New research from Hitwise suggests that social-buying site LivingSocial has gotten off to a running start in 2011. A January traffic surge has helped the company close the gap with Groupon, getting more than half the share of visits of the category leader. Two months ago, Groupon had a 10-to-1 traffic advantage over Living Social, according to the Web measurement firm. Hitwise attributed the traffic spike to LivingSocial's "door-busting" $10 for a $20 Amazon gift certificate deal this month, which brought in more than $13 million in sales. That topped the previous record of $11 million that a national Gap-Groupon offer took in last August. However, the Amazon deal was criticized as a marketing ploy -- since unlike typical deals where LivingSocial takes a 30% cut of sales, it bought the gift cards from Amazon and sold them itself. Amazon recently invested $175 million in LivingSocial, so an increase in business for the deal site also benefits the online retail giant indirectly. The gift certificate offer led to reports of complaints about canceled orders, unauthorized charges and other issues related to the promotion. "Despite some claims of fraud and issues with customer support LivingSocial's 80% traffic surge last week (and Groupon's 20% decline in the same time period) proves that the race for dominance in the group coupon space is far from over," wrote Bill Tancer, general manager of global research at Hitwise, in a Jan. 27 blog post. LivingSocial had 2 million U.S. unique visitors compared to 3.9 million for Groupon as of Jan. 16, according to the latest comScore data. But the cut-off date falls just a few days before the Jan. 19 Amazon deal, so the numbers don't show what kind of bounce LivingSocial got from the deal. However, the site's traffic had already roughly doubled from 1.1 million in mid-December. A growing online audience is one thing, but what about any gain in registered users? LivingSocial said Friday that it had added 5 million subscribers worldwide so far in January and expects to end the month with 20 million overall. That compares to about 50 million for Groupon. Does that mean more Amazon offers are on the way from LivingSocial? "We're always exploring opportunities to offer really amazing deals locally and nationally and working hard to identify the next big deal," stated a LivingSocial spokesperson.
After years of build-up, LinkedIn has finally filed to go public at a likely valuation of $2 billion. The social-networking site for professionals is hoping to raise up to $175 million to scale its business and develop new services. Opening its books as part of the IPO process, LinkedIn revealed that net revenue nearly doubled to $161.4 million in the first nine months of 2010 -- up from $80.8 million in 2009 -- with $1.85 million in profit. LinkedIn said it is now profitable, with net income of $10.1 million -- up from a loss of $3.38 million during the first nine months of 2009. According to the company, 41% of its revenue presently comes from job-related products that help companies search for potential employees; 32% comes from ad sales; and the remaining 27% comes from paid subscriptions. Already, LinkedIn says it has $89.6 million in cash and cash equivalents on hand. Yet its niche market is evolving quickly as it faced increasing competition from smaller international rivals, like Xing in Germany and Viadeo in France. It's also widely believed that LinkedIn is wise to go public before Facebook -- which, even without an IPO, represents an existential threat to any social network on the Web. Along with potential acquisitions, LinkedIn said the additional funds are needed "for general corporate purposes, including working capital, sales and marketing activities, general and administrative matters and capital expenditures." In its filing with the SEC, LinkedIn added: "We believe that our members and the enterprises and professional organizations that use our platform are only beginning to leverage the power and potential of our network and its underlying database of professional information." To date, acquisitions include personalization startup mSpoke and ChoiceVendor, which rates and reviews business service providers, for which it paid $736,000 and $4.989 million, respectively. LinkedIn's registered membership increased almost two-thirds to 90 million last year -- up from 55 million users in 2009. So far, the company has raised over $80 million, including $53 million in a key financing round led by Bain Capital in mid-2008.
