Category Archives: Research

SFSW: Taking on Punch Cards with Loyalty Marketing

Loyalty and engagement programs are now flooding the local ecosystem. They see themselves as the next step up from daily deals. At the same time, they hope to be more effective than “buy 10 get one free punch cards,” according to execs from LevelUp, Swipely and Closely who were among htose who spoke at Street Fight Summit West in San Francisco.

Level Up’s John Valentine says results from his company’s loyalty program are already apparent. The discounts and loyalty points give consumers a better feeling of value, and in a review of 500 locations, have resulted in consumers paying seven percent more on average compared to regular tabs, he said.

Valentine acknowledges that the audience is self-selective. The fact that they have an iPhone suggests they’re more affluent. But it has “gone beyond the cool factor,” he says. “Using a phone for paying is becoming more normal.”

Mostly, however, Valentine says the race is on to gain a strong customer base. Level Up claims 200,000 users after just nine or ten months, and it is growing 20 percent month over month. It winds up paying $5-8 apiece for customer acquisition, he said. Even if the industry does a fast switch into NFC, and starts working more with entities such as Google Wallet, “ we don’t care,” Valentine added. “We will have a base of customers” and will be in a position of strength.

Swipely’s Angus Davis, meanwhile, suggests it is not going to be so easy getting that customer base. “Acquiring consumers is very difficult,” he says. Swipely’s approach is to build up customer loyalty, and after several months of experimentation, get them to develop restaurant specific loyalty programs.

Ultimately, it is all about fostering more repeat business for restaurants, says Davis. Sixty percent of their business comes from repeat business. Getting customer engagement and providing rich analytics will win merchant accounts over from the legacy of credit card accounts, “where bi-furcation and crust has built up.”

A different approach is being taken by Closely. CEO Perry Evans said that that the key is to give merchants “tools that get to the heart of loyalty.” Evans is especially intrigued by CardSpring, the new loyalty and promotions platform that allows consumers to opt-in to various deals and services. It puts incentives in front of consumers at a time that makes sense. “You want to give them the remote control so they can turn things on and off and decide what channel they want,” he said.

“Consumers are living their lives facedown into their phones and into their network,” said Evans. “Shopping decisions are becoming more live and based on a new combination of quality (review related) and price (putting incentive in front of consumers at time it makes sense). Give them the remote control to turn things on and off and give them a channel,” he said. That will beat Facebook. “The tools are not there. It centers only around the display ad category.”

Local Display vs. Search: Display Often Wins

Local display doesn’t get as much attention as search for SMBs, but we know that in many situations, it can complement search campaigns, or even produce better results. No one pushes harder on this than PaperG, which has developed a network of local media sites for its automated display solutions, and is now working with 20,000 SMBs. It has put together a great Infographic based on its research, coming up with some striking data.

Supporting the sense that display and search are complementary, PaperG notes that 35 percent of people who see a display ad will later search for the business. It also notes that display is cheaper on a cost per click basis that using radio or direct mail. The average CPM cost is $1.50, compared to $4.50 for radio, and $350 for direct mail.

The cost of a display ad for key verticals also runs substantially less than desktop or mobile search. Dentists, for instance, will pay a CPM of $2.58, compared to $6.13 for desktop search and $3.55 for mobile search.

“We’ve seen display work well when positioned as creating “brand awareness with performance upside,” says CEO Victor Wong in an email. “Certainly advertisers with multiple locations or that spend $1,000+ a month on print advertising benefit from greater brand awareness from online display at far cheaper costs than traditional channels. That said, we’ve now gotten targeted display to start working for single location businesses spending $500/month and with re-targeting, we can get results for as low as $100/month.”

Google Offers’ Nitin Mangtani Set to Keynote at ILM East

Here’s what we’ve been waiting to announce: Google Offers’ head Nitin Mangtani will join our great list of keynoters at ILM East March 26-28 in Boston. We believe Mangtani’s appearance marks one of the first public debuts of Google Offers, which is playing a major role in Google’s vital local strategy, along with Google Places, Google Maps and Zagat ratings and reviews.

