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Living Social

Q&A with LivingSocial UK managing director

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By The Drum Team, Editorial

June 18, 2010 | 9 min read

The Drum talks to LivingSocial UK managing director Peter Briffett about the impending launch of the new local advertising platform.

Could you give us some background on LivingSocial?

The company is about two-and-a-half years old and was set up to build social networking applications. As a consequence of that we designed Pic5 which became the most successfully popular Facebook application of all time. We then went onto build VisualBookshelf, which allowed users to share and review books with friends online. We had some incredibly successful social media applications, but the forefront of the business is now to run daily deals in cities through our social media networks. It’s essentially a new form of local advertising. It can guarantee customers to a merchant with no up front cost. It’s been a phenomenally successful concept and we’re growing incredibly quickly in the US and we’re very close to taking the concept to the UK and we’ll be rolling out the Daily Deals platform across the UK.

How widespread is the format in the US?

We started in Washinton DC, which is where the company is based and we’ve rolled out to 25 cities now, in multiple states and we’re growing extremely quickly. There’s nowhere that we’ve done this where it hasn’t worked extremely well. It’s a phenomenally successful way of being able to promote a local business. With our rich social media heritage, we are able to deliver this concept across multiple states. We are growing extremely fast and we’ll have most of the US covered in a short time.

What services does LivingSocial offer to attract advertisers?

Free advertising is the future of local advertising. For the first time in the history of marketing we can guarantee a merchant hundreds of new customers to their premises. Whereas Google changed everything with the pay per click model, we’ve taken that one step further, so instead of people looking at a business, we’re able to drive them into the business and we do that by offering daily deals to people for the best and brightest things to do within the city. The way that we run it through out social media platform is that it morphs and creates a huge word-of-mouth buzz for a business on a particular day. As a consequence of that it results in a surge of new customers, a huge amount of word-of-mouth and a growth of interest in their business. With the growth in social media over the last few years, we are able to deliver that now as it is a very powerful method of marketing.

Which social media platforms does the company use?

We use any social media platform. Obviously, primarily that is Facebook, but we spend a lot of time and effort before we enter a city in building up a list of subscribers that are socially connected. They are aware, they are affluent and they go out in the city, so we’re promoting to that core group who will allow you to get a lot of word-of-mouth going on through social networks.

What types of companies have you found have the most interest in using LivingSocial?

We try and offer a variety of very varied deals to our customers on a daily basis. That could be from anything such as the London Aquarium all the way through to a Spa or a restaurant or in-door sky diving. Restaurants and Spas tend to do extremely well, but there are a whole variety of different reasons for that so there are no business who couldn’t consider running this as long as we felt it was of use to our subscribers.

And you plan on initially launching primarily in London to begin with?

Yes, we will launch in the south east and then move into other cities in quite quick succession. I can’t say exactly when we launch but it will be in the next few weeks.

How long do you foresee rolling into the regions?

In some cases we’re reading to go now. We take the view that we need to have people on the ground, in the city that understand where the best places to go are, that have relationships with the merchants. We’re recruiting heavily now in different localities.

So there will be sales representatives in each area to promote the business?

That is correct, that is how we will operate. From our point of view, having personal relationship with merchant on the ground is an important part of our business model and also having people on the ground who know the city, know the best places to go and being able to offer that to our subscribers is very important. Key local knowledge is an essential part of delivering local advertising.

How big a team do you foresee you’ll have in place for the launch?

We’ll have numerous people in each city. There’s no where this hasn’t worked and in most cases we will probably target the larger, cosmopolitan cities first before rolling it out across Britain.

Do you foresee every city in Britain having a representative at some stage?

There’s no reason why, in the future, that won’t be the case.

What will drive people to the site?

The Daily deals from Living Social should be like receiving an Easter Egg or a Christmas present every day. We really want people to open that email every day and see something that they’ve always wanted to do. It’s about having high quality merchants on board and being able to promote the best and brightest things to do in a town is what tends to work. No one wants to receive ‘spam type’ emails on a daily basis. You want to be able to open that email and see something fantastic to do.

Are there brands already signed up to LivingSocial?

I can’t discuss who but yes, we have.

And what sort of reaction are you getting from them?

In most cases it has been positive. We can drive new customers to these businesses that ordinarily they would not have chosen to go and they have money to spend. For one day only we will promote a business, it’s only available for that day and it should generate huge interest and word-of-mouth. The merchants that we deal with in the US have seen a huge spike in their hits to their websites, their Twitter feeds, their Facebook pages as well as obviously offering them hundreds of new customers. It’s probably the lowest cost to them from any other form of advertising.

How do you charge customers then? Is this results based?

We put together an offer for the merchant to get people talking about it, to get people involved with it and of that offer price we take a commission and the rest of it is passed to the merchant after the deal has run.

Do you see this being a competitive market place for yourselves to enter?

This is a new concept. It’s proven to be an extremely successful concept. It’s a new space and there is a lot of competition with a lot of companies emerging, who are trying to do similar things. It’s becoming more competitive but we’re very confident of our model and the way that we deliver Daily Deals, but it is definitely becoming more competitive.

What are the targets set with the business?

In terms of where the business is going, we’re at the very beginning of this being a new form of local advertising. We’ll start doing Daily Deals and we’ll look to localise that more and more. We’ll be running deals across different areas and different neighbourhoods to give people what they want so if they want particular deals in their street then we should be able to offer that. It’s growing quickly, but the hyper-local approach is coming onboard now and is proving successful.

Is this where local advertising is going to go?

We all know that any business we deal with will say to us that word-of-mouth is their most powerful form of communication. We’ve found a way of delivering huge word-of-mouth for them and get everyone talking about them. We have everyone on a platform that allows word to spread extremely quickly and through the context it can spread extremely fast and why not use that for advertising your business? There is no better way than word of mouth.

What have media buyers been saying to you about the business?

It depends on the situation but we are talking to all sorts of different companies, from PR companies to media buyers, we’re speaking to a range of different companies about it.

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