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Google Offers vs. Groupon vs. Facebook Deals

Molly McHugh
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deal a day

Google has officially joined deal-a-day culture and jumped right into the increasingly crowded pool of local-discount curators. And it’s got some hefty competitor, not limited to but including Facebook Deals and Groupon. Given this market’s saturation, they can’t all succeed – so which will sink and which will swim? Here’s a quick look at what they bring to the daily discount table.

Availability

Facebook Deals: Facebook Deals are currently available in Atlanta, Austin, Dallas, San Diego, and San Francisco. However the social network also has its Check-in Deals application, which is more widely available via its mobile app. Using its Places tool, users can check in and view deals nearby – a similar concept to the newly-launched Groupon Now. You can view available Check-in Deals on the site as well, and it’s widely available.

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Google Offers: At the moment, Google Offers is beta testing in Portland, Oregon. New York City, San Francisco, and Oakland should follow. As of press time, Google had only introduced two deals, and there seems to be some sort of hitch rolling them out. We checked the site both yesterday and today, and were told there were currently no deals available in Portland. After a short wait, we received e-mail notification that there was a new discount. A small inconvenience, and one we’ll chalk up to early glitches.

Groupon: It’s no surprise that the most established of these deal-a-day sites also has the widest reach. It’s currently available in more than 500 markets and 44 countries. Groupon has been busy focusing on its global reach, with some notable acquisitions in Asia over the past few months.

Social features

social-facebook dealsFacebook Deals: Being the social titan that it is, pretty much everything about its Deals application revolves around your digital network. Each discount has a Facebook Like and Share button – and if a friend likes one of the retailers’ offering a coupon, a hovering message tells you so. Facebook has made no secret that its tapping its massive social graph to tailor Deals and when it first announced the feature, likened it to getting advice from your friends on what to do and where to go. You can even gift Deals to your friends. But in true Facebook nature, it doesn’t allow users to share its discounts elsewhere: There’s no Twitter button, and certainly no Buzz icon. While this “closed” approach has worked to Facebook’s benefit in the past, this definitely seems like one situation where it may not.

Google Offers: For a company notoriously weak when it comes to social media, Offers actually manages to combine Google’s other features to offer a well-rounded digital network. In addition to its Share buttons for Buzz, Facebook, and Twitter, the site also makes great use of its Places API. Maps is tapped to offer up the retailer’s location and Google takes it a step further with a 360-degree peek inside the business (available to select locations). Users are required to create Google accounts to buy the deals, and this could be the impetus the company needs to spur interest in Google Profiles.

360 view

Groupon:  Groupon didn’t create its social network – its social network created it. It began with a simple plea to refer your friends and earn Groupon bucks, and now it’s got its own community. You can share deals via Twitter, Facebook Message, email, or Facebook Like it. While there plenty of deals make their way across the Internet with the help of these sites, Groupon boasts its own options to create profiles and interact with the rest of the Groupon community, including retailers.

Advantages and disadvantages

Facebook Deals: Facebook’s obvious advantage is being Facebook. The site boasts over 500 million active users, and the amount of time they spend on the site is staggering. Its Business Pages have also become wildly popular and have driven many business owners to advertise using the site. This, in turn, makes creating a Facebook Deal all the more attractive and simple. At launch, the site had managed to secure some reputable names like Gap, Starbucks, and H&M. But the currently limited availability of these discounts makes us think it’s possible Check-in Deals will steal attention from a large Deals roll out, and Facebook doesn’t profit off of these.

Google Offers: Like Facebook, Google also has a wide user base that could yield success for Google Offers. Gmail alone had some 150 million users when it began, so we can assume there are easily a few million more people out there with Google accounts. Of course, the difference is that Google users aren’t drawn to it for the social element. However, Maps and Places have done so well that geo-social and deal-a-day features seem like a natural fit. The popularity of receiving deals via e-mail also works in Google’s favor, considering Gmail’s rising popularity. Of course, being able to receive the deals via another email client could increase initial use, but in the long term probably wouldn’t drive signup for the rest of Google Products. At the moment, Google Offers only features one deal a day, while these two competitors feature multiple, and customers like the variety. Google’s reputation as something of a social media failure also doesn’t do it any favors. One other plus, however, is that Google is doing its homework Groupon-style, by investing in local outreach for its research and write-ups.

