Facebook has had a couple of "deals" products: "Deals" and "Check-in Deals." Deals are going away, but Check-in Deals are staying.
Facebook gave us the following statement: “After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks. We think there is a lot of power in a social approach to driving people into local businesses. We remain committed to building products to help local businesses connect with people, like Ads, Pages, Sponsored Stories, and Check-in Deals. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”
Much of the commentary around this move is painting it as one less competitor for Groupon, and perhaps that is the case as far as "daily deals". But as far as where local businesses are spending their ad dollars, I would hardly say Facebook has any less an edge because of this.
For one, you have to consider that the the daily deals and check-in spaces are becoming much more integrated with one another, and appear to be essentially merging. Facebook probably doesn't need a traditional Groupon-type version of deals. Facebook users don't necessarily need a daily email about a businesses they may or may not care about. The check-in deal, where users can check-in to a store they're already at for a deal is likely more appealing to more users, and these deals are more likely to consistently be taken advantage of by users.
It's not as if Groupon and its other competitors don't know this. You may recall a recently announced partnership between Groupon and Foursquare.
Facebook already offers some very good targeting options and an enormous user base that is irresistible to advertisers. They even continue to improve on the targeting. They also recently opened up the Ads API, so you can expect third-parties to do some even more interesting things with Facebook advertising.
Meanwhile, in the deals space itself, Groupon is down 50% while LivingSocial is up 27% in traffic this summer, according to new numbers from Exerpiean Hitwise. Here are some highlights of the firm's more recent findings in this area:
- The drop-off in Groupon traffic this summer has been significant nearly 50% since its peak in the second week of June 2011 compared to last week.
- During the same time, Living Social has achieved 27% growth in visits to its site.
- Overall visits to a custom category of Daily Deal & Aggregator sites were down 25% for the same time.
- Please note that this is web-based traffic to both domains and does not include mobile or app specific traffic.
- Perhaps it is simply a case of increased number of competitors and deal fatigue among consumers or simply not enough of the right deals.
- PriceGrabber released results from its Local Deals Survey in June, stating that 44% of respondents said they use or search daily deal Websites. However, 52% expressed feeling overwhelmed by the number of bargain-boasting emails they receive on a daily basis.