Tag Archives: IdeaLab

ILM West Opening Keynote: IdeaLab’s Bill Gross

Mobile and local is in the middle of a “perfect storm” of opportunity that represents a “once in a generation opportunity,” noted Internet legend Bill Gross, CEO of IdealLab, who provided the opening keynote at ILM West today in Los Angeles. “There has never been a better time to be in mobile and local,” said Gross, one of the most prolific developers of new companies in Internet history, with four IPOs to his credit.

Gross said that new technologies typically take about a decade to become new paradigms. The movie camera, for instance, never become a hit until it was possible to edit movies. “Then a whole new story- telling capability came about. That is where we are with mobile and local.”

New technologies typically begin modestly. With mobile, “we’ve ported the billboard and the TV screen down to tiny proportions.” But so much more is possible. Mobile devices should be seen as “super computers on our bodies.” The operating paradigm is “Mobile = Local = Me.”

“Give me exactly what I want right now and what is relevant to me,” Gross said, about what consumers want. “Tell me exactly what I want.” Companies that provide these services are best suited to “conquest customers” with promotions and other lead generation tools. Small companies are especially well suited to compete because they are “more nimble. David slays Goliath.”

There is especially strong opportunity with mobile advertising, adds Gross. “Mobile advertising runs with the law of physics. ‘Nudging’ costs (of consumers) is magnitudes lower because their bodies are nearby,” he said. “Proximity equals probability.” Mobile ads performs 5-18 times better than banners.

Gross also notes dayparting is “super powerful” on mobile. All the attributes of mobile together suggest that mobile advertising will reach usage and expenditure parity with other advertising within five years, and could surpass other advertising within 10 years. Today, 13 percent of usage is mobile, but just one percent of ad spending is mobile.

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IdeaLab Launches Punchcard: ‘Loyalty, Not Transactions’

Companies are beginning to focus on loyalty programs for existing customers, rather than simply using deal a day to acquire new customers. Closely and WildFire App are both pursuing loyalty programs.

A loyalty startup that we like is “Punchcard,” which launches today. The brainchild of MerchEngines founder Andy Steuer, Punchcard is a smartphone app that provides a virtual facsimile of the loyalty cards that customers are familiar with from their favorite coffee or ice cream shop (Get 10 purchase stamps or punches, get one free).

Punchcard has gotten $1 million in seed funding from IdeaLab, and has hired five people, including local business development executive Dawn Padungian (Local.com, Charter Cable.)

Consumers sign up for Punchcard on a store-by-store basis, and receive a virtual punch after snapping a photo of their receipt. They can sign in via Facebook Connect.The service is currently available for iPhone users, and an Android version will launch in January.

Steuer tells us that the card’s virtual nature gives it real flexibility in terms of incentives, or what he terms “offer triggers.” After their 10th purchase, for instance, customers can get cash or credit. The amount would be based on their average spending. That’s the standard offer. Since it is all electronic, however, merchants could opt to provide rewards after a certain number of purchases in a given month, or after a certain amount is spent, etc.

The company will also be in a good position to leverage behavioral data, and make nearby recommendations. It doesn’t have to worry about email fatigue issues since all its communications are via the app, rather than email, notes Steuer.

To rev up the market, Punchcard is seeding the market in Southern California with a pre-populated list of 147,000 merchants. During the trial period, it will pay the credit for the merchant’s 11th sale (up to $30.). The company’s actual revenue model, however, is based on monthly fees ranging from $29 to $129. At launch, 40 companies are already paying.

If Punchcard is successful in winning five percent more local users, research from The Center for Retail Management shows that can translate to 60-100 percent gain in revenue, adds Steuer.

Tribune Invests in Perfect Market, a Long Tail Content Site

Demand Media, Associated Content and Examiner.com are each building up an arsenal of highly searchable “long tail” content. Now add Perfect Market to their ranks; a new company that seeks to provide the same “long tail” search optimized earnings capabilities to archival content from newspapers and other media.

The site just added a $6 million round lead by The Tribune Co. That adds to $15.6 million previously raised from Trinity Ventures, Rustic Canyon Partners and IdeaLab – each of which is also participating in the new round. The site originated with IdeaLab.

The company also announced an executive team that includes President and CEO Julie Schoenfeld; Chief Revenue Officer Tim Ruder, a longtime exec at Washington Post.com; and Chief Strategy Officer Rob Barrett, who was previously Executive VP for Tribune Interactive and head of LATimes.com.

CSO Rob Barrett will be joining Examiner.com CEO Rick Blair and Associated Content President Luke Beatty on our “aggregators” panel at Marketplaces 2010.