ScoutMob, the two-and-a-half years old, mobile-centric deals company, has landed a new $3.5 Million round to develop its technology base and add more markets. It is currently in 13 cities and has over one million subscribers. The company, which had previously raised $1.2 Million, also announced a partnership with First Data and will work to implement its payments technologies, which serve over 50 percent of U.S. retail establishments.

Investors include AOL Ventures, Capitol Broadcasting (which has been very aggressive online), Cox Enterprises, Inc., Ben Lerer of Thrillist, and New Atlantic Ventures. At this point, these are purely investments and do not imply integration into Capitol, AOL,Thrillist and Cox properties such as its newspapers, TV stations, radio stations, cable systems, Kudzu and AutoTrader.

The company stands out from the pack in many ways. Mobile is becoming more important in deals – Groupon says that 40 percent of its deals are now viewed on mobile devices – but ScoutMob also leverages the geo-location technology found in mobile phones to “check in” when deals are redeemed. With this capability, it has built a merchant- friendly model charging a flat fee for leads of $3 or $4 per lead, instead of taking commissions, which may be 30-50 percent of voucher prices

Co-Founder Michael Tavani tells us that that he sees the ad hoc investment group as “pretty good validation of the media and payment space. We’ve always considered ourselves a mobile media company, but payment is the future of this space in a lot of ways.”

Tavani says the deal with First Data is not exclusive – “no payment solution gets you all the way there,” he says. But ScoutMob intends to build on top of First Data’s payment products, including the new First Data/CardSpring collaboration on an API that would enable merchants to easily add promotions and rewards to cards with a single swipe.

Some of the more advanced concepts implicit in that technology, however, may be “3-5 years away,” however, Tavani says. Within 60 days, ScoutMob hopes to add more immediate capabilities, including a “post-payment personalization network” that would enable rewards points for meals or miles for every purchase made within the network, he says.

Tavani also chides industry investors who are primarily West Coast based – his investors are East Coast based. “They refuse to believe that local scales,” he says. “They want to see millions of dollars and this isn’t millions of dollars (yet). But local decisions are made impulsively,” adds Tavani. “And having just 13 cities lets us be super-curated at the local level. We literally have an editor in each market. Building a brand is the big thing for us.”

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.”

Are Deals still being driven by shares, posts, likes and other social media features in an era of Groupon and Living Social Super Bowl ads? Yes, definitely, according to Second Street Media, which held a Webinar with The Washington Post last week to discuss social media and deals strategies.

Referrals, “like-gating” and brand building via social media are key to building up customer lists and pumping up sales volume, notes Second Street Director of Affiliate Success Matt Chaney. Social media has been an inherent part of deals success from the beginning,” he says. Getting consumers to “like” a deals site and follow them on Facebook helps work- around email fatigue – or at least, reinforces email offers.

Deal sites, however, need to follow up and provide something in return for the likes. Chaney cites Edison/Arbitron research showing that 58 percent of consumers expect something in return for a “like.”

NBC 7 in San Diego boosted their likes by 60 percent with a contest around “San Diego’s favorite Voice.” The St. Louis Post-Dispatch boosted their signups by 36 percent with a “Name the Rally Squirrel” contest. ABC 15 in Phoenix boosted its likes from 8,000 to 88,000 with a giveaway of Guitars featured on the CMA Awards.

Webinar special guest Molly Urciolo, Marketing Manager from The Washington Post, said The Post’s Capitol Deal site adds 1,000 likes each week. The Capitol Deal has done especially well with “Get Yours Free” deals in which customers are incented to push a certain number of sales by their friends –typically three –so they get a free one. Twelve percent of The Capitol Deal’s revenues come from “Get Yours Free.”

Urciolo likes to post deals on FaceBook the night before emails are sent out; or post exclusive deals for the FaceBook audience. She also takes the page seriously as a community, posting topical subjects on local sports teams, or events; and running contests, or sweepstakes. She also recommends adding new posts two times a day.

The June calendar is definitely filling in. It is the most active month in memory. I’ll be attending five events – three in San Francisco, two in San Diego. As Richard Rogers says: “June is bustin’ out all over.”

In San Francisco, we’ll be at StreetFight Summit West on June 5. Get a 20% discount if you use Code “BIAKELSEY20.” On June 18, we’ll be at Converge Labs Social-Loco event June 18. Our own event, Mobile Local Media, of course, is June 27.

At MLM, Mike Boland has put together a great one day program, uniquely focusing on the big issues surrounding mobile monetization (even more important and timely, perhaps, given Facebook’s revelation that it can’t do as much with mobile monetization as it had initially suggested).

