On the hunt for affiliate dollars, McClatchy -- owner of The Miami Herald and The Sacramento Bee -- is partnering up with social shopping startup Groupon.
Per the deal,
visitors to 28 of McClatchy's local Web sites will see exclusive Groupon deals not available on Groupon.com. Groupon will be expected to broker each deal.
Daily Groupon deals are expected to
launch first in the Sacramento and Kansas City markets, while other sites will be added in the coming months. For Groupon, the deal is non-exclusive, as it plans to expand its services to other
publishers going forward. "Providing merchants with major alternative channels to run deals is vital," said Sean Smyth, Groupon's VP of Business Development. For McClatchy, which has made its distaste
for online pay-walls clear, the affiliate revenue should supplement its ad-supported business.
As debate percolates around newspapers charging for Web content, count on the Miami Herald
and Kansas City Star sites to stay free. Earlier this year, McClatchy Co. CEO Gary Pruitt said the company was "comfortable" with its ad-supported model. "We don't view it as fatally flawed,"
he told attendees of a Borrell Associates local online ad event in New York.
In the first quarter, McClatchy's digital ad revenue rose 2.2% to $46.8 million -- a modest but welcome change
compared to 2009 when digital revenues actually declined.
Groupon offers deep discounts on local deals on everything from spas and sky diving lessons to hotels and restaurants. Discounts range
from 40% to 90% of the normal price. If enough people buy into the offer, everyone gets the deal. If there aren't enough people, no one gets the deal. Groupon collects payment and passes it on, minus
their fee, to the business.
What makes the service so compelling is that people have an incentive to get their friends involved to make sure the minimum is hit. The company is now profitable and
claims more than 270 employees -- the majority of whom work as sales associates responsible for reaching deals with local service providers.
In April, the startup secured $135 million from
Digital Sky Technologies, along with Battery Ventures. Late last year, it closed an Accel-led second round of funding to the tune of $30 million.
Also this year, McClatchy debuted a new online
advertising and marketing platform designed to increase the visibility of its local ad clients. The WebVisible service helps local advertisers raise their visibility in newspaper listings, Web sites,
search engines and mobile phones, with a focus on search-engine marketing. It also includes banner and display ads and online video.