Previously announced ILM East keynoters include Groupon Vice Chair +++ Ted Leonsis; American Express SVP of Social Media Leslie Berland; CityGrid Media CEO Jay Herratti; New York Times Research Ops VP Michael Zimbalist; and New York Magazine Digital GM Michael Silberman.

Mangtani joins Google Channel Sales BizDev Head Christine Merritt at ILM East. Merritt will provide Google’s perspective on its emergence in the local ecosystem, and the most effective way to work with Google as a partner.

The next wave of Deals is, in general, a key focus for us at ILM East, along with mobile local media, social local media, video local media, hyperlocal and locally targeted national advertising.

In addition to the keynotes from Google Offers and Groupon, we have a special Day 1 session dedicated to the next wave of deals, featuring EverSave’s Jere Doyle; Find n Save’s Christopher Tippie; Closely’s Perry Evans; and Boomtime’s Bill Bice. That session will be followed by a broader view of deals and ecommerce, which featured NextJump’s Charlie Kim; Cartera’s Jim Douglass; and Bundle.com’s Jaidev Shergill.

Other recent adds to the program include The Boston Globe’s Lisa DeSisto, who joins Boston.com VP of Digital Products Jeff Moriarty as a presenter; and MIT Sloan Associate Professor Catherine Tucker, who gives the low down on the effectiveness of local social media.

Before the show, we’re making a special trip to The Boston Globe’s R&D Lab (Limited Space, RSVP required). Or come to Andrew Shotland’s SEO for the Enterprise session, which also features SEO Expert Will Scott and Advance Digital Media VP John Denny. We’re looking forward to a great show.

Venture Capital
•David Hornik, Principal, August Capital
•Scott Maxwell, Senior Managing Director, OpenView

Mobile Local Media
• Walt Doyle, CEO, Where
• Doug McDonald, Director, dotMobi
• John Valentine, VP, East Coast, SCVNGR/LevelUp

Hyperlocal
• Merrill Brown, Principal, MMB Media
• Josh Fenton, CEO, GoLocal24
• Zohar Yardeni, CEO, Main Street Connect

Social Local Media
• Geoff Cramer, CEO, Social Made Simple
• Adam Japko, President, Digital Sherpa
• Jeff Moriarty, VP, Digital Products, Boston.com
• Mark Schmulen, GM, Social Media, Constant Contact

Video
• Juan Delgado, Managing Director, Americas, Perform
• John McIntyre, CEO, Pixelfish
• Randa Minkarah, SVP, Revenue, Fisher Communications

Deals and Promotional Ecosystem
• Bill Bice, CEO, BoomTime
• Jere Doyle, President and CEO, EverSave
• Perry Evans, CEO, Closely
• Christopher Tippie, CEO, FindNSave

Transactions
• Charlie Kim, CEO, NextJump
• Jim Douglass, EVP, Retail Advertising, Cartera Commerce
• Jaidev Shergill, CEO, Bundle

National/Brands
•Adam Epstein, President, AdMarketplace
•Pete Gombert,CEO, Balihoo
• Steve Sherfy, Local & Mobile Search, GroupMSearch
• Karl Siebrecht, President and CEO, AdReady

Elections 2012
• Andy Slater, VP, Digital Agency Sales, Katz 360

SMB Marketing
• Dave Galvan, President, Schedulicity
• Maria Kermath, Director, AT&T Ad Solutions
• Randy Parker, President, SMBApps
• Darren Waddell, EVP, Reply.com

Sign up now (and hint: reserve your room earlier rather than later).

CitiBank/Microsoft-Backed Bundle ‘Rates’ Restaurants, Others Via Credit Card Data

Yelp reviews are susceptible to a lot of noise – relatives and friends of a business, mischief makers, people without any perspective (or taste). In fact, most review sites – Trip Advisor, Zagat, etc. — are impacted by these factors.

