It has been announced that Stealthedeal is said to close down by the 3rd week of July. A surprise? Kind of. Stealthedeal is owned and operated by the folks at Sunmedia, a Quebecor company. Is it really a surprise that such a large media company has had trouble making this venture work? Yes and no. Yes, because their team was committed to making it work, had the resources, the audience and the direction. No, because, like most media companies, either you are fully invested in digital media and local commerce (like Torstar) or you dip your toe in it. If you dip your toe, it is just a matter of time before someone pulls the plug.
Why did Sunmedia not succeed with Stealthedeal? I cannot tell you for sure. What I see though is from a consumer and marketing standpoint, it does not seem as if they promoted Stealthedeal to the large audience base as much as they could have. Torstar promotes Wagjag everywhere across their properties. In the US, larger media companies have done a decent job promoting and embedding deals into their interaction with their audience. In contrast, I rarely saw a stealthedeal promotion embedded in Sunmedia’ huge canoe.ca site. Simply putting up a banner ad will not cut it. Promoting Deals needs to be embedded in consumer interaction at many levels. It is disappointing to know that with an audience like the one Sunmedia has access to (Edmonton Sun , Calgary Sun, Toronto Sun, Winnipeg Sun, Ottawa Sun, Journal de Montreal, Canoe.ca, etc) that it had a hard time connecting with its audience.
Is this the end of DEALS and Sunmedia? Do not count on it. I have suggested it before and have advised other media companies on the strategy of adopting an aggregator model for themselves instead providing their own deals. A deals aggregator model would certainly benefit and work well with a media company’s operations and need for an audience. Sunmedia would do well if they promoted offers to their audience across properties like canoe.ca, If you want to know whether a deal site is in trouble, then look at how often they post deals and look at how often they post LOCAL deals. Those sites that post more and more online and product deals are having a hard time making the venture work with Local merchants. It is far easier to post 20 products for sale from a distributor than it is convincing 2 local merchants to run deals. Stealthedeal hasn’t exactly filled their inventory over the past 4 months with local offers…instead, steadily adding more and more products.
Let’s look at other comparisons.
Torstar: they operate Wagjag, Jaunt and still have an equity interest in Tuango. They are the most successful media company in the deals space.
Rogers: they operate rdeals. They got off to a slow start but seem committed to the venture. I anticipate that they will eventually be a force across the country. I also anticipate that they will eventually buy a deal site in order to help expand.
PostMedia: they operate Swarmjam. Postmedia, like sunmedia, has also had some difficulty connecting with their audiences across the country. I believe that Postmedia will also make a decision to either sell, launch and aggregator, partner with an existing deal company or probably also follow Sunmedia and shutdown SwarmJam. Postmedia could be a force in this industry, but I would suggest they focus on their audience and launch and aggregator site instead. They’ll make more money.
Transcontinental: The operate the Mega Catch. It seems that TransCon has been in testing mode of the deals business for over a year now. Given their audience and their operational realities, I highly recommend they promote aggregated deals as opposed to promoting their own deals and expanding a sales force across the country. They do not seem as committed to this venture as one would hope.
Bell Media: A new player in this industry ever since they bought out Astral Media. They operate Astral Radio Deals. It seems that their model is working for them. Once Bell Media expands the model, it should do even better throughout properties like Sympatico and other TV and radio stations.
Yellow Pages: The operate DealoftheDay from Red flag Deals. Deal of the Day should be absolutely leading this deals business in this country. With Yellow Pages’ having relationships with over 300,000 local merchants and with the consumer reach that they have and that Red Flag Deals have, it is a big surprise to me that they are not one of the leaders in the country. Although they have done well in integrating their deals business into their other media properties, the Yellow Pages is also in severe financial difficulty and selling assets to help with their financial issues. So I doubt that they would invest in expanding their Deals Business and instead it would not be surprising if Deal of The Day was sold this year given their financial issues. They would probably keep Red flag Deals, but sell DOTD to a Deals business that can grow it better. Although the main advantage of DOTD is the merchant relationships that the Yellow Pages can tap into and the large audiences that Red Flag Deals can reach. I do not see DOTD being sold for an amount that the Yellow Pages would want unless the acquisition comes with a partnership with the Yellow Pages and Red Flag Deals.
Glacier Media: They operate Dealmate.ca. They have not grown Dealmate all that much and it is surprising that it is still on life support.
Given the above, who are the leading media companies in the deals space in Canada a year from now? Torstar, Rogers, Bell Media.
Deal sites like Teambuy, Buytopia, Tuango, Dealfind, among others have no embedded media audience to count on and they would love to have access to Sunmedia’s audience. Perhaps a partnership between one of these entities and Sunmedia may work, perhaps not. But what is certain is that deals are NOT going away. What is going away are the companies that promote them, leaving the field closed to only a handful of solid competitors that can really deliver inventory from local merchants and online/product deals. All other media companies should partner with these deal companies and aggregate deals to their audience instead of promoting their own. Their operational structure simply cannot handle building a deals company that can compete with the other leaders in the country. Media companies with such huge audiences will mostly likely make more profit by aggregating deals than by promoting their own.
As for Sunmedia, well, I highly doubt that we will see the last of them in the Deals business. It just makes sense to offer deals to consumers, to their audience and I fully expect them to do just that in the form of an aggregator. Although I do not know for certain. Offering aggregated deals of all kinds to the audience enables an audience to stay on your site, or to count on your site for deal inventory. These consumers are going somewhere else to search for deals anyway, might as well keep them on your site and increase page views, advertising rates and affiliate commissions from deals sold.
Like other industries, namely the Media business in the US and Canada. Where there was once 20-40 competing companies there are now just a handful that own 90% of the content. This will also be the case in the deals business. There will be a handful of firms that will own the Deal inventory production and the Media companies can do what they do best, reach a huge audience. They will use this Deal inventory that someone else provided and provide those deals to their huge audiences. It’s inevitable and happens in every industry that matures. Ours is no different.
