Deal-a-Day Offers On Fast Track

According to BIA/Kelsey, U.S. consumer spending on deal-a-day offers, is expected to grow from $873 million in 2010 to $3.9 billion in 2015, representing a 35.1% compound annual growth rate (CAGR). While this is the most likely growth case, a number of variables will have an impact on the actual development of deal a day, such as growth in the number of cities/sites, registered users, transactions per year for the average user and the average price per transaction.

Considering these variables, deal a day could grow to as much as $6.1 billion by 2015 (47.4% CAGR), though a very conservative outlook pegs the space at $2.1 billion (19.7% CAGR).

Deal-a-Day Gross Revenues (Million Dollars US; +35.1% CAGR)

Year

Revenue

2010

$873

2011

1,246

2012

1,730

2013

2,339

2014

3,076

2015

3,934

Source: BIAKelsey, March 2011

Mark Fratrik, vice president, BIA/Kelsey, says "... during the three year incubation period beginning in 2008, Deal a day has experienced incredible growth... companies in the space are rapidly adding markets and increasing total user count... subdividing existing metros to provide deals closer to where users live... will help offset any drop-off... as the novelty of the form fades."

As of March 1, 2011, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States. The report says that, while Groupon and LivingSocial lead a marketplace of 200-plus players, the broader field includes destination sites and white-label providers working with local media providers such as directory companies, newspapers, and radio and television operators.

"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, Marketplaces, BIA/Kelsey. "We expect 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. It will become a part of the growing deals and offers landscape."

For more  information from the company about the study and follow on presentation, please  visit here.

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