Is this good news for LivingSocial and Groupon or bad? It seemed as if a new daily deal site popped up every week last year, but many bit the digital dust in the second half of last year.
Daily Deal Media says that 798 daily deal sites closed up shop in the last six months. The total number of sites globally fell 7.61 percent in that period.
While Europe and Latin America saw increased numbers of daily deal sites (235 in Europe, 324 in Latin America), Asia lost a whopping 1,348 such sites.
But a survey of companies that used daily deal sites last year found that 35 percent had profitable deal offers and only 16.5 percent were unhappy with their deals.
We’ve said right along that the daily deal site space is going to see attrition and consolidation with only a few larger players likely to survive. But attrition is obviously taking more of these me-too sites than acquisitions.
A consumer poll found that 39 percent of 60,000 surveyed had never signed up for a daily deal program, so there is room for growth.
What do you think? Is the daily deal business sustainable?
Following a blowout Black Friday/Cyber Monday shopping weekend, many consumers will continue to hit the stores through the final days leading up to Christmas, according to survey data from PriceGrabber, a part of Experian.
Results from PriceGrabber’s fourth winter holiday shopping survey reveal that 41 percent of consumers plan to shop between Dec. 21 and Dec. 24 for holiday gifts.
This data comes on the heels of a successfulThanksgiving weekend for retailers, during which PriceGrabber experienced a 15 percent increase in site traffic compared to 2010. Conducted from Nov. 17 to Nov. 30, 2011, the survey includes responses from 13,472 U.S. online shopping consumers.
Many last-minute shoppers are hunting for bargains
When those consumers who plan to shop at the last minute were asked to select all of the reasons why, 43 percent said that they believe the best discounts can be found during this time period.
Another 43 percent of consumers indicated that they are busy and unable to finish their shopping earlier, 26 percent admitted to procrastinating, 22 percent believe it is fun to do last-minute shopping, and 10 percent are waiting for a year-end work bonus to begin shopping.
“After observing the increase in activity and sales of the Black Friday and Cyber Monday shopping season this year, we expect to see a significant percentage of consumers seeking to prompt retailers to offer additional savings throughout December,” said Graham Jones, general manager of PriceGrabber.
“Savvy shoppers saw retailers rolling out discounts as early as the week before Thanksgiving this year, and they are staying on top of last-minute incentives that are certainly on the horizon in the coming weeks.”
Consumers will buy a combination of high- and low-price-point items
When asked what type of gifts they plan to purchase at the last minute, 53 percent said they intend to purchase both big- and small-ticket items, 31 percent will buy only small-ticket items (under $100); 10 percent will purchase all of the holidays gifts on their list, and 6 percent will buy only big-ticket items (over $100).
More men will delay holiday shopping until January
While most consumers plan to complete their holiday shopping before Dec. 25, PriceGrabber’s survey found that 9 percent will wait until January to purchase holiday gifts. Men and women differed in their plans, with 11 percent of men saying they will wait until January to buy gifts and only 8 percent of women planning to do so.
When those consumers who will delay their holiday shopping until January were asked to select all of the reasons why, 68 percent said that they believe sale prices are best in January, 27 percent plan to use gift money received during the holiday period, 24 percent simply prefer shopping in January, and 11 percent plan to wait for a year-end work bonus to make purchases.
Daily deal sites begin to make mark on last-minute shoppers
According to PriceGrabber’s survey, a notable percentage of shoppers are turning to daily deal sites for great last-minute prices, with 27 percent indicating that they plan to shop for last-minute gifts on sites such as Groupon and LivingSocial.
Those consumers who plan to use daily deal sites will do so largely in hopes of finding a bargain.
Fifty-eight percent of respondents indicated they are trying to save money on gifts and like the discounts available through daily deal sites; 22 percent enjoy the great holiday deals on local services in their area; 13 percent said they liked being able to share great deals with family and friends, especially during the holiday season; 4 percent prefer to give experiential gifts and believe local deal sites offer the best options; and 3 percent are intrigued by the hype around local deal sites.
