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Deal Current helps businesses online

Deal Current Network, a private-label daily-deal software company, is giving away valuable tech tips through a campaign called Take Back Local.

Its executives are teaching local owners of businesses ranging from tour companies to yoga studios how to improve their online marketing.

San Diego-based Deal Current's e-commerce platform for daily deals, gift certificates and coupon marketing is used by about 100 media companies nationwide, including NBC and the Pittsburgh Post-Gazette.

“Anyone who needs a deal or coupon platform,” said Jimmy Hendricks, chief executive officer and co-founder of Deal Current.

The campaign was born when Deal Current’s media clients voiced the need to educate its advertisers -- small businesses such as restaurants, spas and retail stores -- about online best practices.

The company’s survey last fall of 17,000 merchants revealed that many businesses are clueless when it comes to the basics of online marketing.

As a result, Deal Current decided to hold a string of seminars targeting business owners and marketing directors that have run a daily deal or coupon in the San Diego market.

“In the last three years Groupon and LivingSocial abused a lot of the merchants,” Hendricks said. “If you give people a lot of ways to run their business effectively, they will have more money to spend on things like advertising."

In addition to learning about simple website design, seminar attendees learn how to land their website on the first page of Google, rather than paying an SEO company to do the same.

Businesses also get a rundown on the San Diego daily deal and coupon space, how to make coupons work for their business, and performance-based coupons versus flat-rate coupons.

Companies also get tips on trading services with media groups for advertising.

Prime-trade candidates include lower-margin consumer businesses, such as a boutique that can trade gift certificates in exchange for TV ads.

“Then (you) let the media company sell those to make money. We want to educate business owners that that is an option," Hendricks said.

The first seminar, in February, had 65 attendees at One America Plaza. The landlord, The Irvine Co., offered free space.

Deal Current will move its headquarters in June from Little Italy to the nearby skyscraper at 600 W. Broadway, doubling its square footage.

Two more seminars will be held in March and April, and depending on demand, they could continue monthly.

“We feel it’s a way for us to build a relationship with people without selling them something," he said.

The hope is that pleased seminar attendees will refer other businesses back to Deal Current and its media clients.

The campaign will be developed in San Diego for six months and then piloted in such markets as Pittsburgh or Miami, where Deal Current has clients.

“The goal is to put together a local playbook and give it to our clients for them to use in other markets,” he said.

The company’s team of 13 is looking for local sales reps to work with merchants and plans to hire software engineers in the summer.

The campaign initially launched with an "anti-LivingSocial and Groupon" message, but that was toned down to avoid legal fallout.

Despite Deal Current's head-to-head competition with the daily coupon giants, the company isn't on their acquisition list.

“They couldn’t buy us because we are technically enabling their competitors,” Hendricks said.

His company raised $700,000 last year from San Diego members of the Tech Coast Angels and Scottsdale, Ariz.-based Canal Partners, and expects to break into profitability in the next four months.

Other companies haven't been as lucky in the crowded daily deal software segment. A year ago, Deal Current had about 10 competitors, but those numbers are dwindling.

In January, Group Commerce laid off 28 percent of its staff, according to several reports. Carlsbad-based Analog Analytics was bought by Barclays Group PLC last year and hasn't been as heavy in the space since.

Deal Current’s remaining top competitor that also offers an e-commerce product is St. Louis-based Second Street Media Solutions.

About a dozen TV, radio and newspaper media clients are signing up each month for Deal Current, Hendricks said.

The company is considering a pilot program next quarter with restaurant rewards program Mogl.

“You can sign up for Mogl as part of buying a deal through one of our media companies,” he said. “We have a great offers product and Mogl has a great loyalty product."

One of the challenges Daily Current faces in signing clients is the fact that online revenues sometimes aren't a large part of the bottom line.

“If a TV station is making $50 million in a San Diego market, they are only doing half a million or $1 million in online,” he said. “So the roadblock we have is getting them to invest in the future.”

Deal Current's selling point is that it has a fully hosted service that makes it easy for the media companies.

“They are not technology companies -- they don’t want to invest in support," he said. "They want to sell advertising and products that are useful, that fit their audience."

The companies investing online are sticking around, he said, citing The New York Times' strong paywall revenues.

“It showed there is value in content. Some people act like media is going to die tomorrow – it’s just going to slowly transition online,” he said.

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3 UserComments
Patrick Dillon 10:17am March 12, 2013

One key point that I want to make here is the importance a lot of media companies overlook in their own core offering, and what we're trying to incorporate into our messaging with the Take Back Local training. We're trying to teach advertisers to recognize the value of our client's radio, television, print or direct mail offerings IN ADDITION TO the basic traffic and email distribution of the programs we help create. If advertising really still is about touch points, which classically has always been the case, then our clients win in the long run over companies like Groupon, Living Social and others that are reliant on one touch point (your daily Groupon email). If that's true then advertisers should stick with our clients.

Anna Diaz-Kelleher 8:47am March 12, 2013

Reading this article has made me do the happy dance! You can't argue with free, and if the deal with Mogl goes through, it does nothing but tap any business owner into a network of savvy high spending professionals with an extended network. Besides, you'd be doing business Mo T., the coolest bulldog in town.

Andy 7:18pm March 11, 2013

exciting things happening for the Deal Current team. Well done guys!