Groupon has a roaring head start in the deals of the day category for groups, with more than a million users. We’ll hear all about Groupon from CEO Andrew Mason at next week’s Marketplaces conference in San Diego, where he is keynoting. But there are now countless imitators adding their own deals.

New York-based 8Coupons.com, which aggregates coupons from content partners such as Valpak, Money Mailer and RedPlum’s SuperCoups, has now put them all together in one spot (great idea). 8Coupons launched the top 10 U.S. cities last month, and now has 55 different Group Buying “Deals of the Day” Web sites in 100 cities. Based on what we are hearing around the industry, many more sites are likely to enter the space soon.

The “Flash e-commerce” space got hotter today, as Washington, D.C.-based LivingSocial announced a new $30 million round led by U.S. Venture Partners. Grotech Ventures and Revolution (Steve Case’s company) are also participating.

The funding will be used to launch deal-a-day coupon sites in Chicago, Denver/Boulder, Raleigh-Durham and San Diego. These cities are actually live today, along with Atlanta, Austin, Boston, Los Angeles, Minneapolis-St. Paul, New York, San Francisco, Seattle and Washington, D.C.

LivingSocial got its start with Visual Bookshelf on Facebook, and has launched some additional applications since then (i.e., “Find a Happy Hour,” “Pick Your Five”). The company appears mostly focused, however, on the hot Deal a Day space, where it competes with Groupon, which has raised a total of $34.7 million, as well as a host of similarly themed providers (and many more on the way).

Last August, CEO and cofounder Tim O’Shaughnessy told us he sees the LivingSocial deals as “a huge opportunity” to market to customers based on their pronounced online preferences, and to take those preferences offline.

Coupons are hot in a down economy, and printable online coupons — and even mobile coupons — are gaining share in the coupon business. But local SMBs aren’t always in on the game, as coupon sites frequently gravitate toward one-stop national accounts.

Now, Analog Analytics, a San Diego-based vendor, is pushing a clever mobile solution that allows online local publishers to feature display ads that have SMS promotion codes built in. Consumers show the coupon on their phones to retailers for conversion.

Use of the mobile coupon provides complete analytics (impressions, clickthrough rates, texts, e-mail and conversions). Among the 850 publishers currently working with the solution are MediaNews Group, Village Voice Media, Local.com, Wick Communications, Freedom Interactive and The San Diego Reader. More than 25,000 ads are being supported, and the company has just expanded beyond the U.S. with a new Australian operation. Chinese operations are currently being eyed.

Company founder Ken Kalb, a longtime search vet, says the mobile coupon solution is the natural successor to low click display campaigns. The engagement of a local promotion typically boosts clickthrough rates by 2 percent to 10 percent — 10 times higher than national online ads. Revenues might see a 20 percent to 30 percent boost within six weeks of launching.

Kalb notes that the coupons are sold via local sales forces, or alternatively, via a self-serve platform. Affiliate marketing programs from other online coupon companies just aren’t a good alternative, he says. They typically pay just three cents per click. They also don’t offer much support for local advertisers in terms of analytics or upsells.

In fact, Analog’s self-serve platform also offers an upsell gift certificate program, which brings in immediate revenues for advertiser and publisher alike, as well as the “Bigger, Better Deal,” a daily promotion special. It also encourages frequent updating of ad copy and promotions. The platform also enables the development of opt-in marketing lists.

Is it too soon for mobile coupons on a mass media basis? It might be. As a backup, Analog Analytics does support print-out options. But this solution is an interesting one that might bring a source of renewed interest for local media companies. They continue to bring in more eyeballs than other media on their Web sites, but often have a hard time proving their value.

Analog Analytics CEO Ken Kalb is a featured speaker at Marketplaces 2010. He’s on the “Back to Square One: Refocus on Revenues” panel with Adicio Chief Alliance Officer Tony Lee and Matchbin CEO Reed Brown.

