Almost two years ago Groupon rushed onto the advertising community with it’s numerous subscribers, no-out-of-pocket advertising and gigantic discount daily deals. This strange brand of promotion was highly successful generating hundreds, even thousands of deals in daily deal formed an industry.
Beware Groupon! Your identity as the number one daily deal site is in severe trouble. It has been reported that facebook, with over 500,000,000 subscribers is about to start their very own daily deal sales program. Actually, there is evidence that this story is more than gossip.
I have personal knowledge that Facebook has already started contacting businesses to acquire local advertising contracts. The business owners that informed me of these contacts, did not consent to feature their business with facebook because, in their estimation, the facebook requisites were much too harsh. But you can trust that there are many, many local advertisers that will advertise on facebook’s daily deal.
This impending shift inspires many questions. Is facebook selling out for the loot? Will facebook lose its edge as the social network with unmolested members? Will their promotions be intrusive? Will they suffer a repercussions from this verycommercial jump?
No doubt the most successful aspect of daily deals sites are their ability to reach from all around the country, or world to take a piece of local advertising. For this reason, facebook’s foray into the daily deal industry is certain to deliver a debilitating blow to customary advertising outlets such as print and radio.
Traditional advertising has decreased severely since daily deal sites started providing advertising with no up front costs local advertising. For that very reason we are seeing customary advertising businesses enter into pacts with group buying web sites. In October, 2010 Cox Media Group, owner of the Atlanta Journal Constitution and numerous radio stations in Atlanta, Austin, Texas and Dayton, Ohio publicized the launch of group buying web site Dealswarm.
This has become a trend as several customary media companies are now partnering with group buy sites to salvage scraps from the local advertising industry. How will facebook’s surfacing on the group buy scene affect this industry? Please, Weigh in on this issue.
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