FROM THE AUG. 1 ISSUE: What’s next for local marketing in Canada
July 29, 2011 | Matt Semansky | Comments
Geo-local marketing options will continue to grow and diversify, giving small businesses more opportunities to improve sales—and more headaches trying to figure it all out. Here’s where to stake your claim in the coming months.
POINT-OF-SALE HELP: Bee Media
This Canadian company launched its pilot project with a Canadian Tire outlet in downtown Toronto in April. Bee Media representatives intercepted roughly 2,000 customers, 70% of whom opted in to the mobile-based platform. On subsequent visits to the store, Bee Media’s Wi-Fi signal was detected by the smartphones of consumers who opted in. These shoppers could then access information about current offers and promotions for that location, using their mobile browser. In addition to the retailer, brands themselves can hit shoppers with ads via Bee Media. “Our real point of difference is that we’re providing offers to consumers while they’re shopping, at the point of decision,” says David Peres, chief marketing officer.
He adds that “70% of purchase decisions are made at point of sale, so this becomes the most valuable advertising real estate because it’s just prior to a purchase being made and the last chance to communicate with the consumer.” Peres says the Canadian Tire dealer compared Bee Media to having additional sales associates on the store floor.
Bee Media’s service costs about $200 per month, and the company is currently working on developing iPhone and Blackberry apps to complement its browser and Android app accessibility.
More relevant to small businesses, however, is Bee Media’s plan to launch a plug-and-play Wi-Fi device later this year. Dubbed Myhive, the device allows independent merchants to make their shops a part of the Bee Media network. Owners can send deal notifications to the smartphones of customers in the area, while Bee Media can send third-party advertiser content the same way, sharing the revenue from these ads with each “hive” operator. Small businesses previously dependent entirely on sales can therefore enjoy a two-way revenue stream from both customers and advertisers–revenue that offsets part of the $60 monthly cost of Myhive.
SELL NEARBY: Placecast
This San Francisco company plans to enter Canada this fall. Its ShopAlerts program involves “geo-fencing”—creating a virtual perimeter around a store and offering deals and promotions to opted-in consumers who pass into the designated area via their mobiles. And since not everyone has a smartphone, ShopAlerts delivers these messages through SMS and MMS texts, not apps.
Apps are “problematic for a number of reasons, one of which is that they only work on smartphones, and usually for geo-location features to work the app has to be on,” says Alistair Goodman, CEO of Placecast. “That can also drain the battery fairly quickly, so there are some technology hurdles associated with that.” SMS, on the other hand, presents fewer platform hurdles and cuts through the mobile clutter. The New York Times has reported that 97% of text messages are opened, 83% within an hour.
To receive ShopAlerts, consumers must first opt in to receive messages from retailers, then opt in to share their location to receive geo-targeted promotions. At the opt-in stage, consumers can also indicate particular interests, such as food or entertainment, to ensure more personalized communications.
Which is not to say that Placecast doesn’t do apps. “The platform can also support other people who are building these applications,” says Goodman, pointing out that his company can be a partner, rather than a competitor, for Groupon-type companies.
Placecast doesn’t administer ShopAlerts directly. Instead, it partners with mobile carriers such as AT&T in the U.S. The carriers then give their customers the chance to opt in to ShopAlerts. Goodman says his company is currently in the process of looking for carrier partners in Canada.
Toronto-based company CellFlare introduced its own geo-fencing program in Canada last year, partnering with, among others, the Canadian National Exhibition, on an initiative that saw patrons of the event receive promotional messages from Ex vendors upon entering the event grounds.
ENHANCED FAVE: Groupon Now
While new players flood the market, the relative veterans of the geo-local space continue to refine their offerings. Brand new from the daily deal website Groupon, for example, is Groupon Now, a variation of the service that targets consumers with local, timely offers. Groupon registrants can visit the Groupon.com/now website and punch in their current location to find deals around them. Groupon’s smartphone apps automatically determine user location for those who have the apps turned on.
Groupon Now launched in Chicago earlier this spring and has since expanded to about 20 markets, including Vancouver, where it debuted in mid-June. Among the businesses that have taken advantage thus far are the Pacific Breeze Winery, which offered a wine tasting for two for $5 between 4 – 8 p.m. one Monday in July.
“Groupon Now is a real-time, instant listing of deals, so it gives merchants the opportunity to turn a deal on or off just for their slower times of the day or the week,” says Groupon’s Chad Nason. What’s more, Nason says merchants typically take a higher share of revenue with Groupon Now offers than with “traditional” Groupon deals.
LESS COMMISSION: Everybody Buys
Responding to some of the complaints about the revenue-share models of daily deal providers, EverybodyBuys.com has tweaked the group-buying concept. The Toronto-based company does offer a rev-share option, but takes a lower percentage from offers than other deal sites. It also recently introduced “Buy Here, Save There,” a variation in which consumers buy the deal directly from EverybodyBuys.com for a flat fee of a few dollars.
The upshot? Rather than waiting to be paid their share of the revenue, à la Groupon, merchants take 100% of the proceeds from deal-related sales up front. “The merchant pays nothing. We negotiate the discount with the merchant and offer that on our website, and our customers in our database get e-mailed the special offer,” says Mitch Sibonney, partner at EverybodyBuys.com. For example, the website sold a voucher for Toronto’s Vika Spa for $2, which entitled purchasers to get a manicure-pedicure for $25 instead of the regular $65 price. “(Vika) gets to keep the whole $25. If they ran this discount with Groupon or another site, they might get to keep $12.50.”