Major Deal Sites Miss Paid-Search Opportunities

Groupon

Groupon remains the most popular daily deal site among subscribers, supporting twice the number compared with its closest competitor, Living Social, and more than double the purchasers. That's according to stats released Wednesday by ForeSee. But with all the hype around daily deal campaigns, some search marketers believe most brands miss an opportunity to tie coupon campaigns into paid-search ads, as local and real-time search become reality.

By the end of this year, insiders expect Groupon to have more than 150 million subscribers. The Web site boasts more than 50 million subscribers, 22 million Groupon coupons sold in North America, and more than $980 million saved in North America, as of January 2011.

One of the most successful Groupon coupons sold: $5 for $10 worth of pizza from Pompei in Chicago. There were 9,258 sold. The ForeSee spring study of more than 22,000 online shoppers, which ties to the research company's annual top 100 American e-retailers, explored the daily deal phenomenon of whether the services provided an acquisition tool to bring in new customers. It also looked at how services like Groupon, Living Social, Woot and Google Offers compare.

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About two-thirds of top 100 site visitors are enrolled in at least one daily deal email program. The study finds that 51% of consumers are enrolled in Groupon; 24% in Living Social; 14% in Google Offers; 10% in Woot; 7%, other; and 35%, none.

Of those who subscribe to daily deals, 46% get deals from more than one service, according to the study. Most people who buy the offers use them. Fifty-five percent said they used more than one offer in the past 90 days; 33% used one offer; and 11%, no offers.

The ForeSee study reveals that about two-thirds of daily deal subscribers bought a deal regardless of price. About 31% of consumers redeeming daily deals are new customers; 27% are infrequent customers; and 38% are former customers.

While deals bring back existing customers, they also help to acquire new ones, although some believe not frequently enough. The majority of new customers get information on deals through emails forwarded by friends. And while the Internet and technology provide the ability to perform real-time searches for local information, brands don't take advantage of tying daily deal email campaigns into paid search, which Jason Lehmbeck, CEO and co-founder of DataPop, believes could help to acquire new customers.

"Real-time search just isn't happening for these guys, but the daily deal sites like Groupon offer timely deals," he said. "It could become a new service for daily deal sites, linking in paid-search ad campaigns."

Tying paid search into daily deal coupon campaigns gives brands the ability to reach many more new prospective customers who have not signed up to receive email specials. And they can do it in real-time. Advertisers would bid on local and generic keywords, keeping costs for clicks at a minimum.

Consumers search on google.com, bing.com or yahoo.com for deals on manicures and pedicures in a specific city, but the technology has not been available to quickly update the keywords and campaigns on the fly. Well, until now, Lehmbeck said. DataPop updates the keywords by taking in data feeds. "The radio stations can offer a local mani-pedi deal, but the Google paid-search ad is old and stale."

The big questions remain: How much revenue could companies garner by tying paid-search ads into coupon campaigns? Would the sale of the coupons offset the cost for clicks?

 

1 comment about "Major Deal Sites Miss Paid-Search Opportunities".
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  1. David S from NA, June 22, 2011 at 10:20 p.m.

    I've used many Groupons and none of the merchants have attempted to retain me as a customer by collecting email, mobile number, offering another coupon, etc. That seems par for the course with most businesses even outside of Groupon, but if businesses are using Groupon as a means for new customer acquisition, then they should be even MORE focused on doing something to bring those customers back in. Very few business have a product/service that is so great that deal-seeking customers are anxious to come back at full price. Businesses need to make more of an effort to reap the benefits of their investment in Groupon advertising.

    I started LocalDealSites.com as a directory of daily deal sites. I have over 159 local deal sites and you can filter the list by city. http://www.localdealsites.com/

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