With billions in local ad dollars at stake, the "deal" space is filling up faster than a shot glass. Hoping to stand out from the pack, men's media network Thrillist is positioning its new Rewards program more as a content play than a Groupon-like "deal service." "We're calling them merchant partnership offers, and we're positioning them more like content," said Mike Rothman, Thrillist's VP of business development, who was recently put in charge of Rewards. At least for Groupon users accustomed to deals on sushi and yoga, Thrillist Rewards also carries a certain shock factor. Early Rewards included discounts on "a strip and a 'strip' at Scores NY," and "boozy baked goods." Since launching in 2005, Thrillist has focused most if its efforts on national advertisers, said Rothman. Rewards, he said, is an opportunity to focus on local businesses, which as a group represents big bucks. Rewards is also a way to meet demand from attention-hungry businesses. For years, according to Rothman, small businesses featured in Thrillist's local newsletters would come back and ask for additional coverage. "Our editorial policy didn't allow us to do that, but now we can with Rewards," he said. Launched late last year with about 100,000 New York subscribers, Rewards is presently being fine-tuned in anticipation of a national rollout. "We're refining price-points and the message," said Rothman. Thrillist is shooting for roughly 50% of sales generated by Rewards promotions, but Rothman insisted that the deal terms are flexible and depend on specific business partners. Groupon reportedly commands upwards of 60% of sales, but is facing increased pressure from rivals' deal services. Meanwhile, thanks to Thrillist's existing relationships with businesses and audiences nationwide, Rothman expects Rewards to expand rapidly. "We already have the scale and merchant relationships," he said. And Thrillist is going to need every relationship it has to fend off competition from Groupon, LivingSocial, Google, and other deal services. Google, which reportedly offered upwards of $6 billion last year, just announced its own daily-deal service, Google Offers, and is already reaching out to businesses. Groupon, for its part, is reportedly preparing for an initial public offering as soon as mid-year. The group-buying leader only recently announced a $950 million round of funding, which valued the company at $4.75 billion.
Ad.ly, a marketing platform that matches brands with celebrity endorsers on social networks, has quietly completed a beta on alpha network, Facebook, and is rolling it out to marketers and agencies. Based on results of the beta, Facebook appears to be as much as twice as effective as Twitter in driving actions, including "likes" and comments among social network users. Ad.ly began launched with Twitter in 2009, and has dabbled with other networks, including MySpace.com, but had yet to integrate with Facebook until it began the test during the 2010 holiday season. In retrospect, Ad.ly CEO Arnie Gullov-Singh says the relatively stronger performance of celebrity endorsements on Facebook should not come as a surprise, noting that Facebook currently has about six times the monthly uniques of Twitter, which explains the higher click volume of users. Beyond that, Gullov-Singh says Facebook has simply invested more to optimize its users experiences around newsfeeds, including celebrity newsfeeds driving traffic and actions around the brands they plug. By comparison, he says, the Twitter experience is a "strictly linear timeline," which can be overwhelming for users to follow people who tweet frequently. "Social actions happen more naturally on Facebook than on Twitter, because as a consumer, you can easily see who else has liked or commented on a piece of content, which makes you more likely to join in the conversation," he explains, noting based on the beta, Facebook generated 50% to 100% more actions per celebrity endorsement. The results are based on a test of six marketer's brands involving 12 celebrity endorsers. Ad.ly did not disclose which brands were used, but said the categories involved retail clothing, jewelry, consumer electronics and games. It currently works with about 150 advertisers, including such high profile ones as AT&T, Best Buy, Old Navy, Microsoft and Sony. During the beta, Ad.ly compared results of comparable endorsements on Facebook and Twitter and found that, on average, brands generated 49,000 consumer visits (clicks) per campaign, and an average of 500 actions such as comments and "likes" per post.
Marketers that want to create a comprehensive story about a product or service by pulling content from across the Web into one location will soon realize their dream. Qwiki, a rich media platform that recently launched in alpha, will do just that. Today, the site offers three million reference topics: people, places and things. The next release of the product will allow people to connect information about them. When released later this year, Qwiki will provide people with the ability to "click a button and merge your Facebook and LinkedIn profiles on demand to create a Qwiki describing you," explains Doug Imbruce, Qwiki CEO. "A variety of information about you will get pulled together in one place from across the Web. We're talking about specific structure data, unstructured data, images and information about you such as where you went to school." The cohesive narrative describing an individual puts that information into animation segments supported by clickable interactive references through pictures. For example, Imbruce went to Columbia University, so his Qwiki might include a link to references that describe the school. Imbruce says engineers took privacy into consideration and will require the person to opt in before creating the Qwiki. While some of the information gets pulled into the Qwiki on the fly, other data will reside in cache or a database, depending on how often it gets indexed and updated. Later this year, publishers will have the ability to make their own Qwikis and embed them on their Web sites. It will support any third-party publisher use with their raw unstructured content or data and put it into the Qwiki format. Qwiki recently launched in alpha to the public. While the engineers building the Qwiki platform make it seem simple, the complex technology combines voice, audio and intelligence delivering rich media on demand. The company's business model doesn't rely on driving traffic to the company's Web site, but delivering content to the user, making it accessible on any Web site or device -- computers to smartphones to tablets. In fact, the company plans to release a version for Apple's iPad in the next couple of months, followed by the iPhone. Scale will come from exposing the platform to anyone who wants to use it, from real estate to retail, according to Imbruce. Qwiki's marriage of art and science relies on a proprietary text-to-speech engine, pulling from publicly available sources such as Wikipedia. The future technology will synthesize new information where it didn't exist before. Qwiki raised $9.5 million to date, with Facebook co-founder Eduardo Saverin, YouTube co-founder Jawed Karim, and Juniper Networks co-founder Pradeep Sindhu leading the Series A round. Good Morning, Doug from Qwiki on Vimeo.