I had the opportunity to speak with Michael Pastko, CEO of Coupious a Boulder, Colorado-based mobile coupon platform. Coupious got its start when Pastko and his partner leveraged their experience at Purdue University to launch a Coupious iPhone application in Lafayette, Indiana. While the duo did very little marketing, word-of-mouth marketing helped push their mobile application to potential users. Push seems to be the operative word with Coupious since its model does not push coupons to people based on their geography, but rather allows people to seek on-demand the just-in-time promotional offers relevant to them when they want them and where they want them. Many of its initial customers utilize the platform to run multiple promotions or post “just-in-time” offers to get rid of seasonal items or to push specific menu items.

“In order to win over local businesses, the goal was to replicate the print coupon model to help make it familiar and comfortable to select,” says Pastko. However, unlike print coupons, mobile promotions on Coupious can track the number of impressions, what promotional offerings are performing better and most importantly where impressions are taking place. As Pastko points out, “being able to locate where people are downloading or viewing promotional offerings allows advertisers to understand if consumers are looking at the point of sale, responding to an outdoor billboard, or are in areas of town that might offer new potential for the business.”

While college towns in the Midwest have been a successful launching ground for Coupious, traditional media groups such as newspapers have become the major focus in the past 12 months. Pastko has been careful about his growth plans seeking markets where Coupious can gain a high density of coupons and promotional offerings. “One of the biggest success factors is having enough content to make the application useful. Just like directories, if the restaurants and entertainment venues people expect to see are not in the database of offerings, then people’s desire to use the application decreases significantly.” Coupious’ model is not to aggregate coupons or scrape the Web for other offers, but to deal directly with the advertisers in the market. Pastko is quick to point out that “this gives consumers confidence that this is a legitimate offer and will be honored locally.”

When asked if the recent surge in coupons is a trend born out of the slow economy, Pastko said “coupons and promotional offers are in a trend phase now but the space is going through a transformative revolution where offers will not simply be coupons but will become promotions embedded within key messages making them more relevant and highly geotargeted to the users location. The mobile platform is the ideal device to deliver just-in-time offers, reaching people where they are and when they have a specific need. It’s up to mobile coupon companies to continue to innovate and embed offers within other media to further increase adoption and usage.”

The Coupious application is currently available on the iPhone and Android platforms with work under way to broaden to other application platforms.

Three years ago, BIA/Kelsey created the Marketplaces research program and conference because we saw that local advertising was quickly “verticalizing.” Indeed, money and talent have poured in for the new breed of vertical products that would take their place among existing vertical success stories, such as AutoTrader, Cars.com, Realtor.com and ServiceMagic.

The Marketplaces 2010 conference reveals just how fast the industry has evolved. This year’s event, now under construction, is set to highlight all the major trends in Marketplaces, including:

• AOL’s $50 million investment in Patch.com, and ongoing transformation of its Mediaglow vertical properties (and Mapquest)
• eBay’s renewed efforts to build up classifieds as entry-level e-commerce via Kijiji, eBay Motors and other services
• Examiner.com’s  big bet on local/vertical content, and its network of 26,000 “examiners.”
• Groupon’s “smart mob” theory of local commerce, backed by a $32 million investment, that allows hundreds to make a volume purchase of local services and products.
• Redbeacon, AlikeList and others’ efforts to remake ServiceMagic-like home and trade leads with social media
• Adify and Pulse360’s  bid to verticalize ad networks for local merchants and national brands
• OpenTable’s big bet on mobile to let diners make reservations wherever they are.

The two-day conference takes full advantage of its location in sunny San Diego. It includes rich research presentations, top-flight demos of the latest services, and a preconference showcasing all the best tools of Marketplaces 2010. Come to San Diego March 22-24 to learn, enjoy the unbeatable networking and participate. You can register at early-bird rates here.

CONFIRMED SPEAKERS (in Alpha)

• Ethan Anderson, CEO, Redbeacon
• Jeff Beard, CEO, Localeze
• Rick Blair, CEO, Examiner.com
• Jon Brod, EVP, AOL*
• Craig Donato, CEO, Oodle
• Jim Delli Santi, CEO, AlikeList
• Todd Dubner, SVP, NCI
• Russ Fradin, CEO, Adify
• Krista Glotzbach, VP, Vast.com
• Mark Goldstein, Chairman, Loyalty Labs
• Martin Herbst, GM, Kijiji U.S., eBay
• Scott Jampol, Senior Director, Marketing, OpenTable
• Jaan Janes, CEO, Pulse 360
• David Kidder, CEO, Clickable
• Steve Larsen, CEO, CallSpark
• Andrew Mason, CEO, GroupOn*
• Colin Pape, CEO, ShopCity
• Ben Saren, CEO, CitySquares
• Craig Smith, President, ServiceMagic
• Mat Stover, CEO, Local Matters
• David Vazdauskas, President, Local Thunder

