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DMS ’10: “Deal a Day” Phenomenon Takes Off

Day Two of DMS ’10 kicked off this morning with an informative session on the “Deal a Day” phenomenon, which is quickly playing a growing role in the local advertising space and is expected to become a $2 billion industry by 2014.

Tim O’Shaughnessy, CEO and Cofounder of Living Social, said that the group buying space exploded in the last year with the entry of a variety of new players—sites ranging from Yelp to Groupon—and the expansion of the trend to countries around the globe. “People like saving dough” everywhere, he said.

Living Social provides daily deal e-mails for a variety of products and services in markets across the country. The e-mails are extremely targeted—for example, in New York City, there are options for offerings specific to Midtown, Downtown, etc.—so that users only receive information about businesses they are likely to visit.

While Living Social began with specials as simple as free drinks at local bars in New York, the company has quickly innovated to also introduce larger scale offerings that go beyond simple discounts. Recently, Living Social rented out National Stadium in Washington, DC and created a ticketed family-focused event in which kids could run the bases and participate in batting practice, while their parents hung out at a bar at the dugout.

The company prides itself on its large editorial staff, which introduces branding concepts such as “12 Days of Gifting” last holiday season, and its local sales force team, which has representatives present in all 65 markets in which it operates.

Living Social also has a successful partnership with the Washington Post in which it provides special local offers for Post users, and splits the revenue with the media outlet.

Perry Evans, Founder and CEO of Closely, outlined his company’s daily deal tool, which put businesses directly in charge of their promotions, and when and where they appear.

From a central dashboard, businesses can turn promotions on and off in real-time depending on demand, and select which social media and mobile channels those specials will appear on. For example, a local bar near a sports stadium can select to only have its promotions run on game day and turn them off by a certain time. And in addition to social media and mobile channels, businesses can integrate a live promotion widget on their websites so that their specials are always up-to-date.

Evans said his hope is to integrate social marketing and daily deal campaign distribution and simplify the process so businesses don’t need to build individual campaigns for each social network.

And interestingly, Evans said he sees opportunities for his company to leverage Yellow Pages sales presence to help sell his product as part of an integrated advertising package.

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