If Groupon wasn't already widely recognized as one of the country's fastest-growing companies, the $950 million the deal-sharing site raised earlier this month put an exclamation point on it with its rapid rise. As part of its expansion, Groupon last spring acquired mobile startup Mob.ly, headed by Mihir Shah, former senior director of product management at Yahoo. As vice president and general manager of mobile at Groupon, he now leads the company's mobile efforts. We caught up with Shah recently to ask about what's happening at the company on the all-important mobile front. OMD: Can you briefly describe Groupon's mobile presence?Shah: What we have in U.S. is an iPhone app, an Android app, a BlackBerry app, an [iPod] touch site and WAP (wireless access protocol) site. Consumers use all the mobile products for two reasons: one is to purchase Groupons and the other is for paperless transactions, so they can carry Groupons with them, show them to a merchant and redeem via the mobile screen. OMD: How many downloads to date have there been of the Groupon app? Shah: What I can say is that on iPhone and Android, which have been around the longest, we've seen 5 million downloads combined. The iPhone app has only been in the market since about April of last year, I think, and Android came several months later. And we're seeing pretty high growth in number of active users. We've seen significant growth in the last six months in terms of percentage of users who redeem from mobile. OMD: Does customer behavior on mobile differ much from desktop Web?Shah:Our whole product is about making that quick purchase decision -- the Deal of the Day -- and then printing it out and redeeming it. It's not a time-spend product, it's really an ecommerce product about trying to buy the deal that's best for you and then you're done. It's probably even better suited to mobile -- you arrive in a new city, you just pop out your app, you can see what the deals are that day and maybe you can buy one and use it immediately. OMD: In that vein, what kind of location-based features work in connection with Groupon on mobile?Shah: In a city, we'll have a certain number of deals available. Now if you turn on the app and it senses your current location, then offers the deals in that city, we'll try to give you the most relevant. That's the personalization we have now based on location and a couple of other things we collect. What we don't have now is for you to just to say 'I want deals just in a .5-mile radius that are available now,' from a pull perspective. OMD: Is that a feature Groupon plans to add?Shah: We don't really talk about future projects, but what we're doing right now is taking a look at things we can do to help our merchants to get customers to walk through the door at the right time. First when we launched it was just Deal of the Day, then we added multiple deals for a particular city, and then we added personalization on top of that so we could use your demographic, male or female, or use your location to try to give you a better deal, so we're going to continue down that path. OMD: Can you talk a bit about the initiative to provide merchants apps to help process Groupon transactions?Shah: So we have mobile redemption apps we shipped a few months ago where the merchant can scan the barcode off the consumer's phone or off the paper Groupon for automated redemption. Merchants can just download the apps -- an iPhone app or an Android app -- or we have a program where we actually give the devices to them. They can also enter the bill total so they can track customer overspend [on a deal] and that sort of thing. We now have several hundred merchants, even though it's a pilot program, already using this. And we're adding over 100 every week. A lot of them already have employees that have smartphones, working the cash register -- and the way we we've built it, they can just download the app and log in. There's no secure information that would be revealed, and they can just start scanning. A lot of them have their own phones; you don't even have to provide them with the phone. They just use it and it automates the whole process. OMD: If Google launches a direct Groupon competitor, as reported, would it have an instant advantage in mobile if a Google Offers were integrated with Android?Shah: I haven't seen Google launch anything yet. Look, we have tons of clones and competitors out there. It's been a year and half since we've had clones [who compete with Groupon] all over the place. It hasn't really brought us down.