JP Morgan, Lightspeed Ventures and Amazon.com participated in this round, which Venture Beat reports is the first tranche of a $400 million raise.
The company has raised a total of $808 million. It has spent about $353 million to acquire SocialMedia.com, TicketMonster and Urban Escapes.
It delayed a planned $1 billion initial public offering of stock earlier this year.
LivingSocial presented at TechMedia’s 2009 Southeast Venture Conference (SEVC). The next SEVC is coming up in Tysons Corner, Va, Feb. 29-March 1.
For an overview of the daily deals space in 2011 see this infographic.
Apple job announcement hints at changes to Siri
After testing a number of smartphones and tablets, we’re convinced that voice control of these devices is the way to go. Typing on virtual keyboards may get better like all manual skills as one practices, but it’s never going to be an ideal way to use electronic devices.
Now, Apple has posted jobs for two iOS engineers to help develop an API for Siri, the voice personal assistant on the iPhone 4S. The API would extend the applications users could run with voice commands.
Many of the domain names will not be adult sites, but rather were registered by non-adult firms to prevent adult sites from sullying their brands.
Amazon launches $6M fund for indie Kindle authors
Amazon has started a new fund called KDP select, with $500,000 available for December to encourage authors to publish works exclusive on the Kindle for 90 days.
Russ Grandinetti, vice president of Kindle Content said,“By choosing KDP Select, independent authors and publishers have an opportunity to make money in a whole new way and reach the growing audience of Amazon Prime members, for KDP Select authors, and we hope to add more such tools over time.”
After the 90 days, the books will then go to the Kindle Owners Lending Library, which allows users to check out books for free, although Amazon will pay authors a fee. The Kindle lending library has stirred up some controversy among authors’ groups and publishers, but that’s nothing new for Amazon.
All this comes on the heels of Amazon’s quite successful launch of its 7-inch tablet, the Kindle Fire, which reports say may already be second to the iPad in tablet sales. We wonder if that will continue to hold true as other inexpensive tablets hit the market, such as the new one announced by MIPPS Technology.
It has been quite a ride for companies in the daily deals space this year. For a look at just how volatile the space has been, 8 coupons created this infographic:
Groupon, (Nasdaq:GRPN) the Chicago-based daily deal site increased the size of its initial public offering of stock by 5 million to 35 million shares it sold at $20 each – above its initial $16 to $18 range, to raise $700 million in the largest IPO for an Internet company since Google in 2004.
Groupon’s shares soared 42 percent in mid-day trading to $28.45 at around noon. That price puts its market value at $17.8 billion.
Reuter’s reports that the company’s low “float” helped boost demand for its shares. It is selling just 4.7 percent of its shares, one of the lowest percentages of IPO shares offered in ten years.
The IPO is among the most anticipated of recent years.
Groupon is the leader in the daily deal business, which has spawned a host of imitators and competitors, including DC-based LivingSocial and many regional firms.
“If you build it, they will come” no longer works for online retailers: heading into the holiday shopping season, a new survey reveals that active online shoppers increasingly rely on online product reviews as a key element in their buying decisions.
The survey also found they’re increasingly interacting directly with vendors through social media sites like Facebook and Google+, and shows that deal sites such as Groupon and LivingSocial soared in popularity.
The fourth annual Global Consumer Shopping Habits Survey was conducted by ChannelAdvisor, a global e-commerce platform provider that enables retailers to sell more across online channels. The survey included responses from participants throughout North America, Europe and Australia.
With the global economy in a continued weakened state, the company noted that consumer preferences are more important than ever for retailers to take into account as they work to stay profitable during the all-important holiday season and beyond.
Peer-based product reviews are one of the most important factors in the buying decisions of online shoppers, according to the ChannelAdvisor survey. Ninety percent of shoppers around the world who answered the survey said they read product reviews from other shoppers before buying, with 83 percent saying the reviews affect whether they actually purchase an item. In the United States alone, almost half of the respondents (48 percent) said they have posted an online review as well.
