Groupon Re-thinks its Ambitious SMB Platform

Groupon is apparently thinking hard about dismantling its ambitious SMB platform, and refocusing on its core strengths in daily deals, goods and travel. Reports have come out saying that Groupon is offering to sell its Breadcrumb POS platform, which had been rebranded as Gnome; and also sell its interest in Serviz, a Local On Demand Economy home services company that has been developed as ClubLocal by former ReachLocal CEO Zorik Gordon. Groupon has also been in talks to cash in on T-Mon, the South Korean ecommerce service that it bought last year from Living Social for $260 Million, but could now been seen as a cash cow that could allow Groupon to invest in other areas.

According to Bloomberg Business Week, Piper Jaffray analyst Gene Munster thinks that the Breadcrumb part of Gnome could fetch $100 million, and that Groupon’s stake in Serviz could be worth $30 million. T-Mon, which is seen as an ecommerce winner in Asia, could ultimately get as much as $800 million. Groupon’s apparent decision to explore the sale of Gnome is the most interesting to us. A report in Re-Code said that executives casually offered to sell at least a portion of it to Square.

In developing Gnome, which has been built on top of its June 2012 purchase of Breadcrumb, Groupon assessed its widespread, international merchant base and concluded it could reinforce and upsell that base and position itself as a global ecommerce giant. It would do so via a compelling package of highly discounted point of sales devices, payment services merchant analytics and strategically targeted offers to customers.

The investment in Serviz – which gave the greenlight to Gordon’s team to continue developing a service that was not going to go further at ReachLocal – was also seen as strategic as Groupon looked for more and more ways to connect and broaden the local marketplaces. Coincidentallly, it looks like Groupon is giving up on having a piece of the home services market just as Amazon and Google are diving in.

Is Groupon giving up too early? We’ve been impressed with the capabilities of the Gnome platform and the strategic vision behind it. The Serviz product is also impressive, although perhaps too rarified for Groupon, as it aims for higher ticket repairs and services. And separately, T-Mon is going to require enormous investments to grow and maintain its market share in a business that has come to not only include deals but also ecommerce, fashion and services.

The bottom line here, however, is that Groupon may have concluded that its merchant base sees it as a 3rd, 4th or 5th choice for this kind of activity – rather than as a substitute for blue chip and diverse players such as American Express, VeriFone, First Data and Salesforce . While Groupon can always work to keep repositioning itself, it currently seems most secure as a provider of discounted goods and deals that it continues to mold into an always on marketplace.

A Look at Amazon’s Entry Into Home Services

Amazon Home Services has been in beta since November and has now formally launched. The service will take on Angie’s List, Home Advisor and a slew of new players in the increasingly crowded home services space (i.e. Pro,com, Serviz, Home Depot’s Red Beacon, Thumbtack and apparently, Google.)

VP Pete Faricy told The New York Times that it now covers more than 700 types of services and has already entertained 2.4 million “serve offers.” A look at Amazon’s map identifies four highly developed core markets (Seattle, San Francisco, New York and Los Angeles) and 36 moderately developed markets (and many more lightly-developed markets.)

All of Amazon’s “hand picked” pros that hope to work with Amazon must undergo background checks, which will cost $50 (plus $40 per employee); have appropriate licenses, and carry insurance. All listings will also feature Yelp reviews as well. Pros will pay Amazon 20 percent for services that cost $1000 or less, and 15 percent above that amount, as well as monthly subscription fees — although those fees are waived through June 2015. The 20 percent fees are comprised of 15 percent service platform fees, and 5 percent transaction fees. The fees and requirements are fairly standard in the industry.

What Amazon brings to the table is its brand and especially, a high volume of consumers. It is currently targeting its customers with an offer of a $20 gift card for first time users. It also has millions of merchant and consumer credit cards in its profiles, which can be a major advantage. Longer term, it has the potential to leverage its Local Offers business, which has been including service offers for some time. Amazon doesn’t, however, have an instant collection of merchants that are pre-inclined to work with it for marketing purposes.

It also doesn’t have the behavioral intelligence that informs its retail services,or its own reviews – although Yelp’s reviews will help it out here. There are always thoughts that Amazon would want to try to buy a service such as Angie’s List or Home Advisor to complement its efforts in these areas.

On the surface, it seems like a stretch for Amazon to enter home services. It could, of course, be an initial failure, like Amazon’s Fire Phone. (or a long term success, like Kindle and Amazon Web Services). But if you are thinking big…services are a key part of the local economy that Amazon is tackling for sales, leads, payments, hosting and other areas.

We note that many of the competitors in the space leverage the new models of Uber-like, Local On Demand Economy that BIA/Kelsey is focusing on at our June 12 NOW event. There is certainly plenty of potential. As Home Depot Silicon Valley head Anthony Roddio noted at our ILM 2014 event in December, “The market is ripe but no one is there yet.” Some estimates have penetration in this segment at under 10 percent.

Thanx CEO Zach Goldstein: ‘Let’s Call Them Card-Linked Services, Not Offers’

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The BIA/Kelsey “Status and Review of Card-Linked Offers, 2015” report, which is based on in-depth interviews with industry leaders, has generated a lot of interest among the various shareholders of card-linked offers and non-advertising marketing solutions (including financial institutions, tech vendors and publishers).