*keynote

Being in the local media space, each New Year I reflect on my buying habits of the past 12 months and how I found local businesses. This year I realized that I used a wider variety of media than in the past to find local service providers including the following: Angie’s List for a housecleaning service; the print Yellow Pages for an exterminator and a garage door repair; a door hanger for a carpet cleaner; a mass e-mail blast from a local salon for a new hairstylist; direct mail coupon for an oil change and so on. However, perhaps the most intriguing local media player I used this year was Groupon.

A friend sent me a link to register for Groupon so she could rack up $10 credits on Groupon.com. I began receiving offers over e-mail and passively looked at them until the deal I didn’t know I was longing for popped into my inbox: a New Year’s Eve package for two at the Westin with a room, dinner, drinks and dancing for $149!

To prep for my big night with my husband (don’t have too many of those with two young kids), I went to the nail salon to get primped. I had never been to this salon before (which I found out about via my local Mommies Network) and my new manicurist, Kimberley, asked what my plans were for bringing in 2010. I said we were going to a party at the Westin. She immediately replied — did you buy the Groupon deal? I replied that I did and she began to tell me that her salon was participating in a Groupon deal the very next day — a manicure and pedicure for $25. We began talking about Groupon and here are her thoughts: “They’re marketing geniuses. They’re going to deliver me 300 customers with one e-mail.” And, in fact, she was right — Groupon sold 352 manicure/pedicure packages for the salon.

I began polling my acquaintances about Groupon and can’t believe that they’d never mentioned their deals to me previously — as if I would be encroaching on their good deal territory. One friend bought five deals to a local Indian restaurant while another bought three manicure/pedicure packages to another salon as holiday gifts.

I look forward to my Groupon’s each weekday and while I’ll pass on today’s $25 acupuncture deal and am still considering the $79 teeth whitening “side deal,” I’m looking forward to my next manicure/pedicure and the delivery of my organic fruit and vegetables — all things that I never would have purchased without being prompted by a simple e-mail. Will this replace my need to find a plumber, garage door repairman or gutter cleaner? Probably not. Point is, it’s getting people excited about receiving inbound marketing in a combination of a beat the clock game and a can’t-say-no reaction to a good deal all the while exposing them to mostly local small businesses that otherwise might fall between the cracks of traditional media.

I’m interested to see what the new year will bring for Groupon and its recent $30 million round of funding — partnerships, more cities, more deals and more competition, I’d bet … Also, interested to hear from my manicurist/salon owner what she thinks of the deal after the fact and if she’d do it again — did she make any money on her 57 percent discount on the service, plus the Groupon fee?

As someone interested in the local space, what media did you use in 2009 and did it change from prior years?

A new study by AOL’s Platform-A and Information Resources, Inc. reports that nearly 40 percent of shoppers would be very likely to use coupons accessed online. Additional findings from this survey indicate that, not surprisingly, newspaper coupons are most popular with older demographics (more than 80 percent of consumers aged 55 and older clip newspaper coupons).

The real surprise, though, is how much online coupons appeal to younger demo brackets. Of the 18- to 24-year-old bracket, 51 percent say they’d be very likely to use coupons presented to them online. For the 25- to 34-year-old bracket, this intention is 40 percent, still quite high.

Several players are getting in front of this curve. For example, as noted in an earlier post by analyst Mike Boland, Valpak is already doing online couponing; it’s now adding mobile access and making a specific push into online social networks — key haunts of the younger demos.

Clearly, a lot of online couponing will be for CPG (consumer packaged goods) offered by national companies. But we believe this also represents an intriguing opportunity for local businesses to rethink their promotional vehicles. According to Kelsey’s Local Commerce Monitor survey of small-business advertising, only 10 percent to 13 percent of SMBs use couponing (from the past three waves of LCM). Maybe this old format will be rethought by SMBs for the online space.

