April 8, 2011
Next week, I will be on two great panels at two different Montreal conferences. One discussing “social shopping” and the other one talking about “social media for businesses”.
“Virage web social pour une entreprise : une nécessité?”, Thursday April 14, Rendez-Vous du Web 2011 (organized by Infopresse).
Don’t hesitate to ping me if you want to connect!
March 23, 2011
(picture by Kenny Herman)
Jim Moran, Cofounder at Yipit, took the stage this morning to share with us many interesting quantitative data points about the daily deals industry.
About the daily deals market:
- It has low barriers to entry. Yipit has identified 400+ daily deal sites in North America
- That number has been increasing rapidly because of white-label technology platform providers and the entrance of major media companies in the space.
- The market has high barriers to scale though. You need to scale sales, geographies, salespeople, number of deals, media buying (to advertise your service), subscribers, offer deal personalization and increase conversion in order to truly scale. Jim showed a great slide showing the “virtuous cycle of daily deals”.
- Looking at a slide that presented the types of stakeholders in the ecosystem, you could clearly see that the next big opportunity is “Merchant Agencies”, that would negotiate deals across providers.
In the top 20 markets (February 2011 data):
- Groupon had $39M in revenues (#1 player)
- Livingsocial: almost $12M in revenues (#2 player)
Top daily deal verticals by revenue:
- Hair removal
- Outdoor adventures
- Automotive services
From a merchant economics point of view, Yipit found:
- A breakage rate smaller or equal to 20% (this is the percentage of deals unredeemed)
- That deals became profitable for merchants if they were able to retain 19% of coupon buyers
- High merchant satisfaction: 93% said they would use a daily deal site for another promotion
- Some ad spend shifting: 43% say we’re reducing other advertising spend after running daily deal.
His biggest surprise from the data they collected: the gap between Groupon and LivingSocial seems to be narrowing. You can review his complete presentation here.
Following Jim Moran’s presentation, we heard from Eric Eichmann, COO at LivingSocial. Here are the interesting tidbits from his keynote:
- LivingSocial describe themselves as “the local commerce expert helping people discover new experiences in their neighborhood”
- Daily offers is a pivot for LivingSocial (like Groupon). They used to be a Facebook applications developer.
- Their pillars of success are: local, mobile, social and commerce
- They like to target neighborhoods as opposed to cities
- They launched “Instant deals” in their mobile app. They are real-time mobile deals.
- LivingSocial today: 12 countries, 230 markets, 24 million members, 1200 employees
March 23, 2011
On Monday, I probably watched the best keynote I’ve ever seen at BIA/Kelsey conferences. David Weinberger, co-author of The Cluetrain Manifesto, author of Everything is Miscellaneous, and Senior Researcher at the Berkman Center for Internet & Society at Harvard University gave us his thoughts on local/social.
I will never be able to capture his whole speech in this post but here are some of the thoughts that blew my mind.
Talking about networks and markets, he obviously said the very famous “markets are conversations”, describing them as being connected, real and out of control but he also added “markets are networks”. People are shopping for things (like a new car) and this base of shoppers is changing every minute as people drop out of that process and new people come in.
Talking about huge networks like Facebook and Twitter, he explained to us why these networks happened so quickly. He told us the web is made of interests, people talking about stuff. They have an interest and they’re meeting with people with similar interest. meeting of interest. If we engage on the Net with other people online, it’s because we share the same interest. The big question is what happen when companies arrive and want to have a conversation. Traditionally, businesses have a single interest: profit. Consumers are weary because interests are not necessarily aligned. Why would I engage on the Net with companies if we don’t share same interest?
He said he didn’t like the expression “social media” as media has traditionally stood between people but that’s not happening with social media because “we are the medium”. We are a medium that passes things along. We move it because we found it interesting and thought that you would find it interesting as well. The stuff we share is so compelling that we put our reputation on the line to pass it along.
He also talked about the impact of social media on our sense of time. It used to be, when you graduated, you lost track of people. You only saw them again when you went to your reunion. If you left a job, you lost track of your former colleagues. Our kids will have their friends/colleagues/contacts with them for the rest of their lives because why would you push someone outside of your memory, delete them, unless they’ve done something bad?
And with mobility, we get ubiquitous connectivity. We can connect with any of our contacts at any time. We’re now filling “moments” all the time, for example, when we’re waiting. We’re filling up everything, with no empty time. We’ve reached plenum, a plenum of interests, filled with what we care about.
Talking about “local”, he said it’s becoming embedded in the Net more and more but that when we get to ubiquitous access, things will change. The Internet will match our real lives. We are inventing the “blur” between online and offline (the real world).
As for things that are challenged by social in the local space, Weinberger mentioned pricing. Owners were used to set their prices but with daily deals, for example, they’re losing some of that pricing power. The notion of inside and outside the store is also blurring. We want to know everything about a business. The outside is becoming the inside. The shared common space where we engage with one another is becoming the inside of the store. A good example is the mayorship in Foursquare.
