business-to-business under the traditional media model. “Now newspapers are trying to figure out consumer-based revenue.”
To combat old media’s antediluvian thinking, Kalb says Analog Analytics developed a “best business practices” program that helps its media partners focus on consumer-based revenue. The company also provides traffic analytics and techniques for search engine optimization.
The company’s technology also enables a publisher to provide a daily deal offered by a local merchant or advertiser, or to syndicate deals—enabling far greater distribution. In a frequently cited example, Analog Analytics says one of its publishers, The Orange County Register, offered a heavily discounted deal in March—$34 for a round-trip excursion from Newport Beach, CA, to Catalina Island. The offer set a single-day record, selling 5,457 round-trip tickets in 24 hours and generating $188,000 in sales. By syndicating the deal, however, Kalb says the offer generated an additional $32,000 in sales outside the region.
Such extraordinary consumer response has not become commonplace for Analog Analytics, Kalb concedes. But he says, “we are getting more and more deals like that,” and he views the company’s media partners as an advantage as the number of competitors proliferate. By some estimates, 500 companies now offer Groupon-type deals.
“It’s relatively easy to start a social coupon company,” Kalb says. “But it’s much harder to build a massively scalable platform that can provide social coupons to millions of consumers across hundreds of websites. At the end of the day it’s a cloud-based service, and the guys who have scale will be the ones who survive.”
And what are the implications of Groupon’s IPO?
“It says to the world that there’s a lot of money to be had with daily deals,” Kalb says.
