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Groupon $$$ = Shortsighted?

Abacast’s Jim Kott argues that stations should use care

Jim Kott knows that some radio stations allow Groupon, the local “social” ad purveyor, to place its widget in their streamcasts.

He thinks they are being penny-wise and pound-foolish.

Abacast is a provider of online radio services, among other things. Kott is vice president of products and marketing; he wrote about Groupon in a blog item titled “Radio Stations Shooting Themselves in the Foot by Hosting Groupon Widget.”

He considers Groupon a competitor to local stations, redirecting or absorbing local ad dollars in a way that eventually will be detrimental to those very stations.

Noting that Groupon collects e-mail addresses of visitors, he said: “A database of listeners is one of the most valuable assets of stations, possibly as valuable as the very license they have for their terrestrial signal. And here they’re just handing that asset to a competitor.”

He concluded: “The Groupon widget may seem like easy money via the affiliate fees received when listeners sign up with Groupon, but they are empowering a direct competitor, handing over the relationship of the listener to Groupon, and over time will deplete the ad budgets from local businesses that radio depends on.”