Compared with the earlier forecast, this update indicates only a slight increase overall by 2015. However, revenues for 2011 have been revised upward significantly to $2 billion from the $1.2 billion originally estimated in March.
Consumer Spending On U.S. "Deals" (Forecast in Million Dollars)
Consumer Spend ($Million)
Source: BIA/Kelsey, September 2011
Mark Fratrik, BIA/Kelsey vice president and chief economist, "... as more... awareness grows and new markets are entered... we see a ceiling on how many deals consumers will buy... (but) we believe daily deals reinforce other advertising and related services, like instant deals and flash sales... "
Among the factors underlying this revised forecast, says the report, are:
The report says that Groupon and LivingSocial continue to lead a growing marketplace of 600-plus players, which include destination sites, white-label providers working with local media such as directory companies, newspapers, and radio and television operators; vertical players; mobile/location-based providers; flash sales sites; exchanges; and aggregators.
Peter Krasilovsky, vice president and program director, Marketplaces, BIA/Kelsey, concludes that "... the deals market continues to grow, despite the recent departure of Facebook and others that may not have been well-equipped... to participate in such a crowded market... we expect local media companies to leverage their existing promotional, sales and other local assets to play a significant role in this industry... "
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