Stations See Gold In Couponing Craze

Google’s courtship of Groupon showed just how big digital daily deals can be
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Coupons, once the dog-eared province of elderly ladies slowing down the checkout lines at the grocery store, have become one of the hottest trends in local television. The digital version of the paper coupon—email deals from area vendors—is the latest frontier in the battle for the local marketing dollar. And TV stations, with their long-established multi-platform reach in the community, appear supremely poised to grab a piece of the action.

“We can win business because of our local media assets,” Joe Weir, general manager of Belo’s interactive division, says of the group’s new Yollar.com couponing initiative. “I think this is going to make a pretty big impact on our bottom line.”

If people weren’t familiar with Groupon before, the company hit countless radar screens when Google made a reported $5-$6 billion bid for the Chicagobased tech start-up in recent weeks. More astonishing than the size of the bid was that Groupon turned Google down.

Groupon did not return calls for comment. The company has local Web franchises all over the country, where users sign up to receive daily emails offering discounted goods and services from vendors, which split the sales revenue with Groupon. On Dec. 7, for example, New Yorkers saw an $88 ticket to the Broadway show La Bete offered for $44.

Groupon also partners with media outlets for a different batch of local bargains. Media General launches its first TV-station Groupon campaign Dec. 13 at WCMH Columbus; the company’s first Groupon partnership was with its Richmond Times-Dispatch newspaper in October.

WCMH built a registration list of about 3,000 users in early December and has been talking up “Columbus Deal of the Day—Powered by Groupon” in on-air promos, through keywords bought in Web search, and through social media. Unlike similar programs at some other stations, WCMH does not drive the sales effort for the couponing—Groupon does.

Traci Hogue, WCMH director of multimedia content and marketing, says the low cost of entry makes “Deal of the Day” a promising revenue source. “If our estimates are right, we think it has the potential to be six figures [annually],” Hogue says. “And that’s without hard costs.”

The coupon initiative hits local TV’s sweet spot. Stations are increasingly targeting local mom-andpops, which may not have the budget for TV spots, with an array of cheaper digital marketing options. Stations are also focused on dispersing content—and advertising— to users’ smartphones, and using social media such as Twitter to broaden their reach.

There’s a big pie to be carved up. By 2014, BIA/Kelsey forecasts that local ad revenue in the U.S. will hit $144.9 billion.

All of this plays into stations’ couponing craze. eDeals.com has arrangements with Post-Newsweek and Cordillera Communications, among others, to offer coupons on the stations’ sites. Some Meredith outlets have partnered with GreenLink and see the coupon program as an extension of their viewer loyalty programs. Jason Mullenix, director of sales at Meredith’s WGCL in Atlanta, envisions the couponing initiative banking around $250,000 in 2011—and likely climbing to seven figures in a few years.

“It’s not 10 big deals—it’s 200 small deals,” Mullenix says. “We’ll make a big pitch on it in 2011.”

Yollar.com debuted in November on Belo stations in Dallas, New Orleans and Norfolk, among others; the entire group aims to have the program running by the end of February. Some stations booked six figures’ worth of revenue from it within a few weeks of launch, says Weir.

The prime advantage of Yollar.com over the likes of Groupon and LivingSocial, Weir believes, is that a TV station can talk up the program to the masses on-air, on the Web, and on mobile. “Leveraging our assets allows us to have a big megaphone,” he says.

Another key is that stations have decades of equity baked into their brands, as opposed to a Web start-up that many have never heard of. Even if a local merchant fails to move a thousand coupons, many see the value of co-branding with a leading station.

CBS Television Stations has been playing up its local outlets’ goodwill in the months since the debut of CBS Local Offers, which hawks the likes of salon treatments and cooking lessons. “Small and medium-size businesses like it that a trusted brand like CBS has come forward to them,” says Ezra Kucharz, CBS Local Digital Media president, compared to forays from the less-established start-ups. Moreover, broadcasters appeal to a larger swath of the population, adds Kucharz, while the Web pure plays skew younger and more female.

It all spells considerable revenue potential for stations. “It’s an exciting time for local media,” says Kucharz. “A number of new revenue streams are really coming to life.”

E-mail comments to mmalone@nbmedia.com and follow him on Twitter: @StationBiz

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