Groupon file for massive fundraise

Having turned down a huge bid from Google it seems that Groupon are now firing up with a massive fund raise.

"Groupon filed a request with Delaware authorities to raise as much as $950 million by offering preferred shares, The Wall Street Journal reported."

We all thought Groupon were nuts to turn down Google and that they should have taken the money.

Having so publicly declared and demonstrated their independence they now need big funds to defend their territories and to grow. It's not going to be easy. Competition is growing from a raft of players that include newspapers who scent an opportunity for themselves in the Groupong model. And then they is Google who having been rebuffed are unlikely to sit idly by and let Groupon succeed. And lastly there is the growing negative buzz that surrounds Groupon. Merchants and customers who have had a poor and unprofitable experience are increasing vocal.

Sure all makes for an interesting story in 2011.

Online ad spend greater than newspaper in 2010

Digital advertising in the U.S. will exceed ads in newspapers for the first time in 2010, as marketers follow consumers online and digital messages are viewed as more reliable than print.

Online advertising spending will finish the year with a 13.9 percent increase to $25.8 billion, compared with an 8.2 percent decline to $22.8 billion for print newspaper ads, New York-based researcher eMarketer said today on its website.

"It’s something we’ve seen coming for a long time, but this is a tipping point," Geoff Ramsey, chief executive officer at eMarketer, said in the statement. "The bad economy has actually accelerated the shift to digital advertising."

Online ads are typically seen as more reliable, he said, because their effectiveness can be measured, whereas print ads “are often difficult to tie to a measurable financial result.”

Newspapers will end 2010 with a 7.8 percent gain in online ad spending, to $3 billion, leaving them with an overall drop of 6.6 percent, to $25.7 billion, eMarketer said.

Total ad spending in the U.S. is expected to increase 3 percent to $168.5 billion in 2010, the research company said. Expenditure on newspaper print ads will continue to decline next year by 6 percent to $21.4 billion, and total online spending will rise 10.5 percent in to $28.5 billion, eMarketer estimated.

Bomber Command - oldie but goodie

I'm sure you've all read this many times before.....I hadn't ever read it which is why I post it here

Bomber Command's Operational Research Section (BC-ORS), analysed a report of a survey carried out by RAF Bomber Command. For the survey, Bomber Command inspected all bombers returning from bombing raids over Germany over a particular period. All damage inflicted by German air defences was noted and the recommendation was given that armour be added in the most heavily damaged areas. Their suggestion to remove some of the crew so that an aircraft loss would result in fewer personnel loss was rejected by RAF command. [Patrick] Blackett's team instead made the surprising and counter-intuitive recommendation that the armour be placed in the areas which were completely untouched by damage in the bombers which returned. They reasoned that the survey was biased, since it only included aircraft that returned to Britain. The untouched areas of returning aircraft were probably vital areas, which, if hit, would result in the loss of the aircraft.

i - struggles at the newsstand

Sales of the Independent's cut-price spinoff i are thought to have dropped to close to an average daily sale of 70,000 since launch, with no official circulation figures expected to be revealed until next year.


The 20p weekday daily launched on 26 October with a flurry of media coverage helping to drive paid-for sales of about 180,000, according to several sources.


In the third week after launch, the week commencing 8 November, average daily sales ranged from about 75,000 to 85,000; by the end of last week average daily sales appeared to be hovering close to 70,000 to 73,000, according to industry sources.

Google in talks to buy Groupon?

According to Bloomberg Groupon has held secret acquisition talks with Google. Sources say the start-up is valued at $3bn!

Apple & News Corp working on iPad newspaper

Industry sources are reporting that Apple and News Corp have been working on a new digital newspaper that would be delivered exclusively on the Apple iPad.

This new newspaper is likely to be named Daily and it would not have a print or a web based edition.

They are likely to price it cheap at around 99 cents per issue.

Daily could be launched as early as later this month.

Sources say that Rupert Murdoch is very excited about this project as he believes that people spend more time with their portable devices on their beds and couch these days rather than on a regular computer for checking out news.

