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A group of eight newspaper publishers — Advance Digital, A. H. Belo Corporation, Cox Media Group, Gannett (NYSE: GCI), Hearst, MediaNews Group, The McClatchy Company (NYSE: MNI), and The Washington Post Co. (NYSE: WPO) — have formed a joint venture to promote their individual daily deals efforts.
This new venture is being created with assets from the new entity’s acquisition of Travidia, the developer of Find n Save. The new company will adopt the Find n Save brand. Financial terms of the Travidia acquisition were not disclosed. The Jordan, Edmiston Group, Inc. was the banker on the deal, representing Travidia.
Over the past year, most newspapers have begun using some form of e-commerce to offset their declining print ad and circulation revenues, while buttressing their growing, yet relatively small, digital dollars. The platform all of the newspapers will now be using is called Find n Save. Last March, McClatchy started running its own in-house daily deal program on Find n Save, which was intended to operate alongside an existing affiliate deal with social shopping network Groupon (NSDQ: GRPN). Around that same time, Hearst signed on with white label daily deals service Analog Analytics to rollout daily deals sites across its local newspapers as well.
More recently, the Associated Press brought 40 newspapers into its mobile coupon network, iCircular. Google (NSDQ: GOOG) and Yahoo (NSDQ: YHOO) have also been working on bringing the Sunday circulars into the digital age.
“Newspaper publishers are interested in strengthening their online circular and classifieds capabilities,” said Tolman Geffs, JEGI’s co-president. “They want to make sure they kept up with the pace of development of the daily deals space. What Trividia’s system does is create a consistent entry point for advertisers at the local level, while extending the sales of the newspapers who use it nationally. For example, advertisers will be able to choose from a number of options, such as buying across a newspaper chain or simply doing individual newspaper deals. Ultimately, Trividia can handle online and offline conversion — which is what newspapers have been trying to do on their own when it comes to transferring their print circular ads to the web. This gives them a simple system to execute those conversions.”
This new agreement with Find n Save is not meant to replace the newspapers’ current daily deals efforts, Christopher Tippie, the CEO of the newspaper daily deal consortium told paidContent in an e-mail.
“I think it isn’t accurate to say it is a daily deals platform,” said Tippie, who was one of the founding executives of the 800-member Yahoo Newspaper Consortium, a local sales alliance between the portal and individual newspapers. “In fact, Find n Save actually integrates existing daily deals initiative currently underway with our affiliates. In essence, it is a shopping portal that provides, in a single location, a myriad of shopping tools and advertising products being used by our local affiliates: circulars, converted print offers, daily deals and other local shopping products. Each offer is extracted from the product, fielded, indexed, optimized (SEO) and is searchable from a common branded user interface.”
The social shopping/daily deals space is expected to continue to rise quickly. In a study, last spring, eMarketer noted that about 87.5 percent of U.S. internet users ages 14 and older, or 178.5 million people, will browse or research products online this year. Within that population segment, 83 percent will buy something online, making it a total of 148.1 million online buyers in 2011. By 2015, 170.3 million people, or 76.3 percent of the online population, will make a purchase on the web.
Unlike the situation a few years ago, when newspapers were blindsided by the rise of Craigslist, which among other shifts, helped decimate the print classifieds business, local publishers have rushed to add daily deals to their list of offerings. But with local TV stations and new startups entering the e-commerce space daily, the market remains fragmented. By banding together to support a single portal that newspapers can use, it will be easier for advertisers to buy inventory across several publishers at once.
Find n Save boasts that by putting eight of these publishers under its umbrella, advertisers will be able to reach 19 of the top 50 local markets. The company plans to add another 21 of the top 50 local markets within the next four weeks. By the end of 2012, Find n Save expects to be aligned with about 250 newspapers.
The big question is what sort of income will newspapers get from the daily deals space? For a while, it probably won’t be enough to cover print ad losses, that’s for sure. But as the publishers attempt to shift their businesses to a more digital-facing model, having a structure in place for online shopping remains essential for long-term survival, even if the short-term gains will likely be thin and incremental.
“It’s important to note that while daily deals and mobile coupons may be relatively new for the web, newspapers have already been in this business for a long time,” JEGI’s Geffs said. “This is just an extension of that existing business for newspapers, and that’s a real advantage.”