Within the past week, online giants Facebook and Google have both announced that they are entering the group coupon business. Facebook has launched its new Facebook Deals service in five US markets. This comes as no real surprise, as Facebook first made this announcement weeks ago. But the day has finally arrived. And Google recently began its Google Offers service, initially only in Portland, OR.
These new services raise lots of interesting questions about the group coupon industry, but chief among them has to be, Is there enough room for Facebook Deals, Google Offers, Groupon, and Living Social to all co-exist? Time will tell of course, but I would argue no….for the following, related reasons.
- Business owners, particularly of the small- and medium-sized variety, don’t have time to create and manage these types of offers on multiple platforms. They will be willing to market their business through one or perhaps two of these services, but not all of them.
- Consumers don’t want to receive several emails every day from these group coupon services. Their in-boxes are already cluttered enough as it is…do they really need to receive four “$10 for $20 worth of food” offers each morning?
I predict that in time, both businesses and consumers will tire of having so many group coupon services to choose from, and one or two of these companies will emerge as the winners. Groupon and Living Social have the significant, built-in advantage of large subscriber bases. Facebook has more than 600 million users–how many of them can they convince to use Facebook Deals? Google has a mixed track record of success when introducing new products. Who do you think will emerge as the group coupon champion?
Another take from Ken Tucker: I actually think that both Facebook and Google have a great shot at being major players – there is a backlog currently to get your deals on the other sites, so that helps Google and Facebook. Second, with Google Maps and the growth in smart phone adoption, Google has a great presence themselves to start with. Of course Facebook, with 600 million users, is well positioned too at the start.
Groupon is social buying in the sense that a group on people have to by the deal for the deal to take, but it isn’t really shared socially the way Facebook is set up to be. Social proof is big, and Facebook is going to make it very easy to share what deals a person has claimed.
With Groupon acquiring the parent company of Whrrl in the last week or so, it now has the potential to improve its social sharing. Google really needs to find a way to get into the social sharing space too.
Ultimately, I think it comes down to which is most effective at social sharing to see who emerges as the group coupon champion.