This is the reason we built DailyRed to help media companies stay in the game.

Newspapers, meet Groupon

[Insert decline of the newspaper industry history, followed by commentary on their lack of embracing the Web here]. With all that said, I was pleased to discover a bit of a glimmer of hope coming out of one newspaper, specifically the San Diego Union-Tribune (disclosure: I recently worked in their interactive ad division).

They recently jumped on the Groupon/LivingSocial/group buying bandwagon and, like the aforementioned companies, have experienced some rather immediate, impressive results. How impressive? Try $175,000 in revenue in 24 hours from just one deal posted. Needless to say, they’re going to continue to explore this revenue stream.

Their group buying experiment has been with a good crowd, too: 35-54, income over $75k, and upwardly mobile with kids. It makes sense for them to jump in: it goes with the “hyperlocal” theme, they can drive a lot of traffic to the deals and the costs are minimal in running it on the backend.

My one worry: what happens when brands don’t need the middle man for group buying? When a company builds a network of 30k-60k on Facebook alone, they’ll already have the audience. It won’t take much to code in the ability for group buying into existing sales systems, either (get on it already, Salesforce).

The point is that companies will soon have the audience and ability to do this themselves, and newspapers will be stuck again looking for a new idea to borrow to survive for a while. And, to be honest, that point has already been reached for a lot of brands, but on a local level it has a ways to go, so I hope more local newspapers capitalize on the opportunity while it lasts.

Hire for intellect not experience

Someone with no experience but intelligence will always perform better than someone with experience. Sure the person without experience will make mistakes but they will be able to learn from those mistakes with a greater resolve.

Dedicate resources to the core product

We could have divided the work load and have one of the developers work on the corporate site but it really wasn’t the best use of time since we need to demo it pretty soon. Since Eric and Kevin are pretty well versed in the land of HTML, we got them going on setting up the pages in html. The other added benefit of this approach is that they can see their changes live on their machines instead of going through a middle layer (developers or a CMS system).

Distribute work load

In every development project, there always seem to be a time where it is development heavy (bulk of the work effort is placed on the development of the product). In this scenario, what better way to utilize the resources that we have and pull them in to do the development work themselves.

Furthermore, copy changes and simple mark-up can be handled by the business team for the time being, allowing the developers to solely concentrate on the product.  There might be a time in the future where the developer’s time will be engaged to help out with sales pitches or marketing efforts, and this distribution of workload is reversed.

Simplify the problem at hand

I think all developers at some point in time over engineered and over analyzed a situation. Having limited time and resources puts you into a room that forces you be creative. Instead of spending the time developing/designing the site, we needed to think of what is the least amount of effort for the developers to get the job completed. For example, instead of designing or even finding a designer, we went to themeforest and purchased a theme to use as our base. From that moment, Eric and Kevin are off and running filling the site with content and images. Once they are satisfied with the end product, I just copied those files, fixed a few things and deployed it to our new front end site.

I am sure that the above is not only a representation of website design but other elements of what we are doing. Having everybody seemingly become closer to the development of the product will improve Eric and Kevin ability to land new deals or keep our clients happy!

In this interview (embedded below) with the WSJ it is quite clear where Groupon is heading.

“Groupon is really a city guide, a way for people to discover interesting, hidden gems in the city, and the deal is a mechanism that nudges people toward trying something, toward doing something instead of just reading about it”

Groupon is entering shark infested waters with that statement.  City Guides are a huge business that include some giant companies in the print media business.  It sounds like there is an arms race brewing against Groupon (the Mega-Global) and the Deep-seeded Traditional Media businesses.

Who will win?

My money is on the local publishers, as Andrew states, Groupon’s real advantage is offering the right deals in the right locals.  Who better to know the right deals then the companies that live, breath and rely on them.

Media agencies and their relationships with advertisers is very one-sided.  Businesses take all the risk and pay all the costs without the slightest pretense that any reward will come of it.  The vast majority of ad campaigns  do not directly show their value.

Ad Agencies should share in the risk and the reward!

I watched a talk by two Irish guys today about breaking conventions in how you do things on your site. For example with sign up, the convention says grab as many details as possible before letting a user try your app, by breaking conventions you just let anyone use your app, then if they like ask for them to sign up.

The challenge with breaking convention is if you don’t do it right then your site is just poorly designed.

I guess that only leaves one option…you should only break the rules, if you already know them.

I recently discovered the power of A/B testing when I saw the site visualwebsiteoptimizer.com it made me realize the power of idea generation and rapid prototyping,  to be able to validate an idea within days of initial concept is something I have never seen in the large corporations I have worked for. It just makes so much sense. As we build out our idea I am excited to share the tests we are running

t it’s core the internet is about bringing people together, the intersection of multiple parties in a single virtual location. To us Aggregation sites are built on that very essence, so when i hear “Aggregation sites are created by people that couldn’t cut it themselves,” i question that person’s motive on the internet.   We are an aggregation site, and we are proud of it.  This is our contribution to the web

Aggregation is all about bringing together relevant information to people that have similar interests.  If you look at The Wizard of Oz the reason Dorthy, the Tin Man, Cowardly Lion and the Scarecrow came together was for the achievement of the same goal, reaching the Wizard.

The ironic thing about DailyRed is that we are not only aggregating deals from other sites we are aggregating aggregation deals.  Let me explain, collective buying is all about coming together in one place to get the best deal, i.e. Aggregation.

Lots of sites fear aggregation and treat them as competitors but aggregation sites act as the gatekeeper to the sites with the actual content.  Some of the most successful sites/web concepts are aggregators:

• All Search Engine – don’t actually contain content just the gatekeepers
• Newspapers – Although each adds its own content most “International” sections are composed of externally written articles.  Just take a look at the Metro you read everyday
• Torrents – Bringing together people to share illegal content
• Feed readers like Google News, iGoogle, Yahoo homepage

Launched in November 2008, Groupon features a daily deal on the best stuff to do, see, eat, and buy in a variety of cities across the United States. We have about 200 wonderful people working in our Chicago office (a handful of whom you can see to your right), along with a smattering of people in Groupon’s other cities.

Our company philosophy is pretty simple: we treat our customers the way we like to be treated. That boils down to a few key things:

1. We sell stuff we want to buy
2. No BS
3. Unbelievable customer service

Now that the formalities are over lets take the gloves off and see whats inside Groupon:

Quick Stats:

• 225 employees, 84 open positions, 65% are Male, 25% are Account Executives (aka Sales)
• HQ located in Chicago
• Total Dollars Saved: $182,459,384
• Total Groupons bought 4,536,776

groupon has also used some clever advertising along the way with liveoffgroupon and groupoupon. they have been on every major news network except Oprah.

So what can we learn from Groupon?

Get on the today show!