In the wake of Groupon’s recent S1 and the subsequent wave of criticism that has been aimed at the daily deals giant, deals platform and technology providers like Tippr are stepping in to the fray with new models to power group buying.
How did Tippr end up in the platform business?
A lot of people go to Tippr.com and they see a Groupon clone and figure that’s what it is now or that’s what it was and that we simply pivoted. But we have always had the intent to be a platform technology provider to power the daily deals industry. The reason why we have Tippr.com is to be a lab environment where we can try new things without making our customers our guinea pigs. So we can try a lot of things that publishers may be reticent to try. The other way that Tippr serves us is that it’s a place where we can source deals — and all of our publishers want deals. So in addition to be a lab environment, Tippr is a place where we can source deals, run them, and take the good ones and share them with our customers.
Can you give an example of a recent innovation?
We were asked by some publishers about chat — online chat — and does having a staffed chat when your looking at a deal improve the conversions? So we integrated that into our products, staffed it with our own people, and rolled it out on Tippr.com and we gathered data for a month. What we found was that it actually did improve the conversion, but the cost of doing it didn’t make sense for a ten-dollar voucher. But it turns out, if it’s a $1,000 voucher — we have $1,000-plus vouchers for vacations — that cost is very worthwhile.
What types of companies are integrating deals into their content?
There are the traditional publishers like Fox and NBC and Belo; they have television, newspaper or radio audiences. Those are one segment. Another segment is new media. That’s typically website traffic, but it can also be reviews and email distribution companies. We have another bucket with a couple publishers doing well in this category that are actually blogs or Facebook pages. We have one customer, “365 Things To Do in Austin, Texas.” She has 155,000 followers on her Facebook page, accumulative impressions when she posts a deal is over 500,000 impressions, a real audience and entirely on Facebook.
Most business owners would much rather sell a smaller number of vouchers to a much higher quality of audience, than the reverse. Selling 200,000 vouchers to deal seekers is not nearly as valuable as selling 500 [vouchers] to people that are right up your alley and not making a decision because of price.
If you’re a local merchant deciding between Groupon and a content provider to run a deal, why go with a publisher?
Fundamentally, the overwhelming advantage is in the quality of the audience. Most business owners would much rather sell a smaller number of vouchers to a much higher quality of audience, than the reverse. Selling 200,000 vouchers to deal seekers is not nearly as valuable as selling 500 [vouchers] to people that are right up your alley and not making a decision because of price.
The other reason that a publisher’s audience will improve the economics is that what the Groupon S1 did is that it pulled back the covers. What it’s showing is a very interesting and potentially very profitable business if it were not for one thing: the customer acquisition cost. The reason why our business has accelerated since the Groupon IPO is that many people are looking at this and are saying, “Wow, I don’t need to acquire an audience — I already have one. If I could drop that line item out of the financial statement, I could be more competitive, share more money with my merchants, and I can bring a higher audience.” All things in the right directions.
What sets Tippr apart from your competitors in the deals space?
There are a handful of things. One of them is that we have hands-on experience operating a site. And that’s actually quite useful because we have real experiences to share with our clients. We have another product offering called the Tippr Offer Marketplace. It’s an exchange, literally a place where sales agencies like yellow book or entertainment book or others can go celebrate deal and put it into our exchange. Our publishers can then go into our exchange and say, “I want a great restaurant in Detroit on Wednesday” and they can browse deals, pick the ones they click, and run them. We help them with what they see as the most difficult thing: finding deals.
We also own a portfolio of group buying patents, which our clients get to enjoy as well. Finally, we have an affiliate network. We have about 700 affiliate sites. These are everyone from large sites like Yahoo and Bing, all the way down to mommy blogs in your city; they take our deals and drive traffic to our publishers. By virtue of being on our platform, they can sell more vouchers on a given day because we give them more exposure.
This interview has been edited for length and clarity.