Donnahill's List: Tippr

• the premier provider of group buying solutions, today   announced it has expanded the TIPPR Affiliate   Network, a program aimed at driving incremental sales for publishers   using TIPPR’s white-label daily deal platform. TIPPR’s Affiliate Network   boosts the exposure of merchant daily deals beyond existing publisher   audiences to a network of 1,000 websites around the U.S., including   major blogs, deal aggregators, and social media sites.

• “At the end of the day, we want to see our daily deal   initiatives result in more visibility, more site traffic and more   purchasers – and extending our offers through TIPPR’s Affiliate Network   puts Belo’s brand in front of millions of consumers beyond our existing   audience, plain and simple.”

    

    Unlike costly direct brand building initiatives like national   advertising campaigns, TIPPR’s white-label platform and extensive   Affiliate Network reaches targeted new purchasers and converts them into   loyal subscribers at a fraction of the cost. TIPPR’s Affiliate Network   serves as a megaphone, broadcasting offers through web sites and   applications that reach over 100 million unique visitors per month and   helping publishers earn upwards of 15 percent in incremental revenue.   The TIPPR platform is currently the only white-label daily deal   technology capable of providing publishers with increased offer   exposure, free customer acquisition opportunities, technology   innovation, deal sourcing and unmatched distribution. 

   

    “Group buying is growing up, and we are in an exciting stage of   transformation where the white-label model is maturing and publishers

• TIPPR: Quality of Audience Is What Matters in the Deals Space
• deals platform and technology providers like Tippr are stepping in to the fray with new models to power group buying.
• 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

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  Paul Reid, Need lots

  

  I think the key differentiator is that Tippr has a sustainable business model (with or without the patents) and that LivingSocial have the Amazon relationship. I can't see how Groupon can maintain their growth with such high customer acquisition costs and low retention numbers.
  
  Crucially as a small business cashflow is king and with Google paying merchants 80% on 4 days why would I wait 90 days on Groupon.

• The addition of Google Offers to our affiliate network provides merchants with valuable exposure, while also giving Google Offers subscribers access to extremely targeted offers. Google Offers has everything it takes to achieve group buying success – a loyal and targeted audience and familiar environment, coupled with enormous industry credibility.”
• “We launched Google Offers to give people access to great deals and help drive more business to merchants. By partnering with TIPPR, we have expanded our collection of offers thus giving subscribers more choice and greater variety for deals in their area.”

• Tobias claims Tippr is now the top platform provider for software and deals.

     

  "And that’s opposite of what Groupon is doing, which is spending lots of money on customer acquisition and sales forces,” Tobias says. “We believe the daily deal industry is going to evolve into a network of publishers just as advertising moved to the ad-click business.
• “I’m going to wait and see how those two other guys do,” Tobias said. “We don’t comment on financials, but we're growing quite well and if I were filing to go public you would be happy to read my S1.”

• ippr CEO Martin Tobias says the daily deal company's affiliate program now lets publishers who use its white-label platform services disburse their own deals and get more revenues.

• Groupon
  Daily deals are now distributed in more than 100 cities and can earn partners up to 20 percent commissions through the Commission Junction affiliate network. Affiliates can simply install geo-targeted widgets or smart links onto their sites. The company’s now famous Gap coupon, its first national deal, reached more than 800,000 sales and was going at a rate of 10 per second at one poin
• LivingSocial
  Widely referred to as Groupon’s closest competitor in the space, LivingSocial receives about 20 percent of the overall traffic from daily deal-seekers. Affiliate partners can choose from an assortment of links and banners provided by LivingSocial and have them customized to match the look and feel of their own pages, earning cash for every sale made from their site.
• Tippr
  Tippr provides a full range of services for its partners so as not to compromise the uniqueness of their own sites and content. From the technical to the creative to merchant coordination and payment processing, Tippr’s team does most of the work so its affiliates can run their businesses and websites.

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• Groupon was the first to develop the bargain-middleman system and, according to Forbes magazine, they are “the fastest growing company ever”. Some analysts estimate Groupon’s present value at $15 billion. So it sounds like they made the right decision, when they turned down Google’s six billion dollar offer to buy them.

• Christmas came early for Groupon on Friday when its IPO blew it out of the water and shut up (at least briefly) many of the daily deal giant’s critics. A 31% increase in stock price and valuation of $12.7 billion puts Groupon second only to Google on the list of most successful tech IPOs–an impressive feat in the face of all the scrutiny Groupon has faced over these past months.But as the confetti settles and the champagne goes flat, what does it all mean for the future of Groupon and the industry it created? History gives 3 hints:

   

  1.  It validates the daily deal industry.

   

  While red flags remain in Groupon’s specific business model, the successful IPO of the industry’s leader forces the market to recognize it and other players.
• who made the market perk up and pay attention to the space. Then came some company called Google, Ask Jeeves, and a multitude of others. In fact, Russian search giant Yandex IPO-ed in May to an $11 billion valuation. Groupon’s success sets the stage for other daily deal players to be taken seriously and carve out a niche of the market for their own. This IPO is not a happy ending for daily deal industry. It’s a happy beginning .

