Facebook is launching its long-awaited deals program, called Social Deals, in five test markets: San Francisco, San Diego, Dallas, Austin and Atlanta. Some observers are wondering as it rolls out, though, whether it can stand up to the growing sense of daily deal fatigue.
Not Check-in Deals
Even Facebook has a related service already in this space.
This offering - to be distinguished from an earlier project called Facebook Deals now renamed "check-in deals" - incorporates, not surprisingly, many social media elements. If it is related to an event, for example, it can be tied to the Events section on the right hand menu of the Facebook page, BIA/Kelsey analyst Peter Krasilovsky noted. Also users can also see which friends have purchased the event.
Social Deals has been designed for businesses to be able to add their own deals rather than rely on the limited slots available in the email marketing-based offerings such as Groupon, Krasilovsky also said. Users pay for the offer up front, using, if they want, Facebook Credits.
By contrast, the now-renamed check-in deals are free to users, are mobile-centric and work like conventional coupons, Search Engine Land notes.
Facebook will surely collect commissions on the deals, but it appears that it will earn advertising revenue as well, Krasilovsky said. "Facebook indicates that businesses are “eligible” to advertise sponsored units."
Bombarded
Facebook is entering a market that is close to, if not at, saturation, and consumers are showing signs of deal fatigue. Even All Facebook, a publication devoted to covering Facebook, is ambivalent about the service. "The new Facebook deals service… is now blasting out commercial offers through two channels that I personally like to have free of advertisements: my inbox and the feed," it said in a review. It's not that these channels aren’t being used for commercial purposes, it acknowledged. "However when the owner of the channel decides to exploit it themselves, something about it feels different."
The daily deal market is on track to reach $873 million in 2010 to $3.9 billion in 2015, for a 35.1 percent compound annual growth rate, according to BIA/Kelsey. As of March 1, 2011, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States.