Some sites have tried to get around this problem by using proxies for reviews. A few years ago, for instance, Grayboxx used “mentions” of a location as a proxy for reviews, assuming that the majority of mentions would be positive ones. That method, however, proved to be inaccurate and especially dicey in smaller markets. Other sites are experimenting with the use of check- ins and Tweets as review/rating substitutes.

Now comes Bundle, a new service with seed funding from CitiBank, Microsoft and Morningstar. Bundle, which is based in New York City, has built the algorithms to clean and sort “mentions” from 20 million + Citibank credit cards. While other services work with credit card companies for loyalty programs and recommendations, we haven’t seen companies that can actually apply algorithms to aggregated, anonymized credit card data.

Bundle scores are based on the popularity of a restaurant (i.e. number of visits); the number of repeat visits by customers to a restaurant; and the amount people are willing to pay when they eat at the restaurant. One assumes scoring can easily be applied to other categories as well.

CEO Jaidev Shergill tells us that the company started 2 ½ years ago as a money management site that would analyze statements for better budgeting practices, etc. But the company changed its business model to “solve problems for people using our differentiated data asset.”

“Local search and discovery have become bigger and the importance of accurate, relevant reviews is increasingly important. However, there is no way to tell whether the review is relevant to you,” says Shergill. Credit card data, coupled with aggregated demographic and behavioral data, clears the hurdle.

The service launched last December in New York and San Francisco, and nationwide on January 1. “We have two million merchants ‘rated,’” said Shergill. “That’s as many as Yelp. It will get richer as the months go by.” He also notes that unlike review sites, Bundle doesn’t need to go market-by-market for reviews.

Shergill acknowledges some limitations to Bundle’s methodology. If there is no data, there are no ratings. So that rules out cash-only places. The data also can’t distinguish how many diners are on the check, although individual prices can be estimated based on pattern analysis. But a quick look at my zip code (“92009”) showed fairly robust, accurate results.

Bundle CEO Jaidev Shergill is speaking at ILM East March 26-28 in Boston along with Next Jump CEO Charlie Kim and Cartera SVP Jim Douglass. Register here.


Bundle CEO and Founder Jaidev Shergill

The Super Lineup at ILM East March 26-28 (Boston)

ILM East is coming back to Boston March 26-28 with a lineup of do-ers and innovators that are transforming and re-defining 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 2 ½ day event includes a pre-conference 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 with Merrill Brown.)

KEYNOTES/KEYNOTE DISCUSSIONS
Ted Leonsis: Owner, Monumental Sports (Washington Capitals, Washington Wizards;) The 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’s 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 InsiderPages.
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, co-founder. MSNBC.com, Court TV
Jim Douglass, EVP, Cartera Commerce
Jere Doyle, CEO, EverSave
Walt Doyle, CEO, Where
Adam Japko, CEO, Digital Sherpa
Maria Kermath, Dir.,, 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
Andrew Shotland, Publisher, Local SEO Guide
Andy Slater, VP, Digital Agency Sales, Katz 360
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

New at ILM West: Google, Facebook, SoLoMo Day +++

ILM West is shaping up to be one of the great ones. Taking place Dec. 12-14 in downtown San Francisco, ILM West really reflects a sea change in local marketing from advertising to the new hybrid model of advertising and commerce (i.e. prepaid deals, reputation management, mobile app sales etc.).

We’ve made some big additions since our last update, starting with Google and Facebook. These add to the existing lineup, including our “rock stars” (Clear Channel CEO and industry legend Bob Pittman AllThingsD’s Kara Swisher, Media News Group/Journal Register CEO John Paton and Deseret Media and former Harvard Business School Professor Clark Gilbert), and major sessions on deals, offers, verticals and the whole spectrum of local trends.

