Commentary

Why Deals On Facebook Isn't Just Another Groupon Clone

Just when I thought I was burned out on all things Groupon, LivingSocial, et al (and there's lots of et als in this market), along comes Deals on Facebook. Which is not to be confused with those two, or BlackBoardEats or Google Offers, or Bing Deals, by the way. Why? Because these are Deals on Facebook.

And believe it or not, even though I spent most of the last paragraph making fun of online coupon deals -- look for the launch of Catharine P. Taylor Deals, coming soon to an email inbox near you! -- this product is different, because it will probably be more social and seamless than those others, and that's better all around. For retailers who sign up, it will be a better promotional platform because of its easy integration with other promotional avenues on Facebook. For consumers, it will be a simpler way to buy deals and find out what deals your friends deem worthy. To get a bit hackneyed about this, it will be Groupon on steroids. If Facebook messes this one up, I'll be amazed.

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To briefly summarize, Deals is a Facebook-ian Groupon clone, in that it offers local deals, currently in a limited number of markets, such as Atlanta and San Francisco. (But not, alas, in New York.) To the extent those others are social, it's because you can use Facebook Connect and because every time someone buys a deal they can automatically share it with friends, with benefits accruing back to them.

But for the Groupons and LivingSocials of the world, the social engine seems to rely on two things: people actually opening the email deals they subscribed to, and on people actively sharing once they've got a deal. I'm not saying people don't actually do this -- if they didn't, these services probably wouldn't have gained as much traction -- but the hurdles just seem bigger. And they seem bigger even though, like all businesses these days, those in the daily deal/couponing/group buying space (it's such a new industry it doesn't seem to have a definitive name) make much use of social tools like Facebook and Twitter. They are certainly no dummies, so they are leveraging the social graph any way they can.

But even though that's the case, it's one thing when you leverage a platform; it's another thing entirely when you own the platform -- and that's going to be the huge difference between Facebook and those that have come before. In fact, while researching this column, I stumbled across one of the difficulties of working with the Facebook platform rather than being part of it.

In the name of research, I bought a Groupon for Thai food at a local restaurant, and because of some confusion over whether I had accidentally signed up for Groupon twice, the system kept rejecting my attempt to purchase -- even when I tried logging in using Facebook Connect, which is supposedly an alternative way of logging on. What unfolded was the usual email verification/password resetting madness that usually causes me to dump whatever it is I was trying to buy. But for you, dear reader, I persisted. About five minutes after I requested that Groupon send an email to my inbox to verify my account's existence, it finally complied. Because of the password problem and other snafus, on the fourth or fifth try of inputting my credit card information I finally got the deal. Of course, it's not always this hard. But when it seems like all of us log on to new services with new passwords every day, how nice it would have been to conduct the entire deal through a service I use every day -- and that, of course, is Facebook.

But I also wondered how well the Groupon integration with Facebook worked when I was actually in Facebook. How effective is it at promoting the deals, I like -- or have bought? As I've been writing this, I went back to my Facebook profile page several times to see; so far it's not showing anything about my activities on Groupon today. (I also "Like"-ed a Groupon deal.) Meanwhile, I did another experiment by "Like"-ing a Facebook deal on tours of Muir Woods. Not surprisingly, that was immediately displayed. I also checked out the News Feed of one of my Facebook friends who had bought a deal on Facebook to see if his transaction had made it into the Feed. It had. (How did I know he'd bought something? I clicked here, where it shows you which Facebook friends have bought, liked and shared deals.)

Of course, nothing about group buying is rocket science, which is why there are so many start-ups clamoring to be the next to offer 25% off your next car wash. Indeed, one of Facebook's innovations in Deals on Facebook  -- which has nothing to do with social media -- is to play up the participating businesses in its offers rather than focusing first on just how big each deal is. I've no doubt competitors will follow suit, since so many retailers don't want to be seen simply as a place where consumers can get a good deal.

But what the others can't offer is a platform of hundreds of millions of people globally, millions in every major market, and the promotional power all of that interconnectedness can harness.  That's why in an overheated market, Facebook will win. In the meantime, I'll go enjoy that Thai food I just bought. I hope finding parking ends up being easier than finalizing the transaction was.

4 comments about "Why Deals On Facebook Isn't Just Another Groupon Clone".
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  1. Bruce May from Bizperity, April 27, 2011 at 5:11 p.m.

    I wonder how long it will be before anti-trust allegations appear (I suppose they just did)... It reminds me of the advantage that Microsoft had in the early days by dominating the browser market. We all know where that ended up. Of course Facebook has created something much bigger than the browser market which means this debate is only just beginning.

  2. Brian Hayashi from ConnectMe 360, April 27, 2011 at 7:06 p.m.

    LivingSocial got its start primarily by using the Facebook platform, so they clearly grok the competitive threat they're about to face.

    That being said, I agree that the big innovation is promoting the businesses, not just the size of the deal. When today's social networks display friends and followers, it's almost always some random list of people.

    Commerce is much different. You can tell a lot about a business by the company they keep. Look at malls. Mall A has Tiffany, H&M, and Neiman-Marcus in their social graph. Mall B has Dollar Store, Mort's Lo-Fat Gelato, and Lil' Johnny Dee's Flip-A-Deal. If you've never been to either location, does their social graph induce you to think more highly of one property over the other?

    The second inning of the social networking game is about to begin.

    Play ball!!

  3. Samson Adepoju from eMarketer, April 28, 2011 at 3:59 p.m.

    I think everything is being over socialized. I wrote a blog post about facebook and and daily deals yesterday. Check it out.

    http://theostrichrace.blogspot.com/

  4. Paula Lynn from Who Else Unlimited, April 28, 2011 at 7:34 p.m.

    There is a longing, a begging to be controlled. Once you purchase from a coupon on FB, the world knows. Those who participate will be handing off even more control no matter how unwittingly.

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