Over the past year, we’ve shared news on how many companies in our industry are launching new daily deals initiatives in response to positive early feedback from local businesses and consumers. Just last week, our annual conference in Las Vegas featured a panel with Rich Razgaitis of Reach Deals and Martin Tobias of Tipper, in which they discussed the opportunities and overwhelming popularity of this rapidly growing model.
Yesterday, Facebook announced plans to expand its local daily deals portfolio by testing a service that focuses on offering deals that are social in nature – specifically, deals that friends will buy and experience together (such as tickets to concerts or sports games). Facebook Deals, which will initially be available in five U.S. cities—including Atlanta, Austin, Dallas, San Diego and San Francisco—will differ from existing sites such as Groupon and LivingSocial in that it will not focus on offering deeply discounted deals.
As Emily White, Facebook’s director of local initiatives, told The Wall Street Journal, “[Facebook Deals] is not about mimicking an existing business model and force fitting it into Facebook. The premise here is that people come to Facebook to have social experiences with one another.”
White said that if the primary focus of friends doing something is getting together with one another, then deep discounts aren’t necessary to drive sales. The Wall Street Journal notes that this approach may be more appealing to local businesses, some of which are wary of the long-term benefit of attracting customers on the basis of discounted services.
Yesterday’s announcement illustrates the importance that Facebook is placing on attracting local business advertisers. Last November, we reported that Facebook had launched a mobile-based deals offering that allows retailers and other merchants to offer coupons and special deals through its popular mobile application.
And at our annual conference last week, Yvette Lui, Facebook’s director of North American sales, told our audience that Facebook is thinking about how to reach small businesses on a greater scale. Lui said one of her key learnings since joining Facebook is that all local businesses are already social by design, so engaging consumers via the social network is a logical way of attracting new customers.
I think Facebook’s new service represents an entirely new concept for local deals that will differ from existing offers and will benefit from the social network’s unprecedented reach and membership base. I look forward to seeing it in action!
For more information, check out White’s post on The Facebook Blog.