Monday, September 10, 2012

Editor Needs An Editor

I was following the coverage of last week's Living Social deal for $10 of a Starbucks gift card for $5. One of the more interesting assertions was that Living Social actually paid for the deal, and Starbucks had nothing to do with it. So says a site called, a site that, as they say:
"Since 1997, has reported on the important news, events, trends and people in the $23.5 billion fast casual restaurant industry segment."
The piece on the LS/Starbucks deal was written by the "editor" of FastCasual, Cherryh Butler. Ms. Butler's bio:
"Cherryh Butler has been a reporter for nearly 10 years, writing on a variety of topics ranging from the cable industry and business to health and fitness. Before joining as editor, she wrote for several daily newspapers, magazines and Web sites, including The Kansas City Star and"
So, I found Ms. Butler's piece a bit troubling in a few areas:

- She makes the intriguing assertion that actually Starbucks was not a real participant here. Instead, it amounted to Living Social buying a slew of $10 Gift Card codes from Starbucks (presumably at a bulk discount) and selling them for $5 to gain subscribers. However, the only evidence for this cited was "sources inside the daily-deal industry with direct knowledge of the arrangement." Given the fractured nature of the industry (I am in said industry), this is specious, at best: there are no definitive sources, as there is with Danny Sullivan on all things search related, or Paul Dergarabedian on the latest box office results. An "editor" should have required multiple sources, or at least an anonymous source within Starbucks or Living Social

- She quotes "LivingSocial's Maire Griffin said the partnership is proof that daily deal sites aren't a fleeting trend and that even big brands can benefit from them." This was quoted right after her supposed facts that actually Starbucks had nothing to do with this deal; isn't that a statement worthy of challenge, given this article's assertion? An editor should improve the content by challenging the reporter to get the source to respond to this. Instead, it undermines the credibility of the reporter (in this case, the same person as the editor).

- In a similar vein, later in the article, she asserts that the Starbucks offer "may inspire others to follow suit." Sure, if Living Social will foot the entire cost, what others would not follow suit? Again, she is contradicting the very facts she is purporting to report on: if LS paid for it, this makes no sense. If LS did not pay for it, then why did Starbucks do the deal? That's the reporting; an editor should know this.

- The most egregious error? Lack of fact checking. She states, "Now that Starbucks has made its first foray into daily deals..." This is a patently false statement: the same offer ran with Google Offers in April (actually, a little better offer, as Google donated an additional $3 to charity for each purchase), something a simple search would have turned up.

- She also quotes that the deal sold 1.5 million cards (true), which "netted" $5.2 million. Huh? At $5 (the amount paid), that would have grossed $7.5 million. Since the assertion here is that LS "fully subsidized" (i.e. paid for) the cards, there is no revenue to be shared. Assuming a 3% average fee for the credit card, that takes the net down to about $7.3 million. So what happened to the other $2 million? She does not account for it, unless we are to assume that amounts to the discount Starbucks offered LS to buy these in bulk, but that's unlikely.

You may ask why I am picking on Ms. Butler and her somewhat obscure publication. I truly have no axe to grind. But an editor for an industry publication who is "reporting" rumors with sloppy reporting and lack of factual clarity gives me pause, no matter what. Yes, I am in the industry, so I am more aware of such reporting, but Ms. Butler is one of the few to publish such an intriguing theory on this extremely successful deal. Without facts or even basically edited writing, it detracts from the insight this might offer, and calls into question the source of the data. For an industry publication, that just seems wrong, and I hope it can be improved.

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