First Came Groupon, Now Daily Deal Services Abound

According to The Tampa Tribune, in a mad rush, the advertising world has fallen head over heels in love with daily discount deals.

Websites like Groupon, LivingSocial, Gilt,, and a string of others have hit pay dirt with a marketing concept that’s spot on with our exhaustion with being so frugal: A once-a-day ridiculous discount on something we’ve probably long denied ourselves.

A nice massage, an artisan pizza, a nice round of golf, Botox even. Now, when our e-mail boxes go “ding” with 50 or 75-percent off deal for our favorite place — who’s not going to reach for their credit card?

To be sure, there are good coupons to be had in lots of places. The Entertainment books of coupons sold through fundraisers have been stuffed with these deep discount deals for years. But somehow this nascent, online “collective buying” business model is exploding with success — partly because the deal companies can ever-so-profitably play middleman.

Daily deal sites recruit subscribers to receive daily e-mail or text-message blasts with a ridiculous discount on a fixed number of coupons. Even if 9 out of 10 deals don’t interest you, there’s probably one deal you’ll jump to redeem. And with the site, if you recruit three of your friends to take the offer, your deal becomes free. How viral is that?

Daily deal sites can offer a merchant a near guarantee that customers will show up, coupon in hand. That’s because most daily deal sites require subscribers to pay up front for the deal, such as $10 for $20 worth of pizza. It’s why some merchants have actually complained that too many customers showed up after posting deals.

Photo by Groupon.

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