— blending the mix

Facebook Deals: Why the Network is the Big Deal

So here is my first Marketing Profs blog post whch looks at the way in which marketers might evaluate on which horse they need to put their money. Facebook with its 600m users and smart targeting or established world leader Groupon. Which horse would you back and why?

Did Groupon miss out on a glorious opportunity a few months ago to become billionaires and worry about what was oming next to someone else? OK, so that’s probably a bit of a dramatic statement to make so early into the social couponing game, but with the introduction this week of Facebook Deals, it certainly has to be top of its agenda right now.

The problem is not another couponing entrant into the market (frugaloo in the United Kingdom for example does exactly what Groupon is doing with an arguably more local focus to its deals), but the fact that Groupon relies upon a clunky pass-along process to raise awareness of the deals. If you aren’t subscribed to Groupon deals, it’s only a passed-along email or incentivised posted link to Facebook or Twitter that interrupts your online experience. This is a major Groupon Achilles’ heel but a major benefit to Facebook.

That’s why the recommendation fee is so fantastic—£6 (about $9) earnings per deal (more often than not on some pretty low-value deals) in the world of affiliate marketing is pretty good money, but how else can Groupon motivate this kind of pass-along?

This is where Facebook Deals has the killer ingredient: built-in virality. Let’s look at how Deals usurps Groupon on this front:

  • Home Page link—Users can click on deals at any time during their normal Facebook user experience.
  • Deals Page—Don’t like the first deal? Other nearby location deals are right next door to them.
  • Sponsored Deals—Deals will be visible alongside targeted ads on the right hand side of the page. (I anticipate a time when deals become so popular in any given location that deals will become targeted and served based entirely upon your social graph.)
  • Personal message, wall posts and news feeds—OK, so not very different to Groupon’s process and heck, at least even Groupon gives you incentives to do this, but shared deals become wall/news feed content and as such, highly visible.
  • Onsite notifications—Whenever a friend interacts with a deal you have also liked, you get notified, too. Wouldn’t it be nice to have a travel experience with a friend
  • Facebook Pages—A deal can be displayed on the right hand side of a deal page. Looking at a cinema deal? Also be attracted to click on the accompanying restaurant deal on the right for example.
  • Email—Not the killer tool it once was given that this is Groupon’s main MO, but the email notifications of your and your friends’ interactions with deals and daily updates alongside poking notifications, messages, and wall post notifications for example puts deals at the heart of the social experience.

So, to go back to the title of this piece, it is not the particular local or hyperlocal deal agreements that Facebook have lined up that have the potential to end Groupon’s reign, but the built-in virality of interactions with the deals themselves.

What Groupon has to motivate users to do, Facebook makes happen organically—and that is where true social shopping takes place.


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