“Consumers are increasingly diversifying the places they shop online, which is reflected within this survey and further highlights the need for retailers to expand their reach on every e-commerce channel, including mobile and social,” said Scot Wingo, ChannelAdvisor’s chief executive officer.
“The development of emerging channels within the past year is staggering, supporting our belief that these channels are more than just passing trends. The survey reveals how influential social networks have become, as well as their potential to drive e-commerce moving forward.”
Customer sentiment has increasingly migrated as well to social media sites in the last year, with more than half (53 percent) of those responding to the survey saying that product comments posted to retailers’ Facebook and Twitter pages play a role in their buying decisions.
Increasingly, those retailers are aware of the sites’ growing importance in their efforts, and are seeking to engage potential and existing customers online; the survey indicates their efforts are taking hold. More than one-third of the respondents (34 percent) said they have become “fans” of retailers on Facebook; that number is much higher in the United States, where 46 percent said they have done so.
In addition, 83 percent said they are likely to visit a retailer’s website if it’s been recommended by a Facebook friend.
Other findings from the ChannelAdvisor survey include:
Google continues as the clear number-one choice globally among online shoppers as a starting point for product searches;
Purchases made via mobile phone have more than tripled in the past year, to 31% of those responding to the survey (but online shoppers say using tablet computers, like the iPad, is far easier);
Thirty percent of shoppers worldwide say they are using barcode scanning applications (like eBay’s RedLaser) as an element in their buying decision; and
“Deal of the day” sites, like Groupon and LivingSocial, have leaped in popularity, with about half of all respondents in the United States saying they use both sites frequently.
For the second month in a row, daily deal sites Groupon.com adn LivingSocial saw significant declines in traffic, while Facebook.com, Twitter.com, MtV.com and unsurprisingly, NFL.com, all saw major traffic increases, acccording to Kantar Media Compete.
Compete ranks the 250 top websites monthly. This month’s results:
Daily Deal Leaders Drop in UVs for Second Consecutive Month Perhaps in part due to market saturation and deal fatigue, the daily deal category’s definitive leader, Groupon.com, dropped 28.6 percent month-over-month (M-O-M) to 21.9M unique visitors (UVs). Despite its two-month downward trend, however, the site still shows impressive 164.9 percent year-over-year (Y-O-Y) growth. Livingsocial.com attracted 10.15M UVs in August, a 4.25 percent fall M-O-M, but a 96.02 percent rise Y-O-Y.
Facebook Gives Twitter a Boost In August, Facebook.com and Twitter.com both scored all-time high numbers of UVs for the second straight month. Facebook hit 155.8M UVs (up 3.97 percent M-O-M, up 22.12 percent Y-O-Y), while Twitter rose 12.68 percent M-O-M to reach 36.5M UVs, a 27.57 percent improvement over last August.
“As both of these booming platforms wrestle with monetization and developing the optimal approach to incorporating advertising into social networking, marketers should watch the sites’ monthly metrics and referral traffic carefully to help determine if, where and/or how their brands should advertise in social,” said Michael Perlman, managing director, financial services and online media & search at Compete.
In August, Twitter.com received 26.6 percent of its traffic via Facebook.com — more than from Google and Yahoo combined! Of Twitter’s outbound referrals, 22.74 landed on Facebook. Conversely, only 0.37 percent of Facebook’s incoming traffic was referred from Twitter. A mere 1.22 percent of Facebook’s outgoing referrals were to Twitter.
MTV.com Celebrates VMA Anticipation and the Return of Jersey Shore MTV.com was among the fastest-moving sites on Compete’s Top 250 list in August. Monthly UVs leapt to 12.8M, a 45.8 percent M-O-M increase and a 24.9 percent increase Y-O-Y. Factoring into this success were the season four Jersey Shore premiere on August 4 and the 2011 MTV Video Music Awards on August 28.
