Daily deals: 5 trends and opportunities for publishers

The daily deals industry has grown so rapidly that it's time to take a step back and put it into perspective: What opportunities are emerging for both consumer and B2B media companies hoping to capitalize on the trend (or already doing so)? 

 

Since sites like Groupon became a big hit, it didn't take long for publishers to tap into the online couponing craze and the daily deals hype. Publishers have tried pairing with big daily deal sites like Groupon, partnering with a white-label deal solution or launching their own services entirely. 

 

Here are five trends shaping the deals space that could translate into revenue builders for publishers. 

 

It's no wonder that publishers are paying attention to the deals space: BIA/Kelsey predicts that deal-a-day e-commerce will reach $1.24 billion this year and $3.9 billion by 2015. And the pool of players in the deals space isn't getting any smaller. PaidContent recently outlined some of the next big players in the deals space to watch aside from the big two often mentioned (Groupon and LivingSocial). 

 

Publishers have a lot of competition both nationally and regionally, but the crowded landscape also provides an opportunity to differentiate. Media companies have the benefit of loyal readers. Niche publishers can even carve out a previously untapped deals arena among their audience. 

 

Mike Wallace, executive director of digital advertising for Boston.com, said in a recent interview that the site recognized the opportunity to offer local deals as a long-time  newspaper consumers trust. "We have some of the best relationships with some of the top local companies in the marketplace that already advertise with us,” he said. 

 

A recent study by Rice University found that daily deal users exhibit low levels of loyalty: Only 20 percent come back for full purchases. That's either disconcerting for the deal industry as a whole or a sign of the opportunity for media companies to get better results with more targeted services. (Right now the market is dominated by Groupon, which has about twice the number of subscribers as its closest competitor LivingSocial, according to data from research firm ForeSee Results.) 

 

The sharing power of digital coupons is one of the reasons the deals industry has ballooned. While less than a quarter of those who receive daily deal e-mails pass along the message to a friend daily, almost half (45 percent) do so once a week, according to research from Yahoo Mail and Ipsos OTX MediaCT. And social media obviously makes it easier than ever to share coupons with many people at once.

 

The social aspect of the deals space could only benefit media companies with well-connected, loyal audiences. Publishers with a strong community of readers can choose relevant deals for their audience that will be easily passed along. 

 

Pairing deals based on location is only in the early stages and set to explode as smartphones become even more prevalent. Foursquare announced this week that it's teaming up with five deal partners to send targeted deals to its app based on check-in histories, time of day and location.  

 

Location-based technology will enable publishers to better target deals to users and charge advertisers more for the service. 

 

However, privacy issues will be a concern in this area. Groupon's loosened policy for collecting user information could come under fire — especially as privacy concerns grow among smartphone users.

 

As social commerce becomes more local and niche, it's also expanding into the B2B space. For example, Bizy is like a B2B version of Groupon, offering discounted products and services aimed at small businesses. 

 

B2B publishers are smart to consider launching deals services as part of their movement toward making marketing services and commerce a bigger piece of the revenue pie. Like consumer publishers, business publishers can lasso specific and loyal audiences to produce a differentiated deal product. 

 

With all of the deal services popping up, it's no wonder that deal aggregators are becoming more important. Consumers are experiencing “deal fatigue,” according to Paul Gain, CEO of the daily deal aggregator Monster Offers. “Consumers are tired of dozens of offers that aren’t tailored to their preferences,” he said in a recent interview with Digiday.

 

Gain recommends publishers get as local as possible in aggregating deals. New York Magazine's recently launched deal newsletter is one example of local deal aggregation. Regional newsletters is one obvious way publishers can jump into deal aggregation, but enthusiast and business publishers shouldn't forget the value aggregation could provide to their particular verticals. And who knows what user-generated innovations publishers could create.

 

 

What other trends are you seeing in the daily deals space that could be an opportunity for publishers? Do you have any good examples of publishers taking advantage of this trend? Comment below.