Newspaper daily deals a mixed bag for publishers

Washington Post's Capitol Deal

_As newspapers struggle to attract new readers and adopt new revenue streams, some are emulating daily deal sites like Groupon or LivingSocial and selling their own deals. Given the headwinds facing daily deals companies, have newspapers arrived too late to a losing game, or do their strong advertiser relationships give them a leg up on Silicon Valley?

The daily deals business—deeply discounted, time-limited coupons for services or products— heated up in late 2010 and early 2011. Local small businesses, previously overlooked by internet advertising giants, jumped on the concept to attract new customers in a way that is more measurable than traditional advertising. But the heyday appears to have passed. The two biggest daily deals companies, Groupon and LivingSocial, are experiencing rapidly declining financial prospects and smaller deal sites have been acquired or disappeared.

Newspapers copied the tech companies, figuring their local sales forces and strong advertiser relationships with merchants would give them an advantage. Today the Boston Globe offers BostonDeals, the San Francisco Chronicle has SFGate Daily Deals, and the LA Times has LA Deals. The Washington Post initially offered restaurant deals through a site called The Capitol Dish, then relaunched a more general deal site called The Capitol Deal last year. Several third-party companies including NimbleCommerce, ShoutBack Concepts and Second Street offer to handle the back-end—processing coupons and payments—for media companies offering daily deals.

WaPo takes aim at a different demo

How have these strategies played out for newspapers hoping to diversify their revenue streams? It’s been a tough time to enter the market, but some papers are claiming success. For one, newspaper readers typically aren’t the tech-savvy twentysomethings who might buy daily deals for bars, tanning sessions or personal training. “Our audience tends to be different from LivingSocial and Groupon’s audience,” says Tim Condon, director of digital ventures at the Washington Post. The Capitol Deal once fielded a call from a couple who had mistakenly cut an ad out of the paper and drove to a high-end resort in Southern Virginia, where they tried to use the ad like a coupon. Condon’s staff completed the transaction over the phone and gave the couple their voucher code to redeem at the resort.

The Capitol Deals team has learned through trial and error to focus on deals for an audience in their late twenties to mid-forties. “We’ll run a local bar deal that sells nothing on us and sells a ton on other deal sites,” he explains. “The deals that have typically done well [for WaPo] tend to either be higher price point and higher savings or they tend to be more of an experience-type deal where someone is looking to make a weekend out of it like wine tasting deals.” Recent deals include $70 worth of hairstyling for $30 and $18 for a pair of tickets to a George Mason basketball game and the typical Washington Post deal sells around 250 coupons, says Condon, who wouldn’t disclose how much money the Post is getting from the program.

Although large newspapers have built-in brand recognition in their area, they don’t necessarily have the ability to reach a huge share of local consumers anymore. “You’d expect a major newspaper to have the largest share in their own markets, but good newspapers typically have under 20 percent of the market in this space,” says Peter Krasilovsky, who follows the daily deal space as a senior analyst at media research firm BIA/Kelsey.

Behind newspapers’ deals, profits from advertising

The Boston Globe, LA Times and Star Tribune all declined to discuss how well their daily deals programs are doing or didn’t respond to requests for comment. While daily deals may not turn into huge money spinners for the papers, they could act as a sweetener for advertisers (much like digital ad space does) and a way to promote the newspaper to a different demographic.

A company spokesperson at the Los Angeles Times said the weekly email promoting the Times’ LA Deals goes out to over 150,000 people. A 2011 report from Hearst, which owns the San Francisco Chronicle, stated that over 180,000 consumers in San Francisco have opted to receive daily deal offers from the newspaper. WaPo’s Condon said the Post can offer something that Groupon and LivingSocial can’t: ad space in the Washington Post. “The key selling point to the merchant is you’re getting your brand exposed to hundreds of thousands of people who aren’t going to buy your deal but are going to remember your brand,” says Condon.

Condon cites a deal that WaPo ran in June 2011, offering a free pizza from a local Papa John’s franchise to anyone who claimed a code. Over 100,000 people took advantage of the deal, doubling WaPo’s subscriber list overnight and creating buzz in the local business community thanks to front-page ads in the paper. “It had that halo effect of ‘Oh, those guys are the ones who ran the Papa John’s deal,’” says Condon.

Krasilovsky, the media analyst, sees newspaper daily deals as part of a larger strategy. “A number of newspapers, the Washington Post and others, are really pushing hard on this and they see it as a very relevant business,” he says. “I think the key is not only to have a daily deal, but to provide all kinds of relevant local marketing services: a daily deal, a sweepstakes, coupon offering, all these things theoretically can be integrated with each other.” For example, the Post also has an Angie’s List-style website for home services called Service Alley, while the Dallas Morning News partnered with a local ad agency to create a marketing service for local and national brands.

“We expect to see quite a lot of activity with newspapers and daily deals,” concludes Krasilovsky. “Newspapers are working more on local business marketing solutions.”

 

Embedding journalism everywhere: 5 reporters rewriting the career path

If the web makes everyone a publisher, doesn’t everyone need journalism? That’s the proposal that media pundit Jeff Jarvis made in April, toying with the idea of embedding journalists, and especially the processes and values of journalism, in organizations that traditionally have had little reason to associate with the rituals and codes of the newsroom. Jarvis’ point: journalists are the best at adding context, finding missing information and presenting accurate and compelling stories. As more companies, governments, police departments, NGOs and universities use the web to disseminate information directly to an audience, the idea doesn’t seem so crazy.

