The Rise of the Daily Deal: Bargains Drive Revenue for Publishers

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The White Label Option

Another way that publishers are getting into the daily deals business is by launching their own versions of the sites. In March, The New York Times announced plans for TimesLimited, a branded daily deals site that the paper was launching to tie in with its print and digital products. Other newspapers have followed suit, including the Minneapolis Star Tribune and The Boston Globe.

Responding to the interest in publisher-branded daily deals sites, a number of companies have developed white label daily deals platforms that allow publishers to build their own site and deals. One such company is Analog Analytics. Founded in 2008 in San Diego, the company's software platform caters to local publishers looking to get into the daily deals space. Analog Analytics' software lets publishers work with local merchants to create, promote, manage, and track their own deals. Its publishing clients include the Orange County Register, the San Diego Reader, Entercom Communications Corp., and Hearst Communications, Inc.

According to CEO Ken Kalb, the daily deals space is exploding because it represents a fundamental shift in the way publishers can bring in revenue. "The traditional advertising model has been up-ended," he says.

According to Kalb, traditional advertising revolves around a merchant creating content, buying media representation, and then waiting to see if consumers will purchase their products. "What's changed is that this has been completely reversed," he says. "For the first time, a publisher or broadcaster-and by that we mean traditional or modern-can create a deal of the day, the consumer purchases that daily deal, and both the publisher and the merchant advertiser get paid before they have to deliver products and services."

In addition to giving publishers the ability to create deals on their own, the platform gives publishers a link to Analog Analytics' own national deals network. "Let's say that you're a small newspaper ... and you don't have a daily deal for Thursday," says Kalb. "You can reach into the Analog network and source a deal that you like from a television station, a cable station, a radio station, [or] an alt-news weekly. And then you can use it as your own."

That syndication can flow the other direction too. If a publisher has an especially attractive deal, it can share that deal with other publishers on the network. Under Analog Analytics' model, deals syndicated over its network deliver 50% of their revenue to the merchant, 15% to the publisher that originally created the deal, 20% to the publisher selling the deal, and the remaining 15% to Analog Analytics itself.

Another company offering a white label daily deals platform is Tippr. Like Analog Analytics, Tippr provides a SaaS (software as a service) platform that lets publishers create their own daily deals brand and accompanying site. "We run the software, we provide the deals, we provide the creative, we provide any and all of the services that they need to be in the business," says Martin Tobias, the company's CEO.

Tippr's platform also lets publishers either create their own deals or source them from the company's private deals network. Tippr can also work with publishers to create their own branded mobile app for iOS platforms, giving their sites a mobile reach. The company has worked with a wide range of clients, including Belo Television Group, Spanish-language media company Univision Communications, Inc., and several NBC affiliates.

According to Tobias, daily deals represent a form of advertising revenue that publishers can turn to without alienating the audience through paywalls or increased traditional advertising. And unlike other forms of advertising, according to Tobias, there is genuine consumer demand for daily deals. "What daily deals are is another way to monetize their audience and monetize their traffic in a way that, actually, their audience might like and see as a value and as content, and not spam," says Tobias.

Tobias also points out that sites like Groupon have massive customer acquisition costs, whereas publishers already have their own existing audiences. "If [publishers] add that daily deal functionality to their existing business and to their existing audience, their customer acquisition cost is zero," he says.
"What you need to be successful in the daily deal business is three things," Tobias continues. "You need an audience, you need technology that allows you to sell and send deals, and you need deals. What publishers have, right now, is an audience. And they don't have technology or deals. But they can partner with someone like us to provide technology and deals to their existing audience."

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