While the number of daily deal sites seems to be growing as often as their offer emails are sent, there is one that made a recent entrance into our market that many consumers and businesses are taking notice of: Google Offers. The Google creation functions much like Groupon or LivingSocial where subscribers receive a local deal via email each day.
In 2010, Groupon turned down a $6 billion offer from Google and now they find themselves competing with the search engine giant in many markets including ours. Although Groupon has a pretty sizeable lead in the number of subscribers since they have been collecting names for many years; Google could be a powerful competitor with its enormous reach, brand recognition and vast resources. Even though millions of people are already using the Google search engine and Google's other products, consumers will still need to sign up for Google Offers.
How will Google differentiate itself from Groupon and the other competition to gain an edge in the local daily deal business? Expect better personalization and targeting as well as deals integrated into Google Maps and other location searches. During account set-up, Google allows you to identify the neighborhoods where you work, live and spend your free time. Google customers can personalize the deals they receive by opting in or out of twenty-four categories including recreation, sporting events and food and drink. Google Offers is another tool businesses can use to advertise locally through Google. Other tools include Google AdWords, Analytics and Places. Google reps have suggested that, in the future, Google Offers will allow businesses to structure their own deals similar to how they create their own ads in AdWords.
Research indicates that consumers are purchasing these deals in increasing numbers. Research firm BIA/Kelsey recently released a study estimating that U.S. consumer spending on deals (including daily deals, instant deals and flash sales) will grow from $873 million in 2010 to $4.2 billion in 2015.
Since these dollar amounts are so high, many businesses may think that this quick marketing tactic is a great way to bring in new customers. In a June 2011 MerchantCircle survey of small businesses, the top reason businesses like daily deals was customer acquisition (58%) while at the same time ineffective customer acquisition was also listed as the top reason for not offering a daily deal again (42.4%). Keep in mind daily deal purchasers are shoppers looking for discounts. Make sure you devise a plan to draw them back to your business when they come in to redeem the deal.
But Google Offers are here to stay – Google announced late last month that Google Offers users will gain access to an expanded amount of daily deals in five markets. The expanded offerings are already available in New York and San Francisco. Now, Boston, Long Beach, LA, Washington DC and good old Chicago will also get more deals.
If you would like more information on Google Offers or help deciding if your business could benefit from making an offer via a daily deal site, please contact us at www.BuddinghAssociates.com.
Jeanne M. Buddingh is founder and partner in Buddingh & Associates, Inc., an award-winning strategic marketing consulting firm in Naperville, IL. Contact her at (630) 961-4504 or visit www.BuddinghAssociates.com/.