He concluded by mentioning three imperatives for local media companies (and merchants): Align, add, and get out of the way. It’s not about you. Consumers know better than you what they need, what they want.
At the BIA/Kelsey ILM East 2011 conference this morning, we heard from Lior Ron, the Group Product Manager for Google Places (including Maps and Hotpot).
A couple of interesting information points came out:
- Google Places contains 50M places around the world
- They felt they were missing “people” in the local equation and that’s why they launched Google Hotpot
- Hotpot is all about organizing the web around people and places and is a local recommendation engine.
- Hotpot now has generated more than 3M reviews and ratings (see this BIA/Kelsey post from last week for more data points)
Lior Ron said that Hotpot is not about Google building another silo or reviews site. It’s about collecting short signals to enable better ranking/relevancy. A few conference attendees were not convinced by that statement.
March 22, 2011
In a short presentation yesterday afternoon at the BIA/Kelsey ILM East 2011 conference, Peter Krasilovsky presented several slides about the local media industry. In them was, I think, an interesting nugget of information: The seven drivers of interactive local success within a media organization.
- Strategic separation of business units. This is key to develop a solid new business that’s not encumbered by traditional thinking and conservatism. In the words of the BCG Matrix, it reminds me of the need to nurture “rising stars” that will eventually kill “cash cows”.
- Investment. A must. In addition, risk-taking must be rewarded, not punished.
- Social media
- Multiple users and business touches. Fragmentation brings with it the need to re-aggregate to help advertisers make sense of the media/advertising/social media landscape and create substantial value.
- Mobility. Creates ubiquity, permanent access to the internet.
I would add Human resources to that list. You need visionaries/thinkers that can innovate and execute quickly. That’s a huge challenge for traditional media company today.
March 15, 2011
Next week, from Monday March 21 to Wednesday March 23, I will be in Boston for the next BIA/Kelsey conference: Interactive Local Media East 2011.
Here are the presentations I’m most looking forward to:
- Definitely the keynote from David Weinberger, author of “The ClueTrain Manifesto” and “Everything is Miscellaneous.” Definitely a huge inspiration for Needium (remember “markets are conversations”?). Can’t wait to get his insights on local and social.
- The keynote from Evan Cohen, GM, Foursquare. The geo-local/social startup from New York has added a lot of interesting functionalities in the last few days.
- The SMB panel. Good qualitative data always comes out of this discussion.
- “The New Wave of ‘Hyper Relevant’ Media” panel with Tim Condon, Director, New Digital Ventures at Washington Post Co., Mike DeLuca, Senior VP at AOL Local, Matt Idema, VP at Yahoo! Local and Josh Resnik, VP and GM at Gannett Digital Media Network. Still a big believer in hyperlocal content and advertising. We haven’t seen much large-scale traction yet though. It will be interesting to get an update from these guys.
- The discussion with Maz Sharafi, Senior Manager, Local Monetization, Facebook. Facebook doesn’t usually share a lot of new information. Maybe we’ll be surprised this time!
- The “National Advertisers and Local Search” panel. I want to hear them talking about their social media strategy and tactics.
- The discussion with Eric Eichmann, COO, LivingSocial. Interested in hearing what LivingSocial’s strategy is vs. Groupon’s. Also interested in getting their point of view on unsatisfied small merchant daily offer advertisers. I keep hearing about those informally. Is it just the point of the iceberg or is it minimal? Jim Moran from Yipit can probably contribute to the conversation.
- Also interested in the “Deal Universe: The Big Picture for Coupons and Sales” panel. I’m a huge fan of coupons and I’m intrigued by the impact of daily offers on the couponing/promotion business.
If you want to meet and chat or if you’d like a demo of Needium.com, don’t hesitate to e-mail me at seb AT needium.com
I will be in San Francisco most of the week next week for meetings and also attending Opus Research’s Conversational Commerce Conference. The conference is February 2 and 3 in the city.
Conference description: “Marketing and customer service are on a collision course. Social media now shine a bright light on customer service interactions, which increasingly have brand implications. Customer care can also offer valuable insights for marketing and product development. How many companies are adapting and turning this to their advantage? Still too few as old modes of thinking remain entrenched in organizations. Opus Research’s Conversational Commerce Conference (C3) brings together a diverse array of interested groups and stakeholders to discuss the new social media landscape and its joint impact on marketing and customer care. Beyond showing how these organizations must now collaborate, C3 will offer successful case studies and explore the new rules of engagement as companies deploy social media for marketing, sales and customer support.”
I’m speaking on the “A Parallel Universe: Social CRM for SMBs” panel on Thursday with Brendan King, CEO, Vendasta Technologies, Craig Donato, CEO & Founder, Oodle and Perry Evans, Founder and CEO, Closely, Inc. I’ll be sharing some of the insights we’ve generated since we’ve launched Needium, our social media lead generation service.
I do have a bit of free time on Monday and Tuesday for additional meetings. I am also available to meet during the conference. If you’d like to connect, please send me an e-mail at seb AT needium.com