We’re especially interested in the feedback from Thanx CEO Zach Goldstein, who tells us he’d like to see the Card Linked Offer space rebranded as “Card-Linked Services.” The main reason? “There is a lot of value that can be delivered to a consumer by linking their card without receiving and fulfilling an offer,” he says. “In our case, for instance, easier reward accrual for loyalty programs.”

In Goldstein’s view, the report — which is bullish on momentum in the card-linked offer space — could be even more bullish. He’s seeing conversion rates for Thanx campaigns ranging from 22 percent into the low-30 percent range. This is well above the 3 percent to 12 percent conversion rates that we cited as the norm.

Goldstein also takes issue with the report’s conclusion that cashback is the preferred reward type — something that is widely assumed by the financial institutions and related ecosystem, but sometimes disputed by players that focus more on loyalty.

“Many of our merchants would rather sacrifice margin than top-line revenue,” he says. “We actually see far more businesses who like to use card-linked for the ‘accrual’ portion of the experience (tracking spending to qualify) but redeem rewards through a more traditional channel or through mobile.” For more of Goldstein’s views on card linking, click here.

The CardLinx Association, which partnered with us on the report, is going deep on card-linked offers with a great lineup of speakers in New York April 28. We hope to see you there.

LogMyCalls Acquires CallSource’s Media and Publishing Division

Marking an end of an era, CallSource has sold its media and publishing division to LogMyCalls (formerly ContactPoint.) The sale reflects several things about the evolution of the call management space – which remains absolutely vital to the local and SMB business communities.

First, it suggests that CallSource’s customer list, which includes many key Yellow Pages and vertical companies, remains deeply engaged in call tracking and is highly valued. It also suggests that CallSource’s principal business of tracking calls has begun to shift to conversation analytics and targeted leads.

This is where LogMy Calls comes in. The combination of the two companies is expected to reach new customers for LogMyCalls, and provide a lot of additional value for customers of both.

CallSource VP Geoffry Infeld, in a call with BIA/Kelsey, discussed the changing dynamics of the industry. “Call Source is all people power and crowd sourcing,” noted Infeld. The company, in its 25 year history, has come a long way from its roots as a performance training company which then focused on call tracking and finally all the things provided by a modern call center.

The key to the industry’s future success, however, is tied around being a solution provider to enterprise companies, said Infeld. “The data from voice calls must run parallel to the data that Google can capture and analyze” on the Web.”

LogMyCalls President and Founder Jeremiah Wilson elaborated further. “This space needs to get as much information from phone calls as it gets from emails and websites,” Wilson told us. ”The industry needs to focus on data, not call tracking.”

Wilson noted that the data around phone calls “keeps getting bigger.” And it is about much more than pay per call – although PPC does illustrate that phone calls drive a lot of value. Really, “It is really about big data,” said Wilson. With advanced calling analytics, companies can invest in call quality and strategy, rather than just calls” he said.

At BIA/Kelsey NATIONAL: Top Takeaways

The third version of BIA/Kelsey NATIONAL just wrapped last week in Dallas, following our 2014 NATIONAL event in Atlanta and our 2013 event in Boston. Taking twists and turns as it develops, the topic of “national marketing, local targeting” is one that increasingly relies on digital, which represents a significant share of the $67.1 billion in spending that is forecast for national local by 2019.

Thanks very much to our 64 speakers, hundreds of attendees, sponsors and GoLocal Award finalists for participating with us in Dallas. What are you takeaways from Bia/Kelsey NATIONAL, Ver. 3? Here’s my personal top takeaways:

1. The time is now for National Local, but the industry still needs to catch up. BizHive’s Dave Walker, in a great keynote, cited CMO Council research noting that 57 of CMOs say that local programs are important, but only seven percent of CMOs have a successful program in place.

2. It is critical to leverage social media. The average Facebook user is on 41 minutes day, and national brands have an opportunity to use Facebook, Twitter, Pinterest, Yelp and other social media to develop real scale for local franchises. As U-Haul’s Elnora Cunningham noted, U Haul can give its dealer network direct feedback from over five million reviews. Given all this, SpeakEasy CEO Mike Orren tweets: “So no, Mr. Client, we don’t recommend abandoning the platform.”

3. ‘Closing the Loop’ on attributed marketing should be highly prioritized. As Geary’s Karen Kovaleski noted, marketers need to think across media and organizational boundaries to bring customers to a transaction decision. Google, for one, is actively working on this capability. Google’s Brendon Kraham highlighted a PetSmart case study in which 10-18 percent of search clicks can be tracked back to instore visits.

4. The rise of programmatic sales represents a breakthrough for National Local. Automated selling represents a break-through that local needs to reach users on a targeted, hyperlocal basis. But it needs to be carefully handled. As Sightly’s John McIntyre noted during Rick Ducey’s Programmatic SuperForum: “In the end, programmatic is stupid. It is a (simply) a go-get, go-fetch tool.”