MLM will feature VCs Stewart Alsop and David Hornik, and top speakers from Google, Yelp, eBay/PayPal, AT&T, SuperMedia, others. For us, this is where the action is. We’ll do a free webinar around the event on May 22. Register for the Webinar here.

Converge Lab’s Social-Loco event, meanwhile, considers how brands work within the social-local ecosystem – a valuable approach. The event will feature social-oriented speakers from Facebook, FourSquare, Nokia, HearSay, Waze and others. Converge is providing a 25% discount to the BIA/Kelsey community. Click here for a direct link to the discount registration.

I’ll also be at The San Diego Venture Summit June 6, featuring a discussion with Elevation’s Roger McNamee, and San Diego Interactive Day, which is a strong agency-oriented event June 15. I’ll look forward to seeing speakers from ExactTarget and others there.

That was quick. Yahoo’s radical shift to a new Commerce/ Marketplaces strategy – announced in mid April — has abruptly ended with the resignation of CEO and former PayPal head Scott Thompson, and SVP Sam Shrauger, his PayPal colleague who had been brought in last month to implement the plan.

As advocates of pursuing “non-advertising” revenues and closed loop marketplaces, I liked parts of the big data-heavy plan, although it was vague. For instance, unique content was being de-emphasized. I also liked that such a radical new vision would buy time with an impatient investor community. A couple of quarters, at least.

But Yahoo appears to be locked into several things that would have made it difficult to implement. It controls very few verticals on which to base a marketplaces plan. Autos, health care, real estate, travel, jobs, personals and shopping have been rented out to various companies, and the lengths of the contracts have not been disclosed.

It also wasn’t clear what Yahoo was going to do with Yahoo Merchant Solutions, which already provides many of these services. Nor was it clear who would sell the data efforts – a complex and strategic sale.

Explaining the basics of local and social marketing to clients and prospects is a tough task for companies, who might come off as patronizing. Why not give them a book?

A couple of years ago, Yodle CEO Court Cunningham wrote Local Online Advertising for Dummies, which did a great job explaining local advertiser options. Now, Constant Contact CEO Gail Goodman has done the same for social media. Goodman calls it: “Engagement Marketing: How Small Business Wins in a Socially Connected World.”

As industry analysts, we look to Goodman for all kinds of insights into SMBs at every level. This book is more geared towards the basics of the engagement marketing cycle — as a means of managing good word of mouth.

Goodman defines the cycle as providing the “Wow! Experience”; Enticing customers to stay in touch; and Engaging customers via social media. She emphasizes that SMBs really need to develop nuance when they are applying messaging via email, Facebook, Twitter, LinkedIn and G+. Each has different strengths.

While a lot of SMBs don’t think they really have much to say – a real problem in working with them for social media — Goodman provides insights into possible subjects, and case studies on how and when to apply social media techniques, including discussions, promotions, events, polls/surveys, shared information and news and announcements.

Groupon Rewards — “the easiest rewards program in the world” — rolled out nationally this week after tests in 36 markets that began in October. The product is Groupon’s answer to the emerging “transaction marketing” space that many believe will be the natural successor to the daily deals business. BIA/Kelsey Marketplaces has counted more than 24 vendors vying in this segment, with solutions ranging from Cartera to Swipely.

In Groupon’s model, consumers register a credit or debit card with Groupon. Every time they shop at a participating merchant, they can get points that can be applied to a Groupon at the merchant. Spending is automatically tracked, and reward vouchers are unlocked when goals are hit.

Merchants set reward terms, such as free deserts or spa treatments after a certain number of trips or dollars spent. They don’t need to participate in Groupon’s voucher business, but Groupon gets a commission based on the value of the reward when it is redeemed. As part of Rewards, merchants receive reports assessing the profitability of their Groupon campaigns.

A full report is being issued for our Marketplaces clients.

The local event calendars are filling up. A new event we’ll be attending is The Street Fight Summit West, which in June 5 at Bently Reserve in San Francisco, a classy location.

Street Fight head Laura Rich tells us that the event will be more tech-oriented than the company’s two day East Coast event, which takes place in late October, and is inevitably more media oriented. Both events ultimately aim to reflect the latest in hyperlocal developments.

Among the 30 speakers set to present are a number of our friends, including Topix CEO Chris Tolles, AOL Local SVP Mark Josephson, Where CEO Walt Doyle, Closely CEO Perry Evans, local pioneer Rick Blair, local and tech news pioneer Jon Weber, and Yelp Biz Dev leader Mike Ghaffry. There are also many companies that we are looking forward to learning about; and a Merger & Acquisition panel.

Readers can get a 20 % off rate using this code: BIAKELSEY20. Click here to register.