Traffic referrals from Facebook accounted for nearly 14 percent of MTV.com’s traffic in August. On the outbound end of things, almost 19 percent of MTV.com visitors made Facebook.com their next web destination.
NFL.com Benefits from Fantasy Football NFL.com, home of the National Football League, shot up to 9.8M UVs in August, translating into a monthly spike of 114.36 percent and a Y-O-Y increase of 18.96 percent. Although the official season didn’t start until September, the site drew in scores of visitors with its fantasy offerings. NFL.com subdomain Fantasy.NFL.com jumped 309.82 percent for the month.
One to Watch: Patch.com Patch.com, a “community-specific news and information platform,” hit number 208 on Compete’s Top 250 list in August, garnering 6.78M UVs — a 17.8 percent increase for the month and a 1193.1 percent leap from the site’s standing in August 2010.
DC-based LivingSocial, Groupon’s largest competitor, may delay plans to file for an initial public offering of stock and take a new $200 million financing round instead, according to Bloomburg, which sites anonymous sources.
The round would value LivingSocial at $6 million and might include equity and debt the report says. It has raised $632 million in backing so far.
The company was discussing a potential IPO of more than 10 billion, but a delay may be prudent in the current volatile market for both it and Groupon.
Jon Carpenter, Director of Marketing, LivingSocial, will be at TechMedia’s upcoming Digital East conference in Tysons Corner, VA, Sept. 28-29.
GrubHub grabs whopping $50 million for mobile restaurant ordering service
CHICAGO -GrubHub, a web and mobile service that connects diners to restaurants and simplifies online ordering for delivery and pick up, has raised $50 million in Series E funding to aggressively focus on its mobile development and acquire New York-based Dotmenu, the parent company of Campusfood and Allmenus.
This Series E funding is led by Lightspeed Ventures with Mesirow Financial, Benchmark Capital, Greenspring Associates and DAG Ventures participating. Terms of the acquisition will not be disclosed.
“Since starting GrubHub with my partner Mike Evans in his apartment in 2004, we’ve sent over $200 million in delivery and pick up orders to independent restaurants across the country,” said Matt Maloney, GrubHub co-founder and CEO. “With our unwavering focus on providing the best service to diners and the most efficient technology to restaurant owners, we have grown to become the leader in the online ordering space.
“It is precisely for this reason that we are acquiring Dotmenu. Dotmenu has shown great expertise in servicing the college market, and by combining our extensive networks, we will become the foremost resource for diners and restaurants for their online ordering needs.”
The Series E and Dotmenu acquisition comes just six months after GrubHub raised $20 million in funding led by DAG Ventures. The funding rounds, coupled with the acquisition, strengthen GrubHub’s position as the category-defining leader in the industry.
Largest restaurant listing in the country
Through the acquisition, GrubHub will have the largest restaurant listing in the country with 250,000 restaurant menus in over 50 major cities and countless college towns across the US. The two companies are projected to send over $225 million in combined order revenues to independent restaurants in 2011, and will continue together to achieve more aggressive growth in the years to come.
“GrubHub has a strong presence in the top US markets,” said Michael Saunders, Founder and President of Dotmenu. “This, combined with our network across more than 300 college campuses, allows us to build upon the strong relationship we have with our diners long after they graduate. The acquisition will enable us to make an immediate impact on our restaurants by sending more orders their way.”
GrubHub is free for diners who order and pay for their meals with cash, credit or PayPal. Restaurants pay commissions for each online order they receive from GrubHub, and every order is supported by GrubHub’s 24/7 customer service. Restaurants that do not currently partner with GrubHub can still list their telephone numbers and menus for free.
Visitors to the site or mobile users enter their address to see every local restaurant that delivers to them. Diners can view menus and coupons, read reviews and order for free online, by phone or through the GrubHub iPhone and Android apps.
There are more than 300,000 delivery and takeout restaurants in the country. On average, GrubHub users order out more than 10 times a month and over 22 percent of GrubHub’s revenues come through mobile orders. Pickup and delivery are the fastest growing segments in the restaurant industry, which is one of the largest sectors of the U.S. economy. With more people searching for restaurants and ordering food on-line and through smartphones, the opportunity for continued growth is substantial.
