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JT buys JV - something's afoot in Channel Islands digital media

05/04/2013 | Matthew Robins

Jersey Voucher

Now that the dust's settled a little on the recent news about Jersey Telecom's acquisition of Jersey Voucher, here are a few observations on what it might mean for digital media in the Channel Islands.

The daily deal website industry has arguably been the single fastest growing e-commerce phenomenon in the history of the internet. The company that really put the concept in the minds of consumers, Groupon, was launched under four and a half years ago, and was valued at $1.35 billion by an interim investment round just 17 months later.

But the story hasn't been non-stop clover for Groupon since then. It has garnered a great deal of negative press coverage due to criticism from aggrieved merchants and media commentators alike, and it's true that the pure daily deal business model is susceptible to criticism both operationally and strategically.

But despite the very public criticisms of Groupon, it remains the case that daily deal sites are incredibly powerful marketing platforms for businesses that understand how to make best use of them to achieve their marketing objectives.

The trail-blazer in the Channel Islands market has been QuidsIn.com, which has made a particular virtue of the strength of its team of advisers in Jersey and Guernsey, who help merchants to get the very best from the platform. Jersey Voucher joined the market a few months after QuidsIn started up, and seems to have adopted the same approach.

It's a peculiarity of the Channel Islands market that businesses are exposed to very high PR risk if they mess up, and this has driven QuidsIn and Jersey Voucher to arguably take a longer term view than the likes of Groupon of the way they interact with both merchants and the public. 

I think that the merchants using QuidsIn and Jersey Voucher have therefore probably had a more human and humane experience than those using Groupon and the other international players, who have made no impact on the Channel Islands daily deal market. 

Both QI and JV have achieved very substantially social media followings and apparently gained loyalty from regular merchant clients.

So, is Jersey Voucher a good investment for JT? 

It's hard to comment about how well JV fits with JT's global strategy, but it is easier to look at it in the context of their Channel Islands market activities.

They already have, in JTInsight, the only classified advertising platform in Jersey that presents a serious threat to the long-established market leader, the Jersey Evening Post. Insight also offers the default digital phone and business directory for Jersey. It's easy to think of JT as a just telecoms company, but it is actually also a prolific digital publishing business, notably for Jersey.

Like the main print publishing business operating in Jersey (Guiton Group) and the other commercial publishers (CTV and Channel 103) JT seeks a return on its publishing activities through advertising revenues. Unlike Guiton, CTV and 103, JT has just taken a real step forward into the current state of the art in "advertising" through this acquisition of Jersey Voucher.

Traditional publishing businesses, whether print or broadcast, are falling behind the evolving marketing expectations of businesses. The publishers, and the print media in particular, need to acknowledge that technology offers them the opportunity to sell advertisers what they really want: measurable sales, not just visibility. Google has long recognised this, which is why Google Adwords and all other forms of online "pay per click" advertising took off like a rocket and have grown continuously at the expense of traditional advertising channels for years. (See this article from MarketingCharts.com for more info on online advertising spend growth and their prediction that online spend will exceed print spend globally by 2015.) We know from our own experience of managing digital ad campaigns for Webreality clients that when advertisers taste the accountability of online advertising, that part of their marketing budget never goes back into traditional media.

Daily deal sites are actually intensely effective socially-driven digital advertising businesses, generating measurable sales for advertisers, and are therefore potentially of great interest to digital publishers who want to continue to be able to generate income from advertising.  

If JT's objective for its Jersey digital publishing operation is to offer advertisers the most potent suite of marketing tools available, it needed to develop a more powerful product than the rudimentary display advertising opportunities it has so far offered through JTInsight. In that respect, a daily deal site was an obvious addition to the armoury, so to a large extent the acquisition should be no surprise.

The acquisition of Jersey Voucher was a private deal with no published value, so it's hard to comment further on the commercial wisdom of JT's acquisition, but all media eyes will now be on the JT/JV tie-up to see how well JT executes the integration of JV's business with JTInsight and its existing advertising sales operation.

It might be regarded retrospectively as the moment that JT stole a serious march on its publishing competitors. 

Disclosure: Webreality has a shareholding interest in QuidsIn.