Fair Information Practice Principles are a "useful tool" when analyzing online privacy, but should not be codified in new regulations or laws, a coalition of 13 ad, media and business organizations argue in comments submitted Friday to the Department of Commerce. Formally establishing a fair information principles-based framework for online privacy "would reduce industry's ability to respond to changes in consumer preferences and would hinder advancements in technology," the Interactive Advertising Bureau, American Association of Advertising Agencies, Association of National Advertisers, Newspaper Association of America and other groups say. The organizations' comments were submitted in response to a proposal by the Department of Commerce that industry groups and consumer advocates should jointly develop enforceable self-regulatory privacy policies based on Fair Information Practice Principles. The groups argue that Fair Information Practice Principles "serve as the foundation for many self-regulatory programs," but say that the principles should be "applied through self-regulation in a manner tailored to meet the particular context." What's more, the groups say, some of the principles aren't necessarily appropriate for companies engaged in online behavioral targeting, or tracking people as they surf the Web in order to serve them targeted ads. For instance, the principles broadly call for data collectors to not only inform consumers about data collection, but also specify the purpose for which data will be used and limit retention periods. The ad and media organizations say it doesn't make sense to apply those types of restrictions to companies engaged in online behavioral advertising, "The appropriate way to align consumer expectations with commercial information practices is by providing meaningful notice to consumers about a company's data collection and use practices, and, where appropriate, providing choice," the groups say. "Meaningful notice does not require companies to specifically enumerate every possible use of collected data. This not only adds to the length and complexity of such notices, but it could have the effect of stifling valuable and consumer friendly innovations." The Commerce Department also sought input about a Federal Trade Commission proposal that industry groups voluntarily create a universal do-not-track mechanism to allow consumers to eschew all online ad tracking. The IAB and other groups say in their comments that they support the current self-regulatory efforts to allow consumers to opt out of online ad tracking links available at sites like AboutAds.info, but oppose a mandatory do-not-track system. "Efforts by the federal Government -- through legislation or regulation -- to create or mandate a Do Not Track mechanism risk threatening the Internet as it exists today." Currently, Aboutads.info allows consumers to opt out of online ad tracking by 59 ad networks, and the ad groups say in their comments that there are "dozens more preparing to join." The comments submitted by the ad groups don't estimate how many ad networks are currently engaged in collecting data used to serve targeted ads, but compliance company Evidon (formerly Better Advertising) says it has identified around 300 such companies. Some privacy advocates submitted comments on Friday arguing that government regulation is needed to protect consumers. "So-called 'Notice and Choice,' which has been the foundation of the self-regulatory regime, has done nothing to stem the tide of increasing data collection and use -- all without the genuinely informed understanding and consent of users," the Center for Digital Democracy and U.S. Public Interest Research Group say in their written comments.
The Federal Communications Commission has asked an appellate court to dismiss challenges by Verizon and MetroPCS to the new neutrality rules. The FCC argues that the telecoms jumped the gun by appealing the rules before they were published in the Federal Register. "The filing window does not open until Federal Register publication," the FCC argues, adding that the appeals are "fatally premature and must be dismissed." The FCC voted 3-2 in December to impose open Internet rules on broadband providers, but has not yet published those rules in the Federal Register. Agency decisions typically can't be challenged until they are finalized, which requires publication in the official Federal Register. But there are some exceptions, including when an agency decision modifies a company's broadcast license. MetroPCS and Verizon argue that the neutrality rules modify their licenses, and that they are therefore entitled to an immediate appeal. The new regulations ban all broadband Internet service providers -- wireline and wireless -- from blocking sites or competing applications, and also ban wireline providers from engaging in unreasonable discrimination. The FCC argues that its neutrality rules should not be treated the same as decisions affecting specific companies' licenses. The neutrality order "establishes general rules that apply to all fixed and wireless mobile ISPs, not to any specific ISP," the FCC argues. "The order does not even discuss its application to any specific ISP. Nor, in light of the numerous ISPs that provide service throughout the country, can the order be viewed as addressing such a small set of identifiable ISPs." The FCC also argues that if the U.S. Court of Appeals for the D.C. Circuit does not dismiss the case, it should hold the matter because other appeals relating to the neutrality rules might be filed in different courts. In that event, the federal court system might hold a lottery to determine which court will consider the appeal. If the case remains in the U.S. Court of Appeals for the D.C. Circuit, the telecoms likely have a good chance of vacating the neutrality order. That particular court already held in a separate case that the FCC lacks jurisdiction to enforce open Internet rules.
ignitAd has begun to roll out an ad yield optimizer that provides bid optimization management forecasting demand patterns using predictive analysis algorithms. The technology estimates the highest-paying advertising source for each ad impression before making the buy, achieving "optimal" revenue for publishers. The bid optimization technology aimed at improving revenue determines how to distribute the ad inventory between exchanges, networks and demand side platforms (DSPs), says Assaf Roth, ignitAd CEO and cofounder. "Clients have seen an increase in yield between 50% and 150% from using the bid management platform. Sometimes, we can hit higher." The system predicts the correct price for each impression. By analyzing each impression, it can generate higher yields. But the startup could run into challenges. Similar technology already exists from AdMeld, Rubicon Project and Pubmatic. Roth, of course, calls ignitAd's technology "unique." He insists that the bid optimization technology, which is based on a proprietary predictive analysis and advanced bidding algorithms, makes the company stand out from competitors. ignitAd, based in Tel Aviv, Israel, supports a few dozen Web sites that have begun to test the platform. The company has secured $2 million in venture-capital funding led by DFJ Tamir Fishman Ventures and JVP Media Labs.