The rise and rise of e-books

Another signs that e-books have arrived: The New York Times announced Wednesday that it will publish e-book bestseller lists in fiction and nonfiction starting next year. The Times has been publishing bestseller lists since 1935, and though Publishers Weekly, the Los Angeles Times, and USA Today all keep lists as well, the Times’ is considered the industry standard. Janet Elder, the editor of news surveys and election analysis for the paper, says they have spent two years designing a system that tracks e-book sales. E-book sales rose nearly 190 percent in the first nine months of 2010 compared to the same period last year, according to the Association of American Publishers, driven by the growing popularity of the Amazon Kindle and the release of the Apple iPad.

This is a direct lift from our friend Tony Fish. Tony is one of the globes leading thinkers on digital priavcy, the author of several well received books including My Digital Footprint and he somehow finds time to runs the successful networking programme mashup.

New Social Rules for Living in a Digital Age

If we sit back and reflect on current digital services, such as social media, we could conclude they are a game e.g If Twitter is about getting the best quip of the day or providing some useful info,  Linkedin is about proving "my network is bigger than yours", and Facebook is about sharing that "I have a more interesting life than you"; then there must be some new rules for these new games, but what are they? Before we examine some suggested new rules, it is worth confirming and stating that all of the old/existing rules of social engagement are still valid, relevant and have not been washed away by this new digital age. A few examples of classic handed down rules that are timeless would include:-

1.       Don't gossip, make things up, slander, steal, pinch or lie

2.       Have evidence and be professional, factual, accurate, honest, and transparent

3.       Engage and treat others how you want to be treated yourself

4.       Opinions are personal, be gracious, open, respectful and accepting of differences

Whilst all the old rules of social engagement exist, regulation does need some "modernising" as democracy, understanding and technology have advanced significantly since they were written.  Examples of regulation that would appreciate some new impetus would include: Privacy, Identity, Liberty, Harm, Consequences, Ownership, Access and Rights.

Realities for living and surviving in a digital age

Here are my rather eclectic suggestions of New Rules that I have heard, picked up or created.  I am hoping you will add and refine this list.  You can add your comments to this list here - My Digital Footprint Blog

mashup* are also organising an evening debate on "new social rules" on November 24th - you can register here http://www.mashupevent.com/event/new-social-rules   

1.     Change your password to Facebook, Twitter and bank accounts etc before you change your boy/girl friend/ partner

2.     Don't sack/release/ make redundant the person, and then be held hostage, by the person who has the login/password for your corporate fan page, group, twitter account until many people have control/access.

3.     Have several persona's, this is not a sign of madness and you don't need to justify then to anyone.

4.     Hide your friends identities by using personal nick-names on your mobile, just in case a friend borrows it to text that person with some inappropriate message that may haunt you forever.

5.     No adult supervision will not lead to anarchy. The youth want to be somewhere (in a digital world) where they are in control

6.     Provide someone (you trust) with the knowledge how to access your accounts/ data after you die and what you want done with your data/ digital footprint. Be aware - it will go against every term and condition you have signed if you do this.

7.     Your password is the weakest point in your armour,

8.     Reputation is all you have and your name is a good identity - so don't abuse or loose either

9.     Make sure you realise that your digital footprint is worth more than your salary

10.    Everything you do can be recorded (stored) as sensors will be in all digital devices soon - ask yourself why and what use will the data be and to whom!

11.    Create a lot of rubbish data and cause confusion if you want to hide in plain sight. It is easy to find and hard to hide in a digital world if everyone is honest

12.    Determine what the terms "family" and "friends" mean to you before you accept others into your network(s)

13.    Un-friending is acceptable - being un-friended is a reality

14.    Learn the social (digital and physical) rules that apply to your group today but be aware they will be different tomorrow

15.    Privacy - It's all in the settings

16.    Digital has one speed - fast, there are no breaks but plenty of fuel

17.    Internet writing is in Ink, once out there - it is out there, there is no rubber (yet)

18.    Loyalty (to a service) is dead - you are free to your own boundaries

19.    Open means you don't want to hide and transparent means "it can be found" - but most people will not bother

20.    Branding is now personal and it is the new black

21.    Trust is the new king’s advisor – content still wears the trousers

22.    Free is not free - Engagement, Relationship and Conversation have a price

23.    FUD (Fear, Uncertainty and Doubt) are easier to sell

24.    Money in a digital world has less 'personal' value than real money and is closer to swopping chickens for potato's. Unlike cash, others are more prepared to cheat, lie, swindle and steal your digital money as it appears "virtual" and less actual. 

