Broadcast Groups Finding Partners in Local Daily Coupon Sites

TV and Radio broadcast groups are increasingly working with online companies to offer daily coupons, getting in on a craze highlighted this week by Google’s reported $5.3 billion bid for Groupon, industry executives said. “We're not sure if this is white hot for the next six months or the next six years, or even the next six days,” but “we love the space,” said Kerry Oslund, vice president of digital media for Schurz Communications, which owns TV and radio stations and has a daily deal going in one market. Radio stations have long offered half-off deals of the sort that have driven sites such as Groupon and Living Social to popularity, but the offers are newer territory for TV broadcasters, Oslund said.

Broadcasters are in position to overtake established deal sites in their markets, said Matt Coen co-owner of Second Street Media Solutions, which provides a daily deal technology platform that media companies can brand as their own and counts CBS’s TV station group as a client. Broadcasters already have local sales representatives and can reach a wide audience to promote the deals with on-air messages, he said. “The key is they have got to move quickly and decisively to jump on the opportunity,” Coen said.

Though TV broadcasters get most of their ad money from big-ticket item sellers such as car dealers who aren’t likely to jump into daily promotions, some 15-30 percent of local media companies’ revenue can come from the types of business that Groupon, Living Social and other deal sites are finding success with, said Martin Tobias, CEO of Tippr.com. “It’s enough that if they lost it, it would hurt,” he said. Plus, many broadcasters count smaller businesses as clients for their websites, he said. “And a lot of radio’s advertisers are these kinds of advertisers,” he said. Tippr is working with Belo on Belo’s Yollar.com deal sites.

Broadcasters could find smaller companies have exhausted their ad budgets or decided they don’t need conventional spots after participating in a daily deal, said Peter Krasilovsky, vice president and program director at BIA/Kelsey. “If you're a restaurant and you do a Groupon sale, and say you sell 1,000 Groupons, you may not have any reason to be marketing yourself for the next year” because the restaurant is full, he said. “It may eat into local marketing budgets that way."

Cable operators want to offer daily deals as well, said Coen. “We're seeing a lot of interest from cable providers,” he said. “They have different kinds of relationships” with subscribers “and ones that are well-suited for promotions,” he said. Plus, they are able to target their promotions and already maintain substantial e-mail databases, he said. Building a deep e-mail database of subscribers will be increasingly valuable to broadcasters and other local media companies, Coen said. What makes Groupon so valuable is its “incredible e-mail database in local communities of consumers who are interested in spending money,” he said. Broadcasters who have “large, deep and fresh databases are going to be more valued by investors or by people buying” broadcast assets, he said.