Hearst-Owned Magazines Launching Daily Deals With Group Commerce
Hearst-owned magazines are treading on Groupon’s territory with the launch of group-buying discounts, starting off with Road & Track and Car and Driver.
Hearst will be using a platform built for big media publishers by Group Commerce, a New York-based company founded by former Google and DoubleClick executives David Rosenblatt, Jonty Kelt and Andrew Glenn.
The offers, which will start rolling out later this summer, will primarily target the male-dominated audiences of the two magazine brands. Later, Hearst will expand it to other demographics through such well-known magazine properties as Marie Claire, Cosmopolitan and Esquire.
So far, Group Commerce has launched with other major media outlets, such as DailyCandy, Thrillist and the New York Times. It has raised $18.5 million in capital and grown to 75 employees since officially launching in March. In all, its network of publishers is already reaching 15 million subscribers who have signed up to receive deals.
Rob Houghlin, the publisher and chief revenue officer of Car and Driver and Road & Track, said they’ve been looking at doing something in the social commerce space over the past four or five years.
“It’s a brand new way to connect some of our advertisers with our most trusted asset — our users,” he said. “Advertisers are looking for new ways to talk to current and potential customers. They don’t want to move distressed products, but they want to offer special products to consumers who want it. It’s a platform of credibility first and value second.”
The deals will be promoted through the magazines and through other online experiences, such as newsletters, blogs, Facebook pages, Twitter feeds and mobile applications.
Some of the initial offerings include a custom product bundle from Gladiator Garage, which sells workbenches and storage units for garages, and an exclusive Corvette driving school package at Spring Mountain Motorsports Ranch in Nevada.
Kelt, who is the CEO of Group Commerce, said the company will be working with Hearst to get all of its magazines up and running with deals by the end of the year. He said the magazines serve perfect niches that can be catered to.
“The whole premise of our business is that relevance is really important,” he said. “The media companies have strong vertical titles and know who their reader is.”
Kelt said there are two distinct advantages to partnering with publishers: The cost of acquiring customers is much lower because they already have the readers and combining offers alongside content can be particularly powerful.
If you think about it, newspapers have always had content and advertising — from classifieds to display ads — that people have been interested in. That will likely be the company’s only hope if it wants to contend with the massive marketing machines already assembled by Groupon and LivingSocial.
“Great content is really powerful, but great content with great commerce is even more powerful,” Kelt said. “You’ll be more engaged and more valuable than if you just had content from that brand.”
Here’s a mock-up of how the deals will look on Road & Track. This is not a final version, obviously: