The Social Impact of Daily Deals

Michael Taylor from BIA/Kelsey recently gave me a call to talk about the Dealicio deal platform.  Following is the full text of Michael's post.

I recently had the opportunity to sit down with Graham Clarke, CEO of Dealicio,
an offshoot of 53 Technology. Dealicio is a white-label platform
enabling local media companies to launch, manage and advertise daily
deals. Dealicio recognized the power of social media in driving deals
and spreading them through social networks from their earlier work with
half-off offers. What Clarke envisioned for Dealicio was “a simple
platform that would make it easy to launch and manage deals to generate
profits.”

While many of the larger daily deal companies seek to be the only
provider or the “powered by” provider, Dealicio is set up as a flexible
platform that can be branded by the media company and integrated with
other internal platforms such as e-mail server, payment systems and back
office systems. “Our goal has been to make it a closed loop offer that
makes it simple to integrate into a media organization,” says Clarke.
Dealicio’s model is based on a per-transaction charge, but allows
additional flexibility for a company to bring in affiliates to extend
the offer and generate additional revenues.

Facebook integration is a key aspect of the Dealicio platform. Every
deal is geotargeted and indexed, and tags are added for easy social
sharing. Clarke recognizes that, “Facebook is a significant traffic
source with more people interacting and turning to this source more so
than even e-mail or search.” By integrating with Facebook, Clarke sees
that, “reach and SEO are significantly enhanced because all deals are
connected to a company’s social media stream.” Using Facebook’s Open graph protocol
enables sites to integrate Web pages into the social graph. This means
when a user clicks a “Like” button, a connection is made to the Web page
and a graphic appears in the Facebook profile helping to further
promote the offer.

When asked about the future of daily deals and group buying, Clarke
felt that, “the transactional model is here to stay for both local
merchants and brands.” As a form of pay-per-action, deal flow is
measurable and demonstrates a clear ROI for advertisers if they are
clear on the costs and initial risks of offering discounted deals. While
discussing what will further compel the daily deals space, Clarke sees,
“mobile as one of the major forces pushing the daily deal space because
of geotargeting, and the addition of mobile transactions once they are
formalized and adopted by consumers.” While it is still early days for
the segment, Clarke feel strongly that, “some consolidation will occur
for the basic daily deal providers, but there is still plenty of room
for innovation particularly for segment specific deal offers such as
electronics, clothing, children’s items and others.”

What the daily deal space has done is create, what Clarke calls,
“transaction pipelines.” The real question for the daily deal providers
and platforms is what other transactions are possible within this new
pipeline. Clarke feels, “Dealicio’s growth is only limited if we fail to
innovate and to respond to the needs of our media partners.”