As creative director of an interactive ad agency I have a lot of clients come to me requesting a social strategy. After doing a lot of research and planning, and many hours burned, what I usually come to discover is that the client truly wanted nothing more than a mere presence on Facebook. Often times major brands tend to equate Facebook to a social strategy. And why wouldn't they? Both Wall Street and the mainstream media are infatuated with the social networking site. And as it recently surpassed the 500MM user mark it is a safe bet that this is where a brand's audience is hanging out online. The real challenge is not to decide if one should be on Facebook but how to find the advocates and engage them properly. The sad case is that many major brands fall short when it comes to engineering a true Facebook strategy. I have had many conversations with my colleagues in our Participant Intelligence and media departments, and we all can agree that a Facebook strategy is much more than simply offering a weakly branded Facebook application where you pick your 5 favorite ice cream flavors. It's about creating awareness of one's brand, interaction with one's brand and then evangelism of one's brand. It's about creating a connection, a bond, and then forging that bond with information and content. It's about sharing, listening, and then sharing some more. It is a dialogue, not a monologue. Lots of big brands take pride with the numbers of "likes" they have on their Facebook page. Many brands engage advertising or creative agencies for the sole purpose of increasing their fan base on Facebook. The question is, once a brand reaches the desired milestone of ten thousand, one hundred thousand, or even 1MM fans... then what? What are they truly aiming for? Now that a brand has all of these people "liking" them what are they going to tell them? This is where a lot of brands fail to deliver. They don't disseminate any information once they have a participant as a "fan." There is no follow up, no dialogue, no participation. It is just an occasional arbitrary update pimping out the latest product or service. This is a fail, which often results in a loss of advocacy. A good starter for major brands when creating a Facebook social strategy is to formulate a plan. Figure out how you are going to create awareness of your brand. Are you going to create an advertising campaign driving participants to your Facebook Fan page as opposed to a website or microsite? Are there going to be web banners promoting your product or service? Or perhaps a brand wants to create a banner campaign solely promoting their Facebook page. Either way, a plan is in order. One must decide what their objective is, what they are trying to promote, and how to first engage users. Once a participant arrives at your Facebook fan site how do you keep them there? How do you procure them as a repeat visitor? How do you stay in touch and create a dialogue? There are several methods, but perhaps the most popular is "like-gating." Like-gating is the act of offering a participant valued content but then only making it available to them after they "like" you branded Facebook page. After they click the "like" button the exclusive content is revealed to them and they are free to interact with the page and exclusive content. The exclusive content given should be either entertaining, informative, or useful. Some brands use exclusive video clips to reward their participants while others offer games, entrainment applications or just access to information. Regardless of what a brand is delivering it must be pertinent and desirable to that participant. In order for a brand to keep a participant engaged they must continue to deliver content to them on a regular basis. It is bad practice to engage a fan and then maintain radio silence. Make sure to make distribution of information part of your Facebook social strategy or plan. Create a matrix or schedule and keep that participant engaged and informed. Ask the participant questions and let them have a voice regarding the brand. This speaks volumes to a consumer and makes them feel loved and that major brands or corporations really do care about them. Finally, brands must learn how to turn participants into evangelists. This is perhaps the hardest yet most important challenge of any major brand attempting to execute a social strategy. This can be done in several ways but perhaps the best methodology is to just to put your best idea forward. The philosophy "Build it and they will come" comes to mind when speaking about Facebook endeavors. We work with Fortune 500 clients everyday to come up with creative, Facebook user experiences. Big brands shouldn't try to force something viral. They shouldn't try to encourage "shares" or a pass-a-long mentality. Brands should work hand in hand with their agencies to just come up with the best idea they possibly can. Make it original. Make it fun. Make it memorable. Make it count. If brands create something truly unique it will be seen and naturally create a "spread fast" reaction which will gain recognition and lead to evangelism.