hundred retailers have downloaded the App, which is in soft launch in several test markets. A major launch is planned for October.

The Storefront is an extension of Wanderful Media’s current mission with its Find&Save brand, which currently focuses on large retailer and brand sales “circular” information, which are distributed to about 500 newspaper sites around the U.S. on FindnSave.com and apps for iOS and Android devices.

The new effort marks the second time that Wanderful has tried to serve SMB retailers. Earlier iterations of Find&Save included ads from SMB stores. These were removed from the site’s relaunch in April 2013, however, because they were not really on par, aesthetically, with the larger retailer ads.

The Storefront App, which we found easy to use, enables SMBs to automatically claim locations by their phone number. Once their site and location have been claimed, they can tie geo-sensitive promotional offers or other verbiage to pictures of items they can take with a smart phone. SMB retailers can create as many offers or sales events as they want.

Find&Save Storefront is free to download and use, except for an “Evergreen credit” feature, which enables retailers to promote products beyond the 30 day free period for 99 cents each. Other premium products will also likely be introduced. Features that are being used for Storefront may also be borrowed for other Wanderful apps, such as its sophisticated dashboards for the business and its local peers.

VP of Product Grace Chan told us that Wanderful is poised to serve consumers and three distinct customer groups: “national retailers,” “regional retailers” and local “SMB retailers.” The SMB portion is especially relevant to the company because it has local sales forces set to hit the streets via its local newspaper affiliates.

At the same time, however, Chan notes that SMB needs “may not be exactly the same” as those of regional and national retailers and brands. Local business owners, for instance, pay less attention to brand exposure. They mostly want to drive traffic to the store. They may be less interested in issuing coupons or discounts on a constant basis.

“These merchants like to make ‘offers’ to drive store traffic, not coupons,” said Chan. Or they might simply use the site to introduce a new collection of clothes, or focus on clearance goods. “‘Coupons’ make them think they are leaving money on the table,” she says.

Placing items on the App also takes some planning on the part of SMB retailers. It takes just eight seconds to build an offer, says Chan, but many SMBs aren’t ready to sit down and do that. That’s an area that requires more attention from SMBs, she says.

Wanderful Media COO Doug Kilponen is a featured speaker at BIA/Kelsey’s SMB Digital Marketing conference Sept. 22-24 in New Orleans. You may register here.

LevelUp Banks on Smart Watch Adoption for Payments

Phone-based digital payments haven’t really taken off – in part, because they aren’t much easier to use than credit/debt cards. You’ve still got to take them out of your pocket.
The notable exception is the phenomenon of My Starbucks Rewards loyalty program, which now has 10 million Starbucks customers actively using the mobile app, twice the number of a year ago.

But if “wearables” take off – i.e. smart watches and to a lesser extent, glasses – there could be rapid growth. In fact, payments are the most practical smartwatch feature (aside from telling the time.)

LevelUp leader Seth Priebatsch told Marketwatch that has always been his vision. The company currently provides an Android app, which automatically asks users if they’d like to pay by using the App when they are near favorite merchants.

“What we really always dreamed of was being the largest smartwatch payment network,” said Priebatsch, noting that LevelUp already claims 1.5 million smart phone users, who can pay at 14,000 locations. With wearables, the sky is the limit (perhaps).

Seth Preibatsch talks with Mark Fratrik at a recent BIA/Kelsey conference

Twitter Acquires CardSpring; Enters SMB Loyalty and Data Space

Twitter has made a bold move to go beyond advertising by adding performance marketing to its portfolio via the purchase of CardSpring, the San Francisco-based startup. The acquisition price has not been announced. CardSpring had raised $10 Million since its launch in 2011.

One of the big tech challenges in the payments space has been to remake the credit/debit card to a “digital receipt” product that can not only process sales, but also leverage specific SKU information, location and customer behavior to add coupons, loyalty points, events and other ewallet items. That’s the challenge that Netscape Vet Eckart Walther gave himself several years ago in launching CardSpring. The company has been positioned as a value add – some would say “middle man” — to both financial institutions and publishers providing marketing solutions for brands and SMBs.

CardSpring’s ambitious goal has been to enable merchants to write their own promotions; distribute them over CardSpring’s publisher network; and redeem and analyze the deal on their Point of Sales. The service’s “near” real-time analytics can show merchants where their redeemed promotions are coming from and what they bought.

CardSpring first got on the map via a 2012 partnership with payments leader First Data to provide check-in promotions at certain venues. More recently, it has also begun integrating with VeriFone’s POS network to enable developers to build their own card-linked services.

The launch of CardSpring Connect in September, 2013 – described as “Google Analytics for the retail world” was a milestone for the company. Foursquare and MOGL are among the most significant publishers providing CardSpring Connect to at least some of their merchant advertisers. Others include Thanx, Roximity, Moblico and OnStripe.

Twitter’s acquisition of CardSpring makes sense to us as Twitter positions itself as a real time marketing channel, and also a “common carrier” that can work widely across the board with key players in the space. This is consistent with CardSpring’s general positioning. The sale of CardSpring itself also suggests that it has been a difficult effort for an independent company to enlist partners to a middle man solution. It has also been difficult to differentiate itself among several other players providing similar features.

BIA/Kelsey looks deep at the SMB Loyalty and Data Space at Leading in Local: SMB Digital Marketing Sept. 22-24 in New Orleans, with such featured speakers as Groupon’s Dan Roarty, Perka’s Rob Bethge and Mercury Payment’s Randy Clark. You can register here.