The negative lip service around Groupon’s growing instability and the continual shake-out of sites like Facebook and Yelp has led many to ask: Are we approaching the end of the daily deal era?
Don’t let the media noise drown out the core appeal of local deals: that, for the first time, the Internet, social media, email and mobile now have a successful, measurable method by which to drive millions of people online to do something offline. Deal programs are the first product to truly make that magical marriage of advertising and consumption work — and aren’t going anywhere. We’re approaching the end of Act 1, but the story will continue to develop.
The conflict in Act 1 is that the primary pioneers of the product created an unsustainably expensive infrastructure to deliver it. They tried to build new, enormous consumer brands just around deals; they spent too much on Super Bowl ads and sales forces to sell only one kind of marketing program. The "Groupon tax" is too high.
While many of the infinite small deal sites are now being weeded out and even some larger programs are shifting focus, Act 2 will usher in new (but unproven) hyperlocal features from the big, “horizontal” group buying sites and, in particular, well-executed deal programs by niche content publishers. The focus will not be on deal sites and daily emails, it will be on matching the right customer with the right offer at the right time.
As the curtain is falling on Daily Deals: Act I, bid farewell to the original actors of horizontal, deal-only sites and poorly-targeted daily emails, and clear the stage for more relevant mobile offers and more focused deal programs by niche media entities. The show isn’t over; the scene has just been set.
Tippr Founder/CEO Martin Tobias is a veteran executive, serial entrepreneur, and a green energy and technology venture capitalist. Tobias has more than 30 years experience creating and leading successful companies including Loudeye Technologies, Imperium Renewables and Kashless, Inc. From his beginnings as a programmer, Tobias has focused on applying technology to solve real world business problems.