25.    Don't set up any direct debits to anything

26.    Don't let individuals buy web domains or set up accounts just to avoid the long corporate procedures and PO cycles.

27.     Interaction with the “screens of life” is the ultimate digital game being played. It is to get "content" from the dark bowels of a data warehouse onto your brightly lit screen

28.    Control is not in your hands

29.    Levels of damage and harm from digital engagement is currently lower that you may think

Back online

Aplogies for the silence in whats been the longest lapsed time since we started this blog 3 years ago. Back now and normal service is resumed

Blackberry tablet - the PlayBook

Hot on the heels of Samsung and others Blackberry officially entered the tablet market last night finally unveiling its own iPad killer - the PlayBook

Aimed squarly at professionals and enterprise users the 7 inch screened PlayBook looks and sounds impressive. 

Heres a picture.

For those of you that like to know whats under the bonnet heres a breakdown: 

The CPU is a dual-core 1GHz unit based on an ARM Cortex A9 architecture, and its screen is a 7-incher like many of the other upcoming iPad challengers. There's full multitouch and "gesture" support, 1GB of RAM and twin HD cameras--one facing forward for Web chat and videoconferencing reasons, and one facing back. The front-facing cam is three megapixels, and the rear is a five-megapixel one, and though RIM's press release seems to hint that both can do "HD" video recording. There's Wi-Fi N compatibility, Bluetooth 2.1, a micro USB slot (for standardized cell phone charger compatibility and syncing) and "charging contacts," which we assume are ready for a customized docking system. It also weighs "less than a pound" and has HDMI out for full 1080p video support.

We're excited by Blackberry's announcement - more competition the better we say as it will lower device costs and boosts uptake. The more tablets in the market means improved services,interactivity and greatly customer engagement. 

Also as an avid Blackberry user (it just works!) I'm a natural to get one of these as I just know it won't let me down and I'm prepared to compromise on the entertainment capabilities to safegaurd my professional needs.

US retail flees newspapers

Every now and then we publish a link of an article that we think is important and a 'must read'. This one comes from Refections of a Newsosaur, a blog written by Alan D Mutter. Alan'sblog is often featured here as it's a very good take on the US newspaper market.

The poll revealed below isn't great news for regional/local newspaper publishers as it shows an aggressive swift away from newspapers by local business. Perhaps not new news in trend terms but the level and extent is ominous. This news comes hard on the heals revenues being sucked out of local ad budgets by social shopping sites like Groupon.

http://newsosaur.blogspot.com/

What about the social shopping merchants?

Image by dominiccampbell via FlickrTodays we consider the other side of the Groupon social shopping business model namely the merchants themselves.

Its clear from all the hype around Groupon that social shopping is a cash cow --- for Groupon but how is for the merchants?

The challenge with the model as far as we see it isn’t making money for Groupon, but making money for its customers, the recession-pinched merchants giving away their products and services at a loss. The web is full of stories of merchants who have had negative experiences and have sufferred the consequences of suddently having too many customers (looking for a bargain).


Lets be honest for those of us that understand regional and local advertising we know that building sustainable partnerships with low-margin small businesses is hard; it probably involves some level of shared risk, with pricing based on long-term profits rather than short-term revenues. Groupon and the other social shopping 'me-toos' can do this if they want but currently the 50% revenue share is probably too expensive for the merchant in the long term.


We worry that the merchant is vulnerable in the current model  despite the cap 'control' element and the payment on success model. They still have to finance the deep discount.  And as we know discounting doesnt bring loyalty it brings thrill seekers on a once only basis. Might be good for getting customers to the door and short term cash flow but not for longer term profits.

Its here in part that we see an opportunity for local media companies. They understand small businesses having traded with them for many decades. They understand better than anyone the dynamics and realities of low-margin business and they well placed to fashion an equitable commercial agreement on a more sustainable basis.

One suggestion could be to develop activity that combines traditional classified ad formats with deal of the day activity. This sounds sensible to us as it covers revenue generation and the need to develop return customers and customer relationships.



