Consumer spend on deal-a-day offers to surge in next four years: report

Consumer spending in the United States on deal-a-day offers is likely to go from $873 million in 2010 to $3.9 billion in 2015, representing a 35.1 percent compound annual growth rate (CAGR), a new report said.

BIA/Kelsey, adviser to companies in the local media industry, said a number of variables will have an impact on the actual development of deal a day, such as growth in the number of cities/sites, registered users, transactions per year for the average user and the average price per transaction.

According to the report, deal a day could grow to as much as $6.1 billion by 2015 (47.4 percent CAGR), while a very conservative outlook pegs the space at $2.1 billion (19.7 percent CAGR).

Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008, said Mark Fratrik, vice president, BIA/Kelsey. We expect this to continue as companies in the space are rapidly adding markets and increasing total user count.

As of March 1, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States.

Groupon and LivingSocial lead a marketplace of 200-plus players, while the broader field includes destination sites and white-label providers working with local media providers such as directory companies, newspapers, and radio and television operators, BIA/Kelsey said.

Peter Krasilovsky, vice president and program director, Marketplaces, BIA/Kelsey, said: We expect to see some shift in local media spending resulting from the adoption of deal a day by local advertisers. We also believe that deal a day doesn't exist in a vacuum. It will become a part of the growing deals and offers landscape.