Peanut Labs is best known for providing surveys and offers to social application developers and other companies that use virtual currencies. But the San Francisco company will be launching a new service later this week that moves it into a new market. It will begin running local advertising coupons within its offers, letting people earn discounts on food, merchandise and other local real-life goods while also earning virtual currency to use within their favorite games.
The service, launching later this week on apps from RockYou and TheBroth, will show users local ads based on their IP addresses. To gain the offer, a user clicks and goes to a separate page — under a new brand, called Cherry Deals — purchases the item at the discount, then receives the currency. The sample discounts today come from businesses including a cupcake company, a hand-bag maker and a tax firm.
As with many other discounted online deals, Cherry Deals typically expire in a day or so, meaning users who see a deal they like will need to act fast.
Peanut Labs cofounder Ali Moiz tells us that the company has so far been business-facing, plugging its monetization services in with other monetization companies and developers; the Cherry Deals brand is what it is now pushing to consumers
The way these deals works is not new, conceptually. Peanut Labs had a staff of 20 salespeople hitting the streets of 6 cities over the past 5 months, negotiating deep group discounts at local businesses and guaranteeing the low rates in exchange for bringing each client lots of customers. This is similar to how offline coupon book companies have offered discounts for decades; the same group-discount mechanism is how big European e-commerce companies like vente-privee.com, and US ones like Gilt Groupe. Companies that offer online group discounts for local businesses include Groupon and LivingSocial, both of whom are also active on Facebook.
But for Peanut Labs, this is about providing another way to monetize virtual currency through its existing service, rather than trying to take on other types of coupon companies. The 200 other companies that it works with will be getting Cherry Deals in the next week or so, Moiz says, from online gaming sites to dating to blogs. In his view, this is about raising the quality of offer-driven monetization for developers — some users may be finding value in its surveys and offers, but it’s likely that more of them will appreciate getting big discounts at local places they might be shopping at anyway.
While Moiz isn’t sharing any details about revenue potential, he says the percentage payout to developers will be the same as what it already has with surveys and offers. However, he adds, these coupons can be four times as lucrative as current offers. The first cities to get the service include San Francisco, Los Angeles, Houston, Chicago and New York, with expansion to Canada and the United Kingdom coming later this year.
Zooming out, Moiz says his company is working on 3 to 4 more new ways of monetizing virtual currency, beyond surveys, offers and the new local coupons. This is part of an industry trend. We’re seeing a wide variety of virtual goods monetization companies exploring new ways of bringing in more money, from big-brand offers to pre-paid cards to online work.