Peter Krasilovsky's

Local Onliner

Mar 1
2012

First Data’s Sarah Owens: Digital Receipts are ‘Social Currency’

The giants of American commerce are now diving into the “local” space. American Express, MasterCard, Citibank are just some of the big brands diving into local via SMB and national retailer relationships. FirstData, which processes secure transactions for 7,000 financial and more than four million U.S. merchants – 50 percent of U.S. merchants — has now jumped in as well.

As we noted in a blog post earlier this week, First Data has announced a JV with CardSpring that will offer a smart commerce platform to local merchants via local online and mobile media publishers, such as city guides or Yellow Pages.

Sarah Owen, FirstData’s VP of Personalized Marketing and Loyalty, notes that it is an important extension for First Data. The new technology provides all kinds of promotional linkages to transactions (deals, coupons, gift cards, loyalty points etc.) That means that “financial institutions become publishers as well,” she says. “It’s all about digital receipts. That’s the social currency.”

Owen takes issue with the idea – ok, my idea –that the CardSpring platform may be seen as an alternative to electronic (mobile) wallets. “I absolutely see a need for a mobile wallet….to make lives easier,” she says. FirstData’s intentions are “to make mobile wallets more robust” and “proliferate faster” by providing a universal platform that doesn’t need any new hardware.

And she assures it would be easy to do. Some doubts were raised about consumers proactively going on the Web to sign up for Apps, but Owen says Apps could also be pushed out to people on their phones and tablets. It is a simple affirmation. Card Swipe technology is also in the works, but isn’t ready yet.

Owen also suggests that OfferWise fits in well with branded bank and credit card and deals services since it is “not consumer facing.” OfferWise, for instance, could be used by Google Wallet to “expand its functionality,” she says. “We have a robust redemption platform.”

Categories: Deals, Sales Channels, Shopping/Transactions

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Feb 29
2012

European Deals Market ‘Catching Up,’ Says Nimble’s Prashant Nedungadi

Until recently, the European deal market was basically a year behind the U.S. But NimbleCommerce CEO Prashant Nedungadi argues that “they are beginning to catch up.” Nedungadi says they’ve graduated to more advanced platforms, and are more committed to driving revenue.

Some European newspaper publishers, for instance, are outpacing local Groupon and Living Social results. European consumers have also been proven to be quite similar to Americans in deal buying habits.

Nimble’s work with European local media publishers now accounts for 35 percent of its business. Nimble’s client roster includes the Sweetdeal sites for MeCom, the giant European media conglomerate with operations in The Netherlands, Denmark, Poland and Sweden. MeCom has 1.2 million subscribers and 40 paid titles. Nimble also has partnerships with four of the U.K.’s five top newspaper concerns: News International, The Guardian, Trinity Mirror and Johnson Newspapers.

In general, Nedungadi reports that Nimble is profitable, grossing $100 million worth of deals last year. He is projecting a gross of $250-$300 million for 2012 – a projection enhanced today by the announcement that Nimble will power the Digital First newspapers (formerly Media News Group and Journal-Register) .

While there has been a big shakeout in the deals space, Nedungadi feels there is still new opportunity in the space. Deals are “a really important platform,” alongside coupons and other advertising, he emphasizes.

One opportunity is for smaller sites to verticalize, in part by doing deals with larger publishers. The challenge is “to get publishers to work with each other. The platform has to evolve into a network,” he says. A second opportunity is to more effectively target email addresses.

Categories: Deals, Money, Newspapers

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Feb 28
2012

Reply’s MerchantCircle Relaunches; Heavier Consumer Focus, Less on Listings

MerchantCircle, which was sold to Reply.com in May 2011, continues to rethink the traditional Yellow Pages small business model. The company today unveils a web site that is less oriented towards directory listings, and more oriented – it hopes — towards winning more consumer traffic, generating more SMB leads, and better monetization.

While the new platform has been launched on the core Merchant Circle site, it will soon be available on a white label basis for other publishers, such as Internet Yellow Pages and City Guides. A key driver of the move has been the company’s desire to leverage a larger consumer base for Reply’s “clicks or leads” model.

MerchantCircle has actually been moving towards a “social commerce” model for some time, in recent years adding Answers, community content and other features. But EVP Darren Waddell tells us that the site has now more clearly moved away from an IYP “silo” model, where consumers basically encounter a business and its merchant page.

“It is not about the merchant value proposition,” says Waddell. “It is about helping consumers to connect with local business owners in a meaningful way.” Consumers will be able to seek requests for quote, see pictures – which Waddell stresses are “really important”; build deals; enter business subscriptions; and access the company’s trove of six million+ pieces of user generated content. Merchants, meanwhile, move up from a simple IYP-like enhanced listing to Reply’s Marketplace.

“We really blew out the entire MerchantCircle front-end,” Waddell adds. “We’ve developed an entirely new look and feel.” In beta tests involving up to 10 percent of its user base, the new, improved MerchantCircle has yielded a 2.5 X improvement in consumer engagement.

Being consumer friendly has also required Merchant Circle to crack down on merchants that were aggressively gaming the site and hurting its credibility. “It was a small but loud minority,” notes Waddell. “Algorithmically, we’ve really cracked down on people gaming the system.”

Initially, some of its merchants have not been pleased with the changes, which put most non-featured businesses below the fold. Waddell notes that some merchants on the site’s forums have been “really upset,” but MerchantCircle is sticking with it’s more balanced approach.

