Advertising Through Deal Sites: Groupon and Beyond

Coupon and deal sites practically predate the Web. In the early days, Internet users shared coupon codes by discussion lists and newsgroups, and long before current media darling Groupon started, popular deal sites like CoolSavings and MyCoupons.com dominated the space. Times change, though, and there are several things online media planners – especially those representing retail merchants – should know.

Then and Now

Anyone in retail marketing knows that coupons, deals, and rebates are indispensable tools to both acquire first-time customers and retain existing ones. This fact accounts for why deal sites have existed for so long and continue to have legs under almost any economic circumstance. Since the early days of the Internet, retailers could get their offers posted to all kinds of deal sites without much difficulty (or the need for a professional media buyer). With the advent of affiliates, many retailers didn’t even need to post their offers – their affiliates would do it for them or even develop whole deal sites filled with nothing more than affiliate links.

Then deal sites started to get more sophisticated with on-site advertising, premium or featured merchant spots, and programs to help merchants acquire new customers and/or build their own e-mail remarketing databases. Today’s rising star deal sites take advantage (or rely on) of more modern trends like social connections, mobile and hyper-local…and some that approach offers on multiple fronts.

Groupon

Leading the way in Web 2.0 deal marketing is Groupon. Groupon offers local deals contingent upon a minimum number of users opting in to receive the daily deal before anyone can get it. According to Julie Anne Mossler, Groupon’s PR and consumer marketing manager, the site now has 25 million registered users worldwide (15 million in North America alone).

To remain a leader as Groupon-clone sites crop up weekly (just last week, even Walmart announced that it was launching a Groupon-like Facebook app called “CrowdSaver”), the company continues to innovate with strategic partnerships (e.g., with eBay), self-service tools for merchants, and a new personalization feature which matches customers to the best deal by looking at their Zip code, sex, and buying history. This kind of personalization also allows Groupon to service more advertisers simultaneously.

Groupon works directly with ad agencies. Mossler reminds media planners that agency turnaround time for deals on Groupon has to happen fast – deals are scheduled only a week or two before they run and no advanced locked-in dates for deals can be booked.

Other Deal Sites

Though deal sites abound, there are a few stalwarts or up-and-comers media planners may want to consider:

• Eversave – An offshoot of performance-based solutions provider Prospectiv, Eversave deviates from the Groupon model in that it merely requires a user to make a purchase in order to get the discount – the group collective isn’t a factor. Eversave found its deals still excited consumers enough for the offer to go viral, and like other social sharing offer sites, those that share get rewarded with “share dollars” for future deals.
• LivingSocial
• BuyWithMe
• Tippr
• Zozi– Zozi started out as ekoVenture.com, a site offering travel packages and experience/adventure deals, and though it has evolved, it retains this niche
• HomeRun – Calls its deals “offer-tising”
• Jasmere– Focuses on “lesser-known specialty retailers that deserve national attention”
• DealOn

Mobile Deals

Mobile offers the perfect bridge between brick-and-mortar retailers and the consumer, so it’s only natural that deals would be delivered directly this way as well. Some of the biggest players in the mobile space include:

• • Yowza – Geo-targeted offers to consumers (age and gender can be targeted as well); “Simply launch the app, show the coupon, and carry on with your day.”

*Insert Yowza image*

• Scoutmob
• The Dealmap

Future Predictions

A recent Rice University study questions the sustainability of these kinds of localized offers. It found that Groupon promotions were profitable for only 66 percent of the businesses surveyed, with more than 40 percent of respondents indicating they would not run such a promotion again.

With so many deal sites, many are also bound to fail or be consolidated. Weighing in, Martin Tobias of Tippr thinks deal sites will peak and actual activity will take place in-context (within Web content). I say, if Google decides to get in the game it will be all over for most general players.

I’d like to close by saying that this column by no means covers all the deal sites out there and it’s not meant to. As I write with the professional media planner in mind, the sites I’ve listed rise above mere coupon and deal directories or very hyper-local sites. I invite those wanting to have their say to add to my list via comments below.