Groupon: There are plenty who believe Groupon may have already peaked, but the site retains its hold over the deal-a-day market (alongside the rapidly growing LivingSocial, that is). It has more than 70 million dedicated customers that likely see its discounts every day, and it’s clearly the veteran favorite. It’s the model Facebook and Google Offers are building off of, and that status counts for something. Of course, Groupon’s been around long enough to harbor some customer disillusion as well, and a variety of complaints along with its success. Bad word of mouth is never a good thing, and being the biggest means you can get a lot of it.

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Molly McHugh
Molly McHugh
Former Digital Trends Contributor
Before coming to Digital Trends, Molly worked as a freelance writer, occasional photographer, and general technical lackey…
Facebook takes another stab at deals with Facebook Offers
example

It’s safe to say that the Facebook Offers announcement was overshadowed by the massive explosion that was its Instagram acquisition. Regardless, Facebook has indeed jumped back in the rewards game with its latest feature.
If you’re getting déjà vu reading this post, know that the feeling is mutual. Last April, Facebook launched Facebook Deals in San Francisco, San Diego, Dallas, Austin, Atlanta. It was supposed to be the social networking site’s answer to Groupon and Foursquare and ride the hype of deal-a-day culture – but it bombed.
“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks,” Facebook said at the time. “We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.” It followed the shutdown of Facebook Places, and these foreclosures led us all to declare that Facebook had failed at location.
Of course, it was really more of a temporary setback, or at least Facebook’s hoping. The company clearly has some major plans to conquer the mobile-social platform, and location is a big part of that. They don’t call it SoLoMo for nothing (who “they” are, and why “they” decided that was an acceptable acronym is still uncertain, for the record).
So now Facebook Offers will be the site’s new attempt to corner that market. It’s a slightly more simplistic model than the previous Groupon clone model. Now, business you Like on Facebook will be able to push special deals and discounts to you. So while this latest implementation of rewards has little to do with a user’s actual location, it might eventually be spun into being linked to a check-in offers feature – something its Gowalla acquisition could potentially help flesh out.
But it sounds sort of messy from the onset: there’s no barcode reader to redeem deals, like with Groupon and similar platforms. Instead, you either have to print out the discount (send to an email address, not a Facebook message), or open it on your phone and hand that over to the merchant, which you can see in Facebook's example at right. 
If anything, it’s a retailer-focused product that’s supposed to lure local businesses to the platform, which has focused increasingly on marketing since its Open Graph was introduced. Facebook might have been so quiet about it because it's really something new for business owners, and not exactly the most user-experience oriented application. Offers are rolling out immediately, so expect to see them in your News Feed soon. 

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PayPal to move into daily deals, threat to Groupon

The daily deals market may well be overcrowded, but that’s not stopping online payment giant PayPal from announcing its intention to get involved.
The eBay-owned company plans to use information from its 103 million members to offer deals tailored to their buying habits straight to their mobile phone when, for example, they’re passing a particular store. It believes that offering a location-based service like this will give it an advantage over other daily deals companies.
Bloomberg reported PayPal president Scott Thompson as saying the company hopes to begin offering mobile deals in the first few months of 2012. Market leaders Groupon and Amazon-backed LivingSocial, which combined had an estimated 73 percent share of the daily deals market in October, will no doubt be watching with great interest.
While a slew of companies have come and gone in the daily deals market, PayPal will be entering with more than 100 million people already on its books, with buying habits that can be analysed, giving it a big advantage over those that have tried and failed before.
In a recent interview with Bloomberg at PayPal’s San Jose HQ, Thompson promised an experience “completely different than anyone else’s through and through.”
He added: “We’ll only give you something that we think fits the category of unique and relevant. Everyone else is going to bombard you.”
Fear of competition in the daily deals market was said to be one of the reasons Groupon’s share value dived after the Chicago-based company went public at the beginning of last month. Launching at $20 a share, their value initially jumped by some 50 percent before settling at around the $26 mark. Toward the end of last month, however, they fell below the launch price to just under $17. Since then they’ve clawed their way back to around the $22 mark, though it’ll be interesting to see what impact the announcement by PayPal has on their value.
With research firm BIA/Kelsey estimating that the daily deals market could double in value by 2015 to $4.17 billion, it’s little wonder PayPal has decided to get involved.

