Circulars (the advertising inserts with coupons from local retailers) are still critical to revenues for local newspapers. In an effort to bring them into the digital age, a consortium of some of the largest media conglomerates are investing another $14.5 million into Wanderful Media, to bring them to mobile devices.
The new round brings Wanderful’s total funding to over $50 million from investors including Advance Digital, A. H. Belo Corporation, Community Newspaper Holdings Inc., Cox Media Group, The E. W. Scripps Company, Gannett Co., Inc., GateHouse Media, Inc., Graham Holdings Co., Hearst Corporation, Lee Enterprises, MediaNews Group and The McClatchy Company.
The new financing also coincides with the launch of Wanderful’s Find&Save app for android devices. The company launched in 2013 with an app for the iOS platform.
“We made a decision last year of really making a bet on the iPhone and Android platforms and bringing this content to people based on where they’re at,” says chief executive Ben Smith.
The Los Gatos, Calif.-based company operates the shopping tabs on several newspapers’ Web sites like The San Francisco Chronicle and the Dallas Morning News. Smith compares media companies’ investment in Wanderful Media to similar investments in sites like Cars.com.
Since its launch the company, which was formed with a $22 million investment in 2012, has generated less than $10 million in revenue, says Smith. “Our content is put in front of 100 million monthly uniques,” he says. “We’re the shopping portion of every large newspaper in the country.”
Smith, who previously served as the chief executive at MerchantCircle, was recruited by Gannet and Hearst in 2012 to help launch Wanderful Media. “I… gave them the perspective that I thought they were going down the wrong pipe,” says Smith. “If the web was going to reinvent retail shopping it would have happened in 2001 and 2002. We needed to go hard toward mobile and tablet.”
Wanderful manages advertising relationships with large national retailers, but relies on regional newspapers to manage relationships with local and regional retailers, according to Smith. “A paper like the Houston Chronicle: their revenue cut if this plays out will be millions of dollars per month,” says Smith.
The realization for big media companies is that newspapers no longer control the shopping experience or the car buying experience. “They have to build new audiences because they lost the audiences they had in the past,” Smith says.
Several other sites and apps have launched to improve on local sales and discounts. Earlier this year Coupons.com went public with its online coupon and rebate service. Sequoia Capital has backed Shopular , which is pitching a similar application for consumers.
Wanderful is rolling out new features in addition to its availability on android devices. The company is also launching location-based services for both android and iOS devices.
Photo via Flickr user Carol Pyles