5. All National Local strategies must focus on optimizing Mobile’s micro moments. Just as broadcasters have focused on day parts for different types of marketing, national local marketers must really begin thinking about the different types of activities that people are doing when they look at their mobile phone. Google says that people are looking at Android phones 150 x a day.

6. Platforms can bring local franchisees in line, and also liberate them. As Christian Ward from Yext notes, brands are “schizophrenic” from top to bottom, with the national brand representing one thing, and each local outlet representing something else. Getting “local stars to act like choir boys” is one goal of the platform companies.

7. Going deep on vertical expertise is essential. It isn’t one size fits all in national local. Richards Group’s Rod Ulrich noted that “consultative sales rule,” and that his agency has added a library of vertical materials and a librarian to assist in the effort.

8. The sales structure for National Local must be carefully tailored. The old days of sending someone to Detroit or New York twice a year doesn’t make sense anymore. The Dallas Morning News, for instance, told us that its team of 10 national reps is now down to 2. But national touchpoints remains even more vital, via timely contacts, use of networks and other capabilities.

9. A real role remains for local media and directories. Local newspapers and Yellow Pages still play a real role in targeting locally – and regionally. But it is important to understand and tailor those strengths. The national usage of The Dallas News, for instance, is more than half driven by Dallas Cowboys.

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GOLOCAL Awards Finalists Set for BIA/Kelsey NATIONAL Next Week


When we started the GOLOCAL Awards last year at our Atlanta NATIONAL show, we felt there was a real gap in awareness about the great local campaigns by national and regional brands. The diversity and quality of what was entered in the Awards was incredible.

Now we are wrapping up our Second Edition. Our seven independent judges have just completed their work, and the finalists in three key areas — Innovation, Sales/Revenue and Strategic Use of Digital Marketing — will be highlighted at the start of Day 3 of our Dallas NATIONAL show next week. The finalists include:

Innovation

  • “Sears’ Online Social Review Innovation” — Yext
  • “Local Video Ad Campaigns Deliver Results for Wendy’s” — Sightly

Sales/Revenue

  • “Bill Luke Dealership Increases RAM Truck Sales” — Haystak Digital Marketing

Strategic Use of Digital Marketing

  • “Lead Generation & Social Audience Engagement” — G/O Digital
  • “PowerChord STIHL Southeast First Watch YouTube” — PowerChord on behalf of STIHL
  • “ShopRite Store Opening Promotion via Bucks Happening” — Happenings Media
  • “UMB Bank” — Placeable
  • “Just Said Yes Campaign” — WeddingWire
  • “Inspiring a Mobile Audience to Take Action” — xAd + Goodwill Industries & Ad Council
  • “Nationwide Just Say YES — Digital Marketing for Maytag” — Nationwide Marketing Group, Netsertive and Maytag by Whirlpool

Sponsoring the Awards is Where2GetIt, which is one of our leading sources and advisors in NATIONAL, working with over 500 brands. CEO Manish Patel tells us that “The finalists represent the tremendous talent and diversity we are seeing every day in our work with national brands in this incredibly fast-growing space.” Come to the NATIONAL event in Dallas, and cheer ‘em on! The top three winners will be announced at the end of the session.

UBL, Advice Interactive Group to Merge: SEO + Syndicated Listings


UBL, a publicly-owned syndicator of updated business listings and profiles, is merging with The Advice Interactive Group, a fast-growing search marketing firm that has evolved into a full service agency. The merged company is slated to earn nearly $20 million in 2015, and is refashioning itself as a peer to companies such as Go Daddy, ReachLocal, Local.com, Yext and Factual that are either public or have attracted attention on Wall Street.

UBL will provide stock and cash in consideration of the merger. While both companies initially keep their own identities, they intend to work towards an integration of operations and a single brand. Both companies earned approximately $8 million apiece in 2014. Charlotte-based UBL has 38 employees while Advice Interactive has 85 employees in Dallas and Newport Beach.

Billed as a “combination of equals,” UBL CEO Doyal Bryant will be the new entity’s CEO, while Advice CEO Bernadette Coleman will run marketing, tech and operations. Bryant notes that the deal allows UBL to focus on a growing global market in syndicated business profiles; an area that has gone beyond search engines to also include mobile apps, GPS search and online maps, video platforms, marketing platforms and social networks. UBL currently has operations in Canada, the UK, Australia and New Zealand and says it will soon add four more countries.

Advice, meanwhile, is set to leverage UBL’s listings/video and mobile-rich database, and provide a one stop for a wide range of activities for its business and enterprise customers. These include local search, PPC & SEM, reputation management, SEO, Web design, content marketing and social media. The majority of Advice’s customers come from local channel partners; its strength and technology platform are expected to enhance UBL’s current efforts in the space, which are not a main emphasis.

The merger gives Advice “a major edge over everyone in the (SEO) space,” says Coleman. As marketing moves to hyperlocal capabilities, it isn’t just about search anymore, she emphasizes. “Clients need to have data syndication; optimized profiles; and customized linking and meta data – all in one place.”

Advice Interactive Group CEO Bernadette Coleman is speaking at BIA/Kelsey NATIONAL, which takes place March 25-27 in Dallas.