The Associated Press today launched a service for newspaper mobile apps to advertise bargains to their readers. iCircular
hopes to offset lower insert advertising revenue caused by decreased circulation by utilizing the technology and strategies developed, perfected and used by daily deal services like Groupon and LivingSocial.
According the Wall Street Journal
"ICircular is meant to be the digital equivalent of coupons and other promotions that are inserted into the print editions of weekend newspapers. Those ads are among the most popular parts of Sunday newspapers. A study by the Newspaper Association of America found nearly three-fourths of readers check advertising inserts, mostly to find out about sales.
"So far, newspapers' digital advertising growth hasn't been nearly enough to compensate for the downturn in print advertising. Last year, for instance, print advertising at U.S. newspapers totaled $22.8 billion and digital advertising was $3 billion. In 2005, U.S. newspapers got $47.4 billion from print ads and $2 billion from the digital side, according to the Newspaper Association of America.
The AP has been hurt, too, because a large chunk of its revenue comes from newspapers. Driven in part by newspaper fee reductions, the AP's revenue has fallen from a peak of $748 million in 2008 to $630 million last year."
40 newspapers have agreed to use the service in their mobile apps including the Los Angeles Times, Chicago Tribune and San Francisco Chronicle. Nearly a couple dozen major retailers, including Target and and Macy's, have committed to running ads in iCircular. The service will be free to participating retailers during its trail period expected to last through the end of the year.
Like Groupon and LivingSocial, the newspapers' mobile apps will be able to pinpoint a user's location (assuming permission has been granted) and show nearby bargains.