In an under-reported story, Valpak has begun to experiment with mobile distribution of its signature coupons. So far this has included an iPhone optimized Web site and next up could be a native iPhone app.

This could come at the right time, when the mobile Web continues to grow via smartphone penetration, falling device costs and better software standards. Online coupons haven’t gotten off the ground to the degree we all thought they would, but mobile comes without some adoption barriers (i.e., searching and printing before you leave the house).

Since the phone goes with you to the point of purchase, accessibility to a searchable database of geographically relevant coupons makes more sense. The immediacy of mobile search could also drive more qualified searches than what we see with online or print coupons (more of a push). In coupon language, this could translate to higher redemption rates.

Macroeconomic factors have meanwhile led to a boost in coupon demand. Online searches for coupons have increased and Scarborough Research estimates 11 percent of U.S. households use online coupons (compared with 35 percent mailed). This is up 83 percent since 2005, and Valpak overall saw roughly 10 percent growth in its coupon usage last year.

Valpak has also started to experiment with reaching users on social networks or popular online communications tools like Twitter. Twitter is beginning to show some promise as a way to target users interested in geotargeted commercial information. Others in the coupon world, such as Coupons.com, have also begun to use it.

With both mobile and social, the idea is to reach new users and give them more access points to the content. In both cases, it doesn’t scale as well as Valpak’s flagship direct mail coupons, but can equate to incremental distribution that is more targeted.

The results so far have been promising; with limited marketing, users have accessed about 140,000 Valpak mobile coupons in the past 30 days. Its direct mail operation meanwhile sends out 45 million geotargeted coupon envelopes per month.

_______

Update: Here is a video news clip on Valpak mobile.

Oodle CEO Craig Donato led off day three of Marketplaces 2009 describing how classified advertising has gone through an evolution over the past five years, progressing from simply importing them online, to making them searchable and finally today integrating classifieds with social media/user-generated content (UGC). Donato pointed out that while newspapers led the way in taking classifieds online, they have done poor job of adapting to the changing online needs to maintain a leadership role. Because of the ongoing change, new opportunities emerged for eBay and Craigslist, both of which clearly understood what both buyers and sellers wanted.

The current phase of classified is the merging of social tools and more transparency with listings revealing information like why an item is being put up for sale or why a particular home is a great family home and what visitors have liked best about the property. According to Donato, “Local advertisers need to get involved in the conversation because conversation builds credibility.”

What Oodle has tried to do is encourage local advertisers to create profiles on Facebook and MySpace so they can build their networks and get involved in supplying good information about their products, being open to answer questions, and to feed the latest specials or newest homes for sale as examples.

For local sites, Donato suggests that “it is less about how to work with Facebook and MySpace, but rather how the usefulness of their tools can be integrated into your sites.” The more local advertisers can get their customers and prospects engaged in conversations about their listings, the more valuable the listing and sites become. Social classifieds are yet another example of the required transparency consumers are seeking about both new and used classifieds on the Web, and it is now in the hands of sites like Oodle to provide the tools and education to help get people talking.

Promotional services that boost SMBs run the gamut from coupons to prizes. The most popular are free offers, discounts off total amounts, and prizes/free gifts, said Matchpoint CEO Peter Adams, who was speaking at Marketplaces 2009.

Adams noted that when companies are contacted by Matchpoint users, 25 percent respond with some kind of a promotional offer. “It is as high as 45 percent in certain categories,” he said. He also reported that the offers result in success, with more consumers considering purchases. Users, for their part, are seeking pricing and deals.

Services like Matchpoint are vital for SMBs to get engaged with promotions because they “lack time, tools and expertise,” said Adams. “They need help with offer creations. They need help getting the word out; they need help to work with their other marketing and advertising.”

Bogopod Founder and CEO Adam Leff, who was speaking on the same session, noted that online marketers have a strong chance of dislodging the $60 billion direct marketing industry. His company gives consumers “a different feeling than many directory experiences,” he said.

For businesses, Bogopod offers built-in loyalty systems, database development and integrated Web sites. Businesses can send “one convenient e-mail with hundreds of offers” — something he called “special offer optimization, or SOO.” “It is behavioral targeting with life-cycle offers.”