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Daily deal predictions for 2012: Who’s in, who’s out, and what discounts to expect
daily deals

The daily deal market is at a crossroads. In one corner, its advocates claim there’s new life to be squeezed out of the already over-saturated industry. In the other, detractors are screaming from the rooftops that Groupon’s controversial IPO process has been proof enough that the market is flawed and has reached its tipping point.
It’s been a tumultuous year, with predictions of collapse one day and promising statistics the next. And while the debate rages on, stand-alone sites as well as established platforms continue to jump into the fray, launching their own discount-a-day applications. So where is the industry heading in 2012?
Teaming up 
According to Tippr CEO Martin Tobias, the market will be rife with new deals and contracts, the biggest of them being a LivingSocial sale. “Going public would be hard for them because of just looking at what happened to Groupon, and investors are going to want their money back,” he says. “LivingSocial is having the same cash problem that Groupon has.”
A now-infamous problem: Groupon owed $230 million more than it had to its name when the company filed to go public earlier this year, and some iffy accounting metrics seemed to try to hide that fact. “They would have gone bankrupt at the end of the month if they hadn’t gone public,” Tobias says.
And it’s because of all this that LivingSocial will instead put itself up for sale. A likely buyer is Amazon, which already own a considerable stake in the company. But others are on the ballot as well, including the likes of Yahoo, Microsoft, and eBay. “Somebody with a large audience already,” says Tobias, “that adding this business to makes sense.”
It’s a smart move for these bigger companies, who can use LivingSocial’s man power to do the daily deals work for it. And according to recent Yipit data, Amazon’s already doing this: “Amazon, which invested $175 million in LivingSocial last December, continues to leverage LivingSocial’s sales force to sell its deals to merchants rather than investing heavily in its own sales force.”
There will also be plenty of efforts by smaller outlets to hook their fate to successful social sites (i.e., ScoutMob’s recent partnership with Foursquare). Containing the user experience within one app or site is better for the consumer, who doesn’t want to switch between applications to fully utilize everything that’s being offered.
Who’s out
To be brief, there’s one clear loser will emerge in 2012: The Groupon clone--something we've seen coming for awhile. Now to be clear, we need to define what that is exactly. A Groupon clone is a stand-alone site that isn’t affiliated with any larger company, that creates its own deals and b2b relationships and finds its own audience. It’s not Google Offers or Amazon Local, for instance.
These sites followed in Groupon’s and LivingSocial’s footsteps, watching the trend take a hold of the e-commerce scene. Unfortunately in this case, the first to the game may have sucked the niche dry before new competitors could even have a chance, and now they will experience the struggles but without the market share and investor relations to fall back on.
“If you’re already established, you don’t have to spend as much building this up,” says Tobias. “Groupon is stumbling and anyone new who wants to compete with it will similarly struggle.” Building a brand from the ground up isn’t easy, and those who are trying to do this on their own have missed the window.  
“I don’t think any of them have a chance,” Tobias says about these clones. “In the last six months 170 of them have gone bankrupt or closed and at the same time 120 of them have been launched.”
Who’s in
But there is hope: “The model isn’t screwed. The direct model is screwed,” he says. Sites that are adding daily deals to their already established platforms have a much better shot at success in this market—sites like Google Offers, Amazon Local, MSN Offers and the like.
Google Offers has had a relatively quiet introduction, although new data from Yipit shows it’s growing steadily. According to the same report, Amazon Local has recently experienced a surge in its expansion. These types, Tobias says, will play out in the long run because they are just part of an entire package of solutions for retailers.
Which brings us to what remains a large hurdle: merchant trust. Many local business owners have sworn off the scheme and the sleazy tales of vendors duped into terrible money-losing deals are never-ending. 
It’s been said time and time again that Groupon is in direct competition with the vendors who use it for customer loyalty, and often the consumers attracted to the site in the first place are motivated by saving money. But building this business around a site that people visit for a variety of reasons—to read, to chat, to email—could mean a very different type of e-commerce experience altogether. And Jerry Nettuno, CEO of small business solutions application Schedulicity says that the market still has room for improvement, and that this will play out next year: "Random go-for-broke deals will evolve into well-thought-out offers." So expect to see this evolution over the next year--from oulets that can manage to promote this kind of thing, which are likely to be big players and not fringe sites. 
2012 Deals: Travel and experience
The Yipit report shows that “spa and beauty” and “restaurant” offers continued to be incredibly popular, both in bookings and percentage of deals on the table. But there are a few emerging trends we’re likely to see in 2012. Groupon’s Getaways have been a solid performer, and a huge sell for the site.
Likewise, LivingSocial Escapes have taken off. “LivingSocial Escapes, LivingSocial’s travel product, experienced a 94-percent growth in gross billings in October after the number of deals increased 64-percent and vouchers sold per deal jumped 40-percent.” LivingSocial Adventures has also done well for the company, so it would stand to reason that experiences and travel could become increasingly important for the daily discount industry. 

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