We set out to find some examples of this embedded journalism and came up with five reporters who have left the newsroom not for PR gigs or to write a book but to practice their craft in a very different way. Their profiles are below but here’s what we learned in the process:

  • Tech startups are big believers in embedded journalism.
  • Embedding favors journalists who can use their editorial savvy in conjunction with algorithms, datasets and business teams. That means curation, data journalism and building content relationships.
  • This is happening right now. All of our examples left the newsroom for their current employers in the last year or so.
  • Anyone thinking of making the leap should be prepared for a very different culture than that of the newsroom (duh!).

Dan Roth (@danroth), Executive Editor, LinkedIn

Roth joined LinkedIn last summer after stints as managing editor at Fortune.com and writing for Wired and Portfolio. He now runs LinkedIn Today, a news feed that delivers industry headlines tailored to users’ information and preferences. “It’s based on an algorithm, and I’m bringing some human editing to the entire experience,” Roth told Fast Company last year. “I used to be editor of Fortune Digital, and I realized we put up articles and just hoped the right people found them. At LinkedIn, we want to take the hope out of it.” Roth also collaborates with the company’s data scientists. 

Mark Luckie (@marksluckie), Creative Content Manager for Journalism and the Media, Twitter

Formerly social media editor at The Washington Post, Luckie joined Twitter in June and coordinates with journalists and news organizations on how they can best use the platform. He also collects insights on the tools reporters need for the future. “We are doing rolling analysis of how people are interacting with tweets, and we continue to post those sorts of things on the Twitter for Newsrooms page,” he says. In October Luckie will also present a series of free webinars on Twitter for Journalists in partnership with the National Press Foundation. Luckie says of the transition from WaPo to Twitter, “Being in a place where I get to step back and think and be innovative is quite a change for me. I’m still doing what I’ve been doing for news, which is monitoring what journalists are doing on social media.”

Liz Lufkin (@LLufkin), Chief Content Officer, Trapit

Lufkin was in charge of front page programming at Yahoo! before joining this content discovery site in April. The former USA Today editor now helps Trapit build partnerships with publishers and manages the company’s curation team. The team focuses on building topic-based traps that give users a broader view of how news stories develop than the traditional model, says Lufkin. “The story arc is a lot longer than I as a mainstream traditional journalist initially imagined it,” she says. “In a lot of cases, the conversation starts earlier and it goes on longer, and I find that really fascinating.” Her advice to journalists making the transition from newsroom to tech company is be prepared to justify practices you may have taken for granted. “At newspapers, the separation of church and state is sacred, but in tech companies, they’ll say ‘Why is that?’”

Liv Buli (@lbuli), Music Data Journalist, Next Big Sound

Buli was a reporter for The Local East Village and an editorial intern at Newsweek before taking her data journalism skills to Next Big Sound, which provides intelligence to the music industry. Buli has used the company’s vast trove of data to create stories on the fastest-growing artists at Bonaroo and the spike in interest about Taylor Swift after the singer’s live web chat. “With a wealth of data concerning artists at my fingertips, I am able to put together articles on trends within the industry, festivals, up-and-coming artists and more that can be of interest and value to anyone working with music,” she says, adding that her employer’s combination of data from social networks and sales figures gives her more insight than she would traditionally have had as a music journalist. Although Buli misses bouncing around ideas and pitching during weekly editorial meetings, she says, “My colleagues are a great source of feedback for me and often introduce to me to new great ideas through what they have seen in the data.”

Mark Armstrong (@markarms), Editorial Director, Pocket

Armstrong joined Pocket (then called Read It Later) last fall after discussions with CEO and founder Nate Weiner about how publishers might use the platform, which provides a handy way for people to save articles and other media for later consumption. Armstrong’s credentials: he founded Longreads, was news director at People.com and the New York bureau chief at E! Online. Armstrong has been using his editorial knowhow to suss out trends from Pocket’s data that show how different users consume content differently. “We’ve done a number of Pocket Trends reports highlighting how saving [media] for later can affect the types of content we consume,” he says. (Two examples highlight the most-read authors and the popularity of video on the platform.) Working at a tech startup has also given Armstrong the chance to contribute to business development, which doesn’t usually happen in traditional news organizations. “Everyone needs to be thinking about how to grow the business, so you are in a much better position to hear the challenges of what needs to happen.”

This Week’s Headlines: Olympics Open, WaPo Works on TruthTeller App

With today’s opening ceremonies of the Summer Olympic Games, all eyes are on London. This is the most social media-heavy Olympics yet, but one Greek athlete discovered the perils of thoughtless tweets. Here’s a look at the headlines that caught our eye in social media and the publishing business this week:

This Week’s Headlines: Facebook IPO, Freelance Income Data

Now that we’re a month into the New Year, data from 2011 offers some interesting insights on the state of freelancing and the journalism industry as a whole. We also spotted some intriguing new online tools and techniques for navigating online news reporting and editing. But, of course, the big news this week was Facebook’s impending IPO.

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