The Brief History of Transactional Advertising: Total US Market Value of Half-Off and Deal-a-Day Offers 2000 to 2015

At BIA/Kelsey's recent ILM East conference everyone was talking about “deals”. Not the back room business deals or corporate mergers and acquisitions you might expect at a local media conference. No, everyone was talking about “daily deals”. Since Groupon launched in late 2008, daily deals have become the killer app of today's Social, Local and Mobile web. The deal ecosystem has exploded with hundreds of group buying startups, web directories, and mobile startups challenging traditional media companies for local advertising dollars. The BIA/Kelsey team and Yipit co-founder Jim Moran presented some great information on the current state of the deal space along with projections estimating the US deal-a-day market growing from around $850 million in 2010 to nearly $4 billion by 2015. Daily deals, or transactional advertising have been around since about 2002 in the form of Half-Off Deals and Deal of the Day programs popularized by commercial radio stations. The transactional ad model let radio stations monetize the trade that his pervasive in local radio. Merchants traded vouchers for goods and services in exchange for on-air promotion. Stations then sold the vouchers online to their listeners allowing stations to "monetize the trade". Stations had a new ad product, local merchants got a measurable way to reach the customers they wanted, and consumers got great deals on stuff they actually wanted. Win, win, win! A revolution was in the making - Pay-for-performance. As the web became social, audiences of friends, followers, and subscribers forever transformed how we define what a media company is. With an audience estimated at over 35 million subscribers Groupon has become a media powerhouse based on the simple premise that advertising IS content. The chart below shows estimated market size for transactional advertising from 2000 to 2015. These data are estimates based on our own data and BIA/Kelsey data. A Brief History of Transactional Advertising: Total US Market Value of Half-Off and Deal-a-Day Offers 2000 to 2015