• Tippr offers customized, white-label daily deals for web publishers. Publishers can choose from deals sourced by Tippr's sales team, and the two split the revenue.
• The sort of distribution the Tippr and competitors like Adility are doing makes a lot of sense. Publishers, especially those operating in well defined niches, can offer deals that are more consistently relevant to their readers than deals on a general mailing list like Groupon's, leading to much better conversion rates. Many local newspapers have already started offering daily deals, on their own or through partnership with Groupon clones.

• Actually sourcing original deals is a hassle, and outside the core competency of publishers. Furthermore, because deals originating with a service like Tippr's can be promoted across many different sites, a publisher too small to sell out deals on its own can still offer them.

  So if you're sick of Groupon-type deals, and are waiting for the craze to die out, we have bad news: daily deals are coming soon to all your favorite websites.
• Dealo provides the first and only software-as-a-service platform that allows anyone to launch their own, all inclusive, online "One Deal at a Time" ecommerce store, and sell anything, products or services, one deal at a time. Etailers, manufacturers, distributors, wholesalers, brick and mortar retailers, ebayers, and service providers can use the "One Deal at a Time" model to introduce factors that motivate individuals to act on an opportunity, including scarcity and social proof. In the ODAT model, the opportunity is available for a limited time or there is a limited quantity, introducing scarcity. Also, the ODAT model provides visibility that others are acting in a similar manner and purchasing the deal, introducing social proof.

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• ince then, it has become the third largest daily deals site in the U.S. after Groupon and LivingSocial. Tippr covers 13 cities, with more in the works.

• Groupon is the Chicago-based goliath of online “group buying” that seemingly came out of nowhere to raise $135 million last month at a company valuation north of $1 billion; at last count, it had some 270 employees
• Tippr is the Seattle-based social discount voucher site that got started in February, led by entrepreneur and investor Martin Tobias (pictured above right), and has about 20 employees. The key is, it’s trying to play a different game.
• What Tippr does is offer discount vouchers online for local stores and services, such as restaurants, hair salons, and cleaning and repair shops. As more people sign up, the savings per consumer increases, in a process called dynamic pricing (or an “accelerating deal”). Tobias says Groupon and LivingSocial don’t have that. “We bring new features to the market,” he say
• Tippr also seems more focused on small businesses than its competitors are. “We’re in the business of helping merchants, rather than just making ourselves a buck,” Tobias says. “It’s such a big win-win for both the consumer and the merchant. It is a great business model.”
• “Groupon is building a brand. We’re building software.” What he means is that Groupon has positioned itself as a consumer brand and category leader, and other competitors are playing catch-up. Tobias says he is trying to capitalize on a different model and approach. “Tippr is creating a platform to allow other publishers and other providers to be in the daily deal business,” he says. Seattle Magazine, for example, has formed a partnership with Tippr to put a “deal widget” on its website so its readers can see daily deals. Tobias says this sort of affiliate relationship will help drive Tippr’s traffic in the next three to six months.
• Tobias also counts his previous CEO experience as a competitive advantage. The former head of Seattle-area companies Imperium Renewables and Loudeye Technologies—and Kashless, which spawned Tippr—points out that Groupon used to have expiration dates for its vouchers, which he says is illegal in 28 states and led to a recent lawsuit in Illinois (which was settled last month). “At Tippr, there are no expiration dates,” Tobias says. “We follow all the rules.”

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• I think the key differentiator is that Tippr has a sustainable business model (with or without the patents) and that LivingSocial have the Amazon relationship. I can't see how Groupon can maintain their growth with such high customer acquisition costs and low retention numbers.
  
  Crucially as a small business cashflow is king and with Google paying merchants 80% on 4 days why would I wait 90 days on Groupon.

• Tippr was launched by Martin Tobias, former CEO of Imperium Renewables, a company that has struggled in recent years. Tobias says his latest venture is well-positioned to succeed in the red hot discount coupon sector because of its patents covering group buying and its unique business model.
• The patents cover broad swathes of the business such as “demand aggregation through online buying groups,“ and were acquired from Paul Allen’s Vulcan Capital. It acquired the patents in connection with its support of Mercata, a group buying venture that collapsed during the dot-com bust. The company believes that many of its competitors are in violation of the patents. In December, the company announced its decision to license its patent portfolio to interested independent software developers, deal sites or publishers. The company says “numerous companies” are already licensing its patents.
• Another Tippr advantage, Tobias says, is its “white-label” strategy of offering a technology platform on which businesses can offer their own service. Skylar Agnew, a founder of BestSeattleBars.com, for example, is in the business of promoting bars. Agnew is using the Tippr technology platform to offer his own discount coupon service. The coupons he distributes will carry the name of his company, thereby promoting his brand instead of the brand of Groupon or LivingSocial.
• Tippr currently has 50 employees, up from five when it was launched early last year, and has aggressive plans for growth. With online giants like Amazon and Google eager to get into the business, will Tobias consider selling? He won’t say. What he does say is: “I was born in Seattle. I will die in Seattle. The company will stay here.

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