Publishers try out Groupon-like daily deals

Posted by Leah McBride Mensching on August 26, 2010 at 4:12 PM

Groupon launched just under two years ago, and now publishers are trying out the same concept on their digital properties in order to forge new digital revenue streams. The Minneapolis-St. Paul Star Tribune last week released its first STeal, under which it offers an exclusive deal from a local business each day, MinnPost.com reported yesterday.

"If enough people buy, everyone gets the deal. Then you can print, redeem, repeat," the STeals page explains. The Star Tribune is just the latest to experiment with daily deals - so far the Washington Post, Zagat, Open Table, the SF Gate, Yelp, Gilt Group, and more have also done so, YipIt Blog reported. And, although STeals will be a small part of the Star Tribune's digital revenues, it is a promising new revenue stream that has long-term potential.

Groupon's revenue is expected to reach between US$300 million and $500 million this year, all because "they simply went out and created a distribution list of over nine million subscribers in local areas and negotiated deals on their behalf," YipIt noted.

So who else has the authority to recommend deals, and large audiences in their cities and regions? "Vertical focused newspapers, magazines and online properties ... In fact, I bet what keeps Groupon up at night isn't LivingSocial or the now 120+ other daily deal sites, it's the media companies with authority and an established audience."

The Star Tribune has spent this year researching the daily deal idea with advertisers and customers, and the newspaper's sales team has better relationships with local businesses than outside companies; therefore, and is more adept at building deals and long-term programmes that suit them, Jason Erdahl, executive director of digital, told MinnPost.com.