In the long-run, the company believes that they’ll realize they’re better off with the consumer-friendly features. In the meantime, Waddell suggests that Merchant Circle has hit an effective balance , with 1.2 million active merchants being able to respond to a strong volume of consumer requests – a capability that he believes is unmatched in the industry.

Waddell appears at ILM East March 26-28 in Boston on our all-star “Local Business Success: Picking Winners” session, along with AT&T’s Maria Kermath, Schedulicity’s Dave Galvan and SMBApps’ Randy Parker . Register here.

Categories: Misc, Social Media, Yellow Pages

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Feb 28
2012

CardSpring’s Alternative to the Electronic Wallet

It is a given in some circles that the next era of promotions will be driven by electronic wallets that perform transactions, manage deals and coupons, and target and engage loyal consumers. Google, American Express, MasterCard, Living Social, Groupon, AT&T, Microsoft and Square are just some of the companies that are purported to be developing some type of electronic wallet.

The result, however, may be a fragmented market where no standard takes hold. A $5 FourSquare rebate from American Express is a nice offer, but leaves out MasterCard holders. Moreover, while the e-wallets concepts can work for online deals, where do they leave the offline deals that make up the bulk of transactions today?

Those are the questions raised by CardSpring, a venture-funded firm that seeks to build a common payment and loyalty platform. Cardspring was launched 18 months ago by several Silicon Valley platform vets, and has received $10 million from Access and Greylock, among others.

Today, CardSpring announced a white label pact with First Data, the giant financial company which processes transactions for roughly half of U.S. merchants. The First Data “OfferWise” solution will link offers to major credit association brands, PIN and signature debit cards. Major reseller affiliations with SMB ad outlets such as Yellow Pages are in development.

The company’s basic idea is to make it easy for retailers to instantly add their own promotions and loyalty programs to any transaction via payment terminals or smartphone. Consumers need to self-activate individual apps on their cards via the Web (not always easy) or via swipes at an in-store terminal (easier.)

CEO and Founder Eckart Walther told BIA Kelsey that the transactions companies are experts at selling batch driven and inflexible payment services. But they are limited. In the mid -990s, he notes that the industry went though a number of failed first generation smart payment services, such as DigiCash and CyberCash. He suggests that the addition of data services – advertising — makes CardSpring’s smart payment services more scalable.

Walther’s goal is to add a “Payment Rail” to SMBs indirectly via small business publishers, such as Yelp or a Yellow Pages company. Working with CardSpring, a company like Yelp can provide a plumber with a real time ability to get cash back, provide an upsell or refer friends.

Categories: Mobile, Shopping/Transactions

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Feb 22
2012

New at ILM East: Google, AOL, Boston Globe +++

The ILM East program is shaping up as our favorite program in years, with cutting-edge BIA/Kelsey research and speakers. The event is teeming with new revenue and strategic opportunities for Internet and mobile advertising and commerce. The ideas keep coming and coming.

Keynotes include Groupon Vice Chair Ted Leonsis, American Express SVP Leslie Berland, CityGrid Media CEO Jay Herratti, The New York Times‘ research head Michael Zimbalist and New York Magazine Digital GM Michael Silberman.

What we’ve just added is a special session with Christine Merritt, the head of business development for Google’s Channel Sales team. Merritt will share Google’s perspective on its place in the local ecosystem, and effective partnership ideas. There’s always really good Q&A with the Google sessions, and why not? It impacts everyone in a major way.

Other new adds includes a Boston welcome from Boston Globe VP of Advertising Lisa Desisto; and a special solo session with AOL Senior VP Mark Josephson, who will provide insights into the wide range of AOL local activities – not “just” Patch, but Local Voices and other major initiatives. We’ve also got interviews lined up with two top VCs: David Hornik, August Capital, and Scott Maxwell, Open View. Follow the money, indeed!

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
• 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 for earlier bird rates (and hint: reserve your room earlier rather than later).

Categories: Conferences, Google

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Feb 21
2012

Cartera: Local SMBs ‘Key’ to Growth of Loyalty Programs

Local businesses don’t have their own loyalty programs but can now benefit from tapping into bank programs. “Local is the key to our strategy,” says Jim Douglass, EVP at Cartera, a Lexington, Mass. company which manages loyalty programs for many top banks and credit card companies. Douglass sees five million SMBs potentially seeking to extend their customer relationship via various bank loyalty programs.

“In our portfolio,” Douglass notes, “we have cash back, miles cards, points cards. Consumers say: ‘This is the currency I want to collect. I want to go on a trip for free, or save points for services I want to get.”

For their part, SMBs not only get loyalty rewards, but they also get useful data. “We can show incremental shoppers, prove ROI for new shoppers; and move their behavior,” says Douglass. “We can tell retailers who has shopped, and not shopped.”

The biggest chunk of Cartera’s business still comes from national, large retailers. “We have a national team focusing on large retailers. There are 750 (retailers) doing $100 million in revenues,” he says. One of Cartera’s best white labeled relationships, for example, is with Cabelas, a Midwest outdoor sporting goods company. “They have a passionate base of card holders,” he says.

But the potential volume of local SMBs make them strategically important for Cartera’s next wave of growth. Douglass notes that the company is building partnerships with companies that have relationships with local retailers, such as Yellow Pages and merchant processors. With loyalty, Douglass notes that “we have a better mousetrap. We are a classic substitute.”

Cartera SVP Jim Douglass is speaking on The Shift to Interactive Local Commerce panel at ILM East, along with Charlie Kim of Next Jump and Jaidev Shergill of Bundle. Register here.

Categories: Deals, Sales Channels, Shopping/Transactions

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Feb 16
2012

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

Categories: Research, Social Media

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