If you’ve shopped online at all in the past 4 years, you’re probably familiar with RetailMeNot.com.
The online coupon aggregator generates millions of page views each month and enjoys top Google ranking for almost every “_______ coupon” query.
How Profitable is RetailMeNot?
This is a company that literally prints money — an estimated $30 million in 2010. Most of their content is user-generated, they get loads of free traffic, and they earn commissions on thousands of stores across the web.
In 2010, RetailMeNot was acquired by Whale Shark Media for an undisclosed sum (some estimates go as high as $90 million!
At the time they had just 5 employees. Think about that, 5 employees, a microscopic cost structure, and $30 million in revenue.
The Controversy Around RetailMeNot
But their success has not come without controversy. Because anyone can post a coupon, some affiliates saw their “exclusive” codes being shared on the site, and quickly found out that in couponing-2.0, exclusive deals with stores didn’t mean much anymore.
One common problem for coupon sites is that the customer 9 times out of 10 is already at the store checking out. All they need now is the money-saving code and they’re good to go.
But if the coupon site simply displays the code, they won’t get any commission on the sale. It would be like giving the answers away for free.
That’s why you see all sorts of creative “click here to redeem,” “click to reveal,” “click here to see code” type statements — all of which work, but make sure to open a new tab for the store with RetailMeNot’s affiliate cookie set, which lets them get credit for the sale. (It also overwrites any previous affiliate cookie.)
Personally I don’t have a problem with these types of calls to action — they’re obviously providing some value to customers so it’s ok for them to get paid for it. Others call it dubious or unethical or cookie-stuffing. These tactics have probably cost me thousands of dollars over the past few years, but it just means I should have done a better job closing myself.
The other controversial tactic is posting coupons that aren’t really coupons at all.
You’ll see this all the time with certain coupon sites advertising “free shipping — click here” — nevermind that the store offers free shipping all the time anyway. It’s purely an excuse to try and insert their affiliate cookie and make money on a transaction that was probably going to happen already.
Still, nothing but kudos to the team at RetailMeNot — a very innovative approach to an old business model. Maybe they push the envelope a little bit but while the other coupon sites complain, they’re busy laughing all the way to the bank.