Consumers will annually spend $4 billion on Groupon, LivingSocial, KGB Deals, and other daily deal sites by 2015, according to a new study from BIA/Kelsey. The Chantilly, VA-based research firm’s estimates represent a dramatic growth trajectory for the marketing niche.
In 2010, BIA/Kelsey found daily deals services captured $873 million. If correct, its projections indicate a 35 percent compound growth rate during the next four years. In addition, it says there are now 178 cities being served by such sites, reaching 102 million U.S. consumers.
Groupon and LivingSocial are the clear marketplace leaders in a space involving around 200 deals-based brands. According to a Wall Street Journal report, an internal Groupon memo recently revealed that its revenue skyrocketed to $760 million last year from $33 million in 2009. And Amazon-backed LivingSocial recently said it was collecting revenues of more than $1 million a day and is expecting to gross at least $500 million in 2011.
Meanwhile, Bing said on Thursday it will enter the daily deals fray by aggregating offers from Groupon, LivingSocial, Restaurant.com, and other sources. According to the Microsoft-owned company’s blog post, it will provide access to more than 200,000 daily offers in over 14,000 U.S. cities and towns. Bing partnered with The Dealmap to launch the service.
GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.
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