Facebook changes
Facebook CEO Mark Zuckerbergy disclosed huge changes to the social network, which he says now has a record billion visitors a day.
They include a new feature called Timeline, which curates news, apps and visuals. The feature, which sorts content with an algorithm.
While Zuckerberg and Facebook made a lot of hoopla over the Timeline changes to users’ profiles, it is sure to stir up more controversy among users, who have been notoriously unfriendly toward the continual alterations Facebook makes to the site.
The company also added a lightweight status steam called “Ticker.”
One user told us recently, “They just don’t know how to let it alone.”
On the other hand, perhaps it will quell the Facebook fatigue that more than a few of our friends show signs of experiencing.
Here’s a video showing an overview of what Timeline looks like:
Despite recent news reports questioning the long-term viability of daily deal companies, a new study from researchers at Rice University and Cornell University shows that the companies are more popular than ever among consumers.
“The key finding is that there is no evidence of waning interest among consumers of daily deal promotions,” said Rice University’s Utpal Dholakia, co-author of “Daily Deal Fatigue or Unabated Enthusiasm?” “In fact, the more deals purchased by an individual, the more enthusiastic they seem to be.”
That’s really good news for Groupon which will likely go ahead and launch its initial public offering of stock in late October or early November, according to the New York Times. The company had delayed its IPO plans due to volatile market conditions for the IPO, which could value the company as high as $30 billion.
Dholakia, professor of management at Rice University’s Jones Graduate School of Business, and Sheryl Kimes, professor of hospitality management at Cornell University, examined consumer perceptions of promotions for nine daily deal companies: Groupon, LivingSocial, Travelzoo, Gilt City, OpenTable, BuyWithMe, ScoutMob, eversave and Restaurants.com. The researchers surveyed 973 respondents in August; 655 were daily deal users and 318 were not.
Good news for daily deal companies
Dholakia said the study is good news for daily deal companies, who have been hit hard in recent weeks with reports of the industry’s decline. Even previous research by Dholakia found that not enough businesses are coming back to daily deals to make the industry sustainable over a long time.
The new study shows significant opportunity for growth among consumers, as only 16.7 percent of the research panel’s population has used daily deals before, and the majority of non-users (90.6 percent) haven’t bought a deal because of awareness or access issues.
“We see significant further opportunity for trial and use of daily deals by current non-users,” Dholakia said.
Overall, daily deal customers tend to have little interest in being seen as different or “fringe” in their shopping patterns, are not very careful with their personal finances and do not think about spending issues all the time. They are interested in trying new products and services to have new experiences to talk about and influence others. They are attracted to a deal because it is a deal, and are likely to be less sensitive to the actual terms of the offer made by the merchant.
“All of these psychological characteristics indicate that the underlying motivations for purchasing daily deals are complex and multifaceted, having to do with more than just saving money,” Dholakia said.
The study brings into question one of the basic beliefs held by most in the daily deal industry. “There is a theory that consumers must be offered ‘deep’ discounts (50 percent or more) to be interested in daily deals,” Dholakia said.
“Our research shows that a significant number of consumers will continue to buy the deals even if the discounts are slightly smaller. This is a significant finding because my previous research showed that businesses find huge discounts to be unsustainable. The industry seems to be operating under the opinion that deep discounts are the only way to be successful, but that’s not the case.”
The study was funded by the Cornell Center for Hospitality Research and Rice University.
New York-based Tremor Video, the largest independent online video technology company, has successfully raised a $37 million round of financing. New York City-based W Capital Partners led the round, which also includes the participation from Keating Capital, Canaan Partners, Draper Fisher Jurvetson Growth, General Catalyst Partners, Meritech Capital Partners, Singapore’s EDBI, Time Warner and SAP Ventures.
