Competition Among Daily Deal Platforms Intensifies

By Webimax Company | March 21 2012 2:32 PM

The prevalence of daily deal sites is growing and competition among the top players is heating up. LivingSocial launched in 2007 and Groupon followed in 2008 and have been atop the industry sector since that time. Recently, Google has made the push to coupons with their Google Offers spurring Amazon to increase efforts with their AmazonLocal platform. Amazon launched this platform last summer and is now available in 90 markets throughout the US.

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Amazon launched a deal yesterday through the platform offering their $10 gift card for $5 to raise customer awareness and gain ground on its competitors in the sector as Amazon currently stands as the fourth-largest daily deal company behind Groupon, LivingSocial, and TravelZoo. By yesterday afternoon, customers bought 900,000 Amazon cards successfully giving the platform a boost in their exposure. This Amazon deal comes partly in response to a recent expansion by Google Offers to four more markets (Austin, Houston, Philadelphia, and Miami).

Further, Amazon is using the least expensive version of the Kindle e-reader, the Kindle with Special Offers, to extend the reach of its deal platform. This is a perfect example of a company leveraging a technology of theirs in a related market to push a new service. This strategy is used by many companies including Microsoft and Nokia with their recent partnership, where patents or products can be leveraged to expand into a new market. The Kindle with Special Offers requires users to view sponsored screensavers and sale promotions, and then shoppers can buy daily deals from the Kindle itself.

It appears that each of the daily deal giants are utilizing paid search in their advertising efforts but are not using SEO to drive organic traffic. Doing a simple search for Groupon, Google Offers, and LivingSocial all yield paid ads on Google search engine results pages (SERPs). AmazonLocal is noticeably absent in this regard and could increase their paid search ad efforts to compete on a higher level with the three leaders. It appears organic SEO is not being utilized by any of these companies, but seeing as how paid search is, SEO could be integrated as well to build a coordinated strategy to drive more overall traffic.