Understanding Daily Deals: You Probably Have It All Wrong
DM CONFIDENTIAL – Last week we spoke with an interesting startup. Without meaning to sound contrarian, they certainly sounded so — that is, if you believe what the mainstream media says regarding the daily deal space. They say that it does not work for merchants. They say that deals are a disaster that only bring in deal-hunters with no loyalty. What if, though, you had insights into the actual profitability of the deals? What if you could see exactly what those who bring in deals spend in comparison to those who do not? What if you knew the real deal as opposed to self-reported information that might be ever-so-slightly biased, because the merchants and the staff expect those who come in with coupons to be subpar customers? That is exactly the information that this startup provides, and so far for 90 percent of the restaurants that have analyzed their deals, the numbers come in far better than they would have ever guessed, as in profitable.
Not every restaurant will run a profitable deal, and chances are that the restaurants using this software are among the more advanced, given that they are even thinking along the lines of analyzing data. As a result, they are perhaps not quite representative of all restaurants. Even taking that into account, by analyzing the point-of-sale information from restaurants, we have a much truer picture — one that is no longer a guess based on observation. Just imagine trying to run an offer without knowing the conversion amount. All you see is impressions and clicks, and because they come from a high volume source, you automatically assume they do not perform like your other customers. It might not, but to assume it doesn’t just because you receive more of them at one time than your typical customers is an unjust and arguably incorrect assumption.
Members of the mainstream media are not the only ones who have misunderstood the daily deal space. The performance marketing community has, too, but because of a different bias. We in the performance space have been trained to look at the daily deal companies as advertisers. They are the ones who so resemble the beloved email submit, that thinking of them in any other capacity poses challenges. Now that the vast majority of deal companies have cut back on their spend, those in the performance space have started to change their minds and discount regarding their value as a relationship. It is a completely understandable but entirely incorrect assumption, one that we tried to touch upon earlier. Now it’s time to hammer home the point. Those in the performance marketing space should absolutely stop thinking about the typical daily deal site as a potential advertiser. Think about it as a publisher.
Ever heard of a small company called QVC? Is it an advertiser? No. It’s a publisher. Advertisers go there to sell stuff, lots of stuff, in a short period of time. The same holds true for the daily deal sites. They might have needed to acquire lots of people, but that is not who they really are. It’s easy to think of them like that, when that is the impression they made so strongly. But, thinking of them like that misses out on their long term opportunity. They are a distribution source. Just as QVC used new media of the time to influence purchasing behavior, so too do daily deals. People like to buy. The brains behind Instagram, Facebook, Google and so on might not, but they are not the vast majority of the population. The vast majority of the population shops at Wal-Mart, at Target, on flash sale sites. People like spending (um, Apple, anyone?). Deal sites are simply a vehicle by which people can discover and shop. They are the QVC for the internet age.
For performance marketers, this is a major shift. We have to not see ourselves as the user acquisition engine, but as the movie studios that provide content to Netflix. We are the people who leverage platforms. We are the ones who come in early and figure out how to master platforms. Daily deals are such a platform, and so long as the emphasis is on using other platforms to help them get more users, we are missing out on the real opportunity.
Interesting article! I agree with the fact that daily deal sites are like distributors! We help companies get their name out there!
Leave a Comment
- Gone In 10 Seconds: How the Pioneers of Snapchat Marketing Use the App to Build Their Brand
- SPECIAL REPORT: Ad Fraud and the Anatomy of a Botnet
- Survey: Effective Content Marketing Requires 10 or More Posts a Day
- Sharpen Your Marketing Strategy with Accountable Media
- Female Game Players are Stealing TV Advertising Budgets
Adknowledge Announces Launch of ‘AdStation International’KANSAS CITY, Mo., November 25, 2013 (ADOTAS) – Adknowledge is pleased to announce the launch of AdStation International, a global [...] more...
- Study: Dispop Trumps Google Display Advertising in Side-By-Side Comparison December 11th 2013 ADOTAS – Lest we forget, Google is an advertising company [...] more »
- Rubicon Project Strengthens Senior Leadership Team With Strategic New Hires December 11th 2013 LOS ANGELES, December 11, 2013 (ADOTAS) – Rubicon Project (www.rubiconproject.com), [...] more »
- UPDATED: Is Ex-PayPal SVP The Person Leaving Ginormous ‘Tips for Jesus’? December 11th 2013 ADOTAS — A New York waiter claims that Jack Selby, [...] more »
- Integrate and Silicon Valley Bank Ink $12.5 Million in Secured Financing December 11th 2013 SCOTTSDALE, AZ, December 11, 2013 (ADOTAS) – Integrate, the first [...] more »
- Pixalate Raises $4.6 Million to Bring Free Real-Time Ad Viewability and Fraud Detection to Brands and Agencies December 11th 2013 SANTA MONICA, Calif.,December 11, 2013 (ADOTAS) – Pixalate, a leading [...] more »
- Opera Mediaworks Reveals 6 Biggest Mobile Advertising Trends of 2013 December 11th 2013 SAN MATEO, Calif., December 11, 2013 (ADOTAS — In a [...] more »
- Survey: Effective Content Marketing Requires 10 or More Posts a Day December 10th 2013 ADOTAS – Marketers all have different opinions about how much [...] more »
- Gone In 10 Seconds: How the Pioneers of Snapchat Marketing Use the App to Build Their Brand December 12th 2013
- SPECIAL REPORT: Ad Fraud and the Anatomy of a Botnet December 11th 2013
- Survey: Effective Content Marketing Requires 10 or More Posts a Day December 10th 2013
- Sharpen Your Marketing Strategy with Accountable Media December 10th 2013
- Female Game Players are Stealing TV Advertising Budgets December 10th 2013
- Digital Media Specialist - Video
- Mgr Channel Planning (Social Media)
- SEO/SEM Analyst
- Manager Planner - Digital Vendor Marketing
- Brand Manager
- Why Social Media Will Live Past their “Expiry Dates”: [...] in social media stock prices. In May 2012, Facebook reported a $35 billion loss
- Chris Zaharias: Very interesting data. All respect due to Google for having built and scaled tools for
- Dick Bennett CEO: Richard, I (and my company)have been on this scene for years. We performed the initial
- CimatronE 11 Provides Italian Manufacturer With Major Gun Drilling Efficiencies | contractor-software.us: [...] SPECIAL REPORT: Ad Fraud and the Anatomy of a Botnet Click fraud, pixel-jacking and