Having acquired ScanScout and Transpera in the past year, Tremor Video has extended its market leadership in the interactive video space and reaches more consumers than any other online video advertising company (according to comScore).
“We invest in companies that are leaders in rapidly growing markets, and this is no exception,” said Bob Migliorino, Managing Director of W Capital Partners. “Tremor Video’s performance in the fastest growing segment in online media, combined with Video Hub’s game-changing technology, makes us extremely happy to be working with them.”
Monitor realtime key factors
With the launch of Video Hub in May of this year, Tremor Video has radically changed the network model by enabling brand advertisers and their agencies to monitor in real time the key factors that are driving their campaign performance. VideoHub analyzes numerous video signals and determines which factors are the most important in delivering campaign success, with particular emphasis on the criteria that drive engagement and brand lift.
Based on Tremor Video’s SE2 technology, Video Hub provides marketers with insight into which environments enhance their brands, what provokes viewer engagement, and why a campaign is successful. Tremor Video plans to continue investing in the continued development and market adoption of Video Hub. It will also use these funds to explore additional acquisitions and expand into fast growing markets internationally.
Apsalar nabs $5M for mobile analytics & behaviorial targeting
San Francisco-based Apsalar, a mobile analytics and behavioral targeting platform for iOS and Android apps, today announced it has closed a $5 million round of funding led by Thomvest Ventures. Apsalar plans to use the new funding to grow the development team, expand its product portfolio and ramp up sales and marketing efforts.
The funding includes participation by Thomvest Ventures, Battery Ventures, DN Capital and existing investors. The new round of funding comes on the heels of Apsalar’s $800,000 seed funding in late 2010 from 500 Startups, Mark Goines, Morado Venture Partners, Founder’s Co-op and Seraph Group. Don Butler, managing director at Thomvest Ventures joins Apsalar’s board of directors.
Apsalar’s comprehensive mobile analytics and behavioral targeting platform gives developers and publishers the tools to understand how their apps are used and to identify and deliver personalized content and offers to their most valuable users.
GoSteals offers free daily deals marketplace for businesses
Launching this week at DEMO Fall 2011, GoSteals is a 100% free platform for every business and consumer worldwide to make daily deals. Built on top of the world’s largest mission-critical web services platform from Mediaspectrum, GoSteals is a self-service business model for the daily deal marketplace.
GoSteals empowers small businesses with a fully automated, self-service portal for managing the entire daily deal lifecycle. Within five minutes, merchants can log-on and structure their deals to advertise. That’s five minutes, to gain free exposure and new customers while keeping all the revenue generated in the process.
Merchants create and schedule their deal, maintaining complete and instant control throughout the entire deal life cycle. GoSteals provides them with real-time information on how many customers have reserved the deal. It even automates customer tracking by providing a unique 2-D bar code on every deal voucher
It’s not just local businesses that benefit. GoSteals is free for consumers as well. They can reserve — or “steal” — any deal they want at no cost. No upfront payment is required. They pay only when they actually cash it in at the participating business. If they don’t use it, they lose nothing. There is no risk involved, only the opportunity for extreme savings.
One of the primary drawbacks of daily deals for businesses is that the daily deal firms take significant cuts of every transaction on top of whatever usually significant discount is offered. Some researchers have questioned the sustainability of the daily deals model.
GoSteals launches this week in 15 core markets globally, with plans for universal reach within 60 days.
Is this good news for LivingSocial and Groupon or bad? It seemed as if a new daily deal site popped up every week last year, but many bit the digital dust in the second half of last year.
Following a blowout Black Friday/Cyber Monday shopping weekend, many consumers will continue to hit the stores through the final days leading up to Christmas, according to survey data from PriceGrabber, a part of Experian.
LivingSocial, the DC-based daily deal site that is the second largest player in the space after Groupon, has raised $176 million in new funding, according to 
New York-based 
Launching this week at DEMO Fall 2011, GoSteals is a 100% free platform for every business and consumer worldwide to make daily deals. Built on top of the world’s largest mission-critical web services platform from 