Footnote:  we had heard that Groupon was curremtly only able to service 1 out 8 requests from merchants wanting to use the deal of the day service. There is obviously lots of demand out there and therefore a big opportunity for local media owners to do what they know how to do - namely deliver a tip top service business and readers alike for the long term

National Brands success with social shopping - Hazchem National Newspapers

Hot on the heels of The Gap's staggering success with social shopping juggernaut Groupon in the US (400,000 groupons were sold and $11m of revenue was generated) its the turn of Virgin America to try out the deal-of-the day platform and generate huge success of their own.
Partnering with Loopt (the location-based social mapping service that allows individuals to use their location to discover the world around them) Virgin America offerred people two-for-one tickets to Cancun or Los Cabos from California. The offer proved a smash with consumers and Virgin America recorded its fifth highest revenue day ever.
This is significant stuff. It illustrates that the deal-of-the -day mechanic which uptil now has been the exclusive domain of regional and local brands can work for national brands on a countrywide basis!
We've blogged here on the threat from the rise of social shopping to local and regional newspaper groups advertising revenues but maybe national newspapers should be worried too? How long will it be before Groupon or livingsocial start offerring national deals in the UK and why wouldnt they it looks like great money!!

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.

Online TV - the reality

With all the hype surrounding online TV I thought it would be worth putting some stats around the hyperbole.

According to Nielsen people watch 3 hours of online video per month compared with 158 hours of old-style TV.

There you go.....

Groupon - its spreading fast

Is anyone else out there tracking the rise of Groupon? It seems to be growing very fast in the UK. I judge this on my own personal experience. I signed up two or three months ago and just lately the service has gone from one rather poor and mostly irrelevant 'deal of the day' to at least 6 really good deals a day. I mean good enough to take advantage of.

So what is Groupon? It's official tag is that its the 'leading social commerce site' or put another way its the 'leading social shopping site' or even 'collective buying'.

Ok but what does that all mean? Well actually its a pretty simple concept. You sign up for the service. The service emails you a deal of the day (or many actually). If you like the deal and want it you pay upfront. The deal only takes effect if the specified number of customers buy-in (thats the social bit). The deals expire after a day.

So why so popular?

Well for merchants its a results driven no cost ad meduim (they dont charge up front, it shares the proceeds)and for punters its another targetted deep discount channel.

We are very interested in what the effect of this fast growing meduim will be on business. There are clearly opportunities for media owners to joint forces with Groupon to leverage the hyper local ad market (or to offer their own perhaps?)

More on the opportunities and challenges posed by Groupon soon, but in the meanwhile watch this space.

Defination of a tech start-up

Reid Hoffman founder of Linkedin coined the definitive description of a technology start up. It is, he says, like 'throwing yourself off a cliff and trying to assemble a plane on the way down'

pretty appropriate defination we say

and if you are involved in the tech patent business we could add ".......whilst monkeys try and steel all your tools"

e-book Milestone

Amazon has announced that sales of digital books for its e-reader, the kindle has outstripped US sales of hardbacks on its website for the first time.

Amazon has sold 143 digital books for every 100 hardbacks sold over last 3 months.

Does this spell the end of the musty old book shop? Well it appears not. The growth of ebooks is not damaging sales of physical books. According to the Association of American Publishers, hardback sales are still growing in the US, up 22% this year.

The US market is 2 to 3 years ahead of UK where digital books are still small. The kindle has only been available here since October and it still has to be shipped from US. The books catalogue is available only through the US site and the books are priced in dollars. That said the US market dynamics must be a sign of things to come here.

iPhone 4 flies of the shelves

Shoppers in the United States, UK, France and Germany bought 1.7m iPhone 4s in the three days after they went on sales on June 24th.

By comparison the iPhone 3GS sold 1m in it's first weekend of sales in 2009.

Battle for online content hots up

Couple of interesting developments in the battle for online content:

Rupert Murdoch has acquired Skiff from Hearst and a stake in Journalism Online. These two deals are significant because Skiff is an online store for content and an e-reader and Journalism Online is a platform that alllows content producers to charge for content. This is clearly Mr Murdoch buying up the pieces or building blocks required to let people buy and enjoy content online from a wide range of producers over a wide range of access devices. Sound strategy

Google looks likely to launch its own content payment platform newspass. This was rumoured last year but now it appears that its happening and will be live by end of the years according to PaidContent.org.

As the battle hots up the race is on to get the access platform and the payment technology out there and adopted by consumers. Who would you back to win that race?