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December 19, 2008

Online coupons are getting more attention, and even adding mobile channels. But no single company has really broken through at the local level. They're largely for national franchises.

Longtime Move.com execs Adam Leff and David Bay clearly recognize the challenge, and the major opportunity in the local merchant space. Since February, they formed a company named Reach Pros, and have been building BogoPod, a new online site.

The site went online in July, starting with their affluent and cyber-savvy San Fernando Valley community of Westlake (JD Power, CallSource, Move). They hope to use the prototype around the country.

Leff, a longtime local ad exec instrumental in the development of Realtor.com (and before that, AdStar, Ad One and The LA Times) says the name comes from "Bogo," which women use as slang for "buy one, get one free." (I didn’t know).

"It resonates with customers." And the "pod" part of the name "just sounds techie."

Key to the service is that businesses will promote the site for them – similar to what CityVoter is doing with its "best of" ratings and review service. Businesses have email sign up and collection boxes, and hand out flyers in bags.

So far, sign up efforts and deals with businesses to use pre-existing email lists have won them a list of 50,000 email addresses. One reason businesses are inclined to hand over emails is that BogoPod is spam compliant (i.e. the service knows not to use big pictures).

"Some customers have sent out emails on their own and gotten open rates of less than half of one percent," reports Leff. So far, BogoPod is seeing open rates of four-to-six percent.

All in all, it's a big improvement over typical direct mail efforts, argues Leff – for consumers and businesses alike. "DM gives them a bump," but the same ad repeatedly goes to everyone, he says. Regulars can present the same ad to merchants for years, long after the acquisition cost has been leveraged. "It kills the profits." He also asserts that DM is being hurt by increased paper and mailing costs.

The BogoPod system fights offer redundancy with an "offer lifecycle." When consumers print an offer for a selected merchant, a different offer is presented the next time. The service also works with merchants to vary the content to make it more interesting. For instance, it works with a night club owner to provide free entry to coupon users. "It isn’t just category listings," says Leff.

Leff also says the level of reporting is advanced. "We can report where people live, and what their built-in loyalty is." The offering also has built in SEO built in for keywords. And the system also sends out "thank you" emails to users who redeem offers. That’s seen as a big part of the service’s appeal.

A year’s worth of promotions in "off week" emails and tracking is being priced at $200 per month. The service also has various upsells. For instance, it acquires the URL for businesses and redirects traffic for another $150. It adds customization for $300 and animated presentations for $500. The site is also in the process of enabling video for merchants and “solo emails” sent out specifically on behalf of a merchant.

(Move.com alum are all over the place. Several top execs are also manning Fidelity’s Cyberhomes.com).