Group Commerce CEO: Monetization of Local Content Is Still Evolving
Much of the conversation at Business Insider’s Social Commerce Summit on Tuesday in New York seemed to center on the growing intersection between content and commerce. From large brands building content sites to promote loyalty and engagement to local media companies like CBS Local aligning content with ecommerce ventures, the topic #contentcommerce came up again and again.
Strategy around local appears to be increasingly moving away from the novelty of daily deals, and toward a broader conversation about local commerce. And while there seems to be a notable decrease in the number entrepreneurs pitching pureplay deal startups, existing media brands continue to be interested in creating deals products. A range of white label ecommerce solutions have emerged over the past year to power ecommerce integrations on media sites, and with daily deal hype finally settling down, many are building out a wider array of products.
In a conversation with Street Fight, Group Commerce CEO Jonty Kelt stressed that the daily deal was only the beginning for local online commerce — comparing the state of the local commerce to evolution of the digital advertising space over the past decade.
“In the late 1990’s, Yahoo and AOL controlled about 80 percent of the U.S. display advertising market,” explained Kelt. “Today that market has grown by twelve or thirteen times. It’s a 20 billion industry in the U.S., and AOL and Yahoo have less than 20 percent.” Kelt says that he sees the local commerce space evolving in a similar fashion, with the pureplay providers like Groupon and Living Social controlling a minority segment while local and vertical media brands step in to fill out the majority of the market.
“Great content is powerful, but if you add great commerce alongside that then the total product is exponentially more powerful.” — Group Commerce CEO Jonty Kelt
The “deals” industry will remain, but Kelt says he believes that a far larger opportunity exists in expanding commerce to the vast network of media properties that have authority and infrastructure in niche markets.
“The majority of our customers have a digital ad business that they’ve been building since the late 1990’s, and they don’t want to cannibalize it,” said Kelt. “However, they are also recognizing that there are additional ways for them to monetize their digital audience.”
Kelt says local media’s big advantage is in the existing, long-standing advertising relationships — as well the critical authority that newspapers and television stations have in their respective markets. The concern expressed by Kelt and others, is that companies leverage this authority correctly — namely, by treating commerce in the same manner as content. “Great content is powerful, but if you add great commerce alongside that then the total product is exponentially more powerful.”
According to Kelt, Group Commerce is currently in the process of building a “lite” version of its platform for smaller media plays like community blogs and independent hyperlocal sites. The product remains in development and should be ready for market by mid-year.
Steven Jacobs is an associate editor at Street Fight.
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