If anybody wonders whether the considerable “legs” of Facebook justifies a valuation now set for $83 Billion, have a listen to a terrific BIA/Kelsey Webinar on Facebook’s IPO, featuring Trada CEO Niel Robertson Wildfire CEO Victoria Ransom, and Plink Co-Founder Peter Vogel (and BIA/Kelsey analysts Jed Williams, Matt Booth and Jeanne Dattilo).

People have to understand that “Facebook is more than advertising,” said Trada’s Robertson. “It is a platform that takes people through the digital marketing funnel. It lets you acquire prospects and move them through the different stages,” he said.

It will be more of a challenge over time as Facebook moves its client relationships down scale from the giant brand companies to mid market brands and SMBs. Creative is really hard at those levels. But the basic idea of collecting fans is a winner all around. “It’s like collecting email addresses you can use over and over again,” he said. “Fans amplify your own message.”

Wildfire’s Ransom said that most of the trends for Facebook in social media are very positive. “There was a lot of anxiety from businesses about the Timeline,” she noted. But Wildfire studies show that Timeline has proved to be a smashing success, with a 22 percent jump in photo sharing, and a 90 percent jump in video sharing.

The challenge for Facebook is get beyond the sheer quantity of Facebook friends. “How do you engage them? Who are the right fans? The valuable fans?” asks Ransom. Facebook is getting better and better coming up with answers. And “there are more tools coming out.”

Plink’s Vogel, meanwhile, noted that Facebook watchers are looking for signs that the company will break out big in transactions and payments – an area enabled by its games-based Credits feature. It hasn’t happened yet – perhaps the Facebook’s 30 percent “tax” on transactions performed via credits.

Vogel, however, expressed confidence that the transactions and payments space will soon break out. The company is known for constant adjustment until “it gets things right,” he said.

If Facebook does get transactions and payments right, that “will be more than enough to justify its valuation,” added BIA/Kelsey’s Matt Booth. Facebook is “the biggest website that’s ever existed,” said Booth. Indeed, classifying it as a ‘website’ is misleading since the company encompasses so many things. And will encompass even more as it begins to buy a lot of companies to round out its offerings. “The entire U.S. display market won’t sustain Facebook,” he said.

BIA/Kelsey’s Jed Williams said one of those forms will inevitably be an ad network – an ‘AdSense’ for social,” he called it. Williams also predicted that Facebook will march quickly into the deals and offers space. It will introduce a new offers tool for managed service accounts such as Macy’s and extend down market, he predicted. Mobile is another mega-opportunity, although a risk as well since it hasn’t yet been monetized.

BIA/Kelsey’s Jeanne Dattilo, a BIA/Kelsey valuation expert, said signs were very good for Facebook’s valuation to hold up. She noted that Facebook’s EBITDA of 56 percent last year has got to be considered “really impressive.” Google was in the mid-30s; Yahoo was in the mid 20s.

Listen to a replay of the Webinar here:

Last November, major players in the newspaper industry bought Travidia as the cornerstone of a new shopping strategy. Travidia had been mostly known for its print to digital circular business, but it had recently repositioned itself with FindnSave, a new shopping platform that included digital circulars, along with inventory search via eBay’s Milo.com, and slots for deals, offers and coupons.

Investing newspapers represented local titles reaching 80 percent of the U.S. population. They included Advance Digital, A. H. Belo Corporation, Community Newspaper Holdings Inc., Cox Media Group, The E. W. Scripps Company, Gannett Co., Inc., GateHouse Media, Inc., Hearst Corporation, Lee Enterprises, MediaNews Group, The McClatchy Company, and The Washington Post Co.

Today, FindnSave announced the appointment of Ben T Smith IV to lead the effort as an outsider more wedded to consumer preferences then to newspaper sales requirements. Smith is the founder of Merchant Circle, and previously served as CEO and founder of Spoke.com, a LinkedIn-like social site for professionals.

In a discussion with BIA/Kelsey, Smith noted that FindnSave will have to be both a social experience, utilizing tablets and smart phones, as well as a “lean back” experience. “Shopping is not a lean forward and search” medium, he says. “It is a series of destinations.”

Smith says he plans to bring his experience as a Silicon Valley insider to bear, and in fact, will move the company’s headquarters from exurban Chico CA to the Valley. “Six or seven person teams make things happen,” he says. “We’ll have a series of teams, including mobile talent and people with a bunch of social DNA. There will also be a series of Apps addressing very specific demographics.”

Ultimately, FindnSave will serve “two constituencies – and newspapers aren’t one of them,” says Smith. “The constituencies are consumers and major advertisers. People looking for 49 cent chicken aren’t the same people who are flipping Nordstrom or Macy’s ads,” he observes.