• by Gavin O'Malley  @mp_gavin, March 3, 2011

Over the next four years, spending on domestic "deal-a-day" offers will approach $4 billion, according to new estimates from BIA/Kelsey. That's up from $873 million in 2010, which would represent a 35.1% compound annual growth rate, according to the market research firm.

"Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008," said Mark Fratrik, vice president of BIA/Kelsey. "We expect this to continue as companies in the space are rapidly adding markets and increasing total user count."

Seeming to take shape overnight, the dramatic rise of daily deals has industry watchers reeling. "It's a real eye-opener," Jeffrey Grau, eMarketer senior analyst, said of the growth projections. "[Daily deals are] not a perfect model, but they're clearly not going away."

In the most optimistic scenario, daily deal sales could exceed $6 billion by 2015 -- representing a 47.4% compound annual growth rate -- or on the other end of the spectrum, as little as $2.1 billion at a growth rate of 19.7%, according to BIA/Kelsey.

In the years ahead, variables that will impact the development of daily deal sales include participating consumers, their average number of transactions per year, and average price per transaction.

Fratrik does allow that the novelty of group-buying discounts could fade somewhat among consumers and merchants, but he believes that the industry's continued segmentation -- both geographically and demographically -- will sufficiently offset this negative trend.

Groupon and LivingSocial currently lead a marketplace of more than 200 deal services, including destination sites and white-label providers working with countless publishers and retailers.

As of March 1, BIA/Kelsey estimates that there are 178 cities with deal-a-day sites, presently reaching 102 million people in the United States.

"The combination of fun offers and convenience makes deal a day a very attractive way to reach local users, and for publishers to work with small businesses," said Peter Krasilovsky, vice president and program director of marketplaces at BIA/Kelsey.

As a result, Krasilovsky said he expects to see some shift in local media spending, resulting from the adoption of deal a day by local advertisers. "We also believe that deal a day doesn't exist in a vacuum," he added. "It will become a part of the growing deals and offers landscape."

In an internal memo, Groupon recently revealed that it saw its revenue surge to $760 million last year from $33 million in 2009 -- although more than one-third of its 2010 sales came from outside the U.S.

Amazon-backed LivingSocial recently said it was booking revenues of more than $1 million a day, and is projected to record well over $500 million in revenue in 2011.