Groupon - friend or foe? Regional newspapers need to decide - fast

We are watching the rise of social shopping with great interest.

Social shopping represents a real challenge to newspaper companies. Social shopping companies like Groupon are growing fast here now and are aggressively scooping up local advertising revenues that traditionally have been the domain of regional media. This is a clearly problem. These are revenues and relationships that once gone are not coming back and all at a time when regional media owners cant afford further declines in their revenues.

So what to do?

Well the first thing is regionals have to act. They cannot afford to sit back and allow yet another clever non-traditional company to swoop into the market and plunder these revenues. This cant be allowed to go the way of  recruitment, automobiles, property and personals revenues. They have to act and swiftly.

We see 3 'action' options:

1. Partner Groupon (or other major player) and let them commercialize your audience with you at no cost to yourself

2. Find a white label social shopping partner and set up a branded service at limited cost and low risk to yourself

3. Develop your own a 'deal of day' platform and launch the service for your self and pocket the incremental revenue without having to share it with a partner.

There are as always advantages and disadvantages to each of these and the best fit route is dependent on individual market circumstances. The good news is that which ever way regionals choose the result will be positive. Market take up has proved that merchants like the social shopping model (why wouldn't they there is no money to pay until there is revenue through the door) and millions of consumers are loving the deep discounts and the social "all join in' aspect aspect of the service.

The other significant advantage about social shopping for regionals to consider is that the service is good at building brand relevance/role and reader engagement - both in shortish supply these days.