We will pursue three unique angles on Google at ILM West:

1- The local efforts, under Marissa Mayer’s local team. Jeff Aguero, head of local marketing, will present on everything local, from Zagat, to Google Places, to the Big G’s new “Get Online” program for SMBs. These strategies have really developed since this summer.

2- The global reseller effort. Global Channels head Todd Rowe will engage in an in-depth conversation with BIA/Kelsey President Neal Polachek on all his efforts.

3- Google Mobile. Mobile and Local Search exec Surojit Chatterjee will provide insights into this critical area for Google as part of our All SoLoMo morning on Day 3.

We’re also going deep with Facebook at ILM West. Facebook’s new local leader Matt Idema is our afternoon keynote on Day 2, with a lot of new details and a progress report on the local and vertical strategies. On Day 1, we are also taking a special look at working with Facebook’s platform with execs from Trada, Oodle and Kenshoo Local/Social weighing in. Eager but not sure how to play with Facebook? You will be when ILM West is done.

The SoLoMo event on Day 3 itself is going to be quite the cornerstone for ILM West. Curated by the research teams from our Social Local Media and Mobile Local Media programs, SoLoMo features top line data; and indepth and fresh looks at SoLoMo implementations from leaders at Google, AT&T Interactive, Zaarly, PayPal, XAd, JiWire and AppStack (Steve Espinosa’s new project.)

You can see the full agenda here. And register here.

Remember: We are making a donation to the SF/Marin County Food Bank for all registrations that come in by Thanksgiving.

Review: ‘The Story So Far — What We Know About the Business of Digital Journalism’

Whenever one writes about the future of newspapers and other news organizations, a voice in the back of your head says: “they’ve tried that already and it didn’t work.” Fifteen years into the digital revolution, that’s the dilemma confronting the news industry as it once again revisits possible solutions. Thankfully, no one is giving up.

Paywalls. Video. Search. Hyperlocal. Mobile. All these things are extensively discussed in “The Story So Far: What We Know About The Business of Digital Journalism,” a new Columbia Journalism School report from Bill Grueskin, Ava Seave and Lucas Graves. The news-centric report doesn’t deal very much with our favorite subject — the transformation of the local marketplace, and the newspapers’ potential role in it. But there is plenty on the plate here.

While there are no ready answers – if we knew the answers, we would have provided them a long time ago — there are strong overviews on each subject. The real focus here is reconnecting to the real “fans” and “regulars” that may engage with a news product 50x more than the “occasionals” and “fly-bys” that make up the bulk of unique visitors. “When people talk about the size of an audience, that’s a sham,” the report quotes Scout Analytics’ Matt Shanahan.

One goal stressed in the report is building a direct relationship with fans to help push contextual advertising. “By producing relevant journalism, deploying data intelligently and relying on social media – not just search engines – to drive traffic, (publishers) can gather a more devoted and involved readership, one that advertisers will also prefer,” notes the authors.

Examiner.com, for instance, does very well when it encourages writes to match their output to social media, search…and advertising. Pet writers did very well last year matching coverage of dog adoption and pet shelters, pushing CPMs from $3-5 to $11 for P&G’s Iam’s Pet Food, a key Examiner sponsor.

In theory, other passion subjects do well too. High school sports especially stands out. The Dallas Morning News’ High School Game Time registers 14 pages a month compared to entertainment (2.5 pages), news (2.78 pages), weather (4.83 pages), and sports (7.71 pages). It also grosses $700K a year of new ad dollars, in partnership with local cable coverage. This year, it is also launching a $1.99 iPhone app., which represents new circulation revenue, along with heavy user paywalls, such as the one recently enacted by The New York Times.

That’s important. Like others, I’ve actually come to conclusion that the news organizations that have the market power to erect such pay walls are the ones that ultimately survive. For The Times, which has boosted per copy costs to $2 a day, circulation dollars have inched up to $683.4 million a year; just behind display advertising, which has fallen from $1.27 billion to $780.4 million. Next year, it doesn’t seem out of the question that circulation will surpass display.