Going Beyond Email: Multi-Channel Marketing and the Future of the Deals Industry

Going Beyond Email: Multi-Channel Marketing and the Future of the Deals Industry:

On the surface, the deals industry has been powered by something of a first generation social tool – email. Even with list size and the cost of customer acquisition measured in the tried-and-true language of email marketing, there’s still significant uncertainty around how “deals” will be structured, delivered, and consumed in the future.

The dominant paradigm today in the deals space is a familiar one – provide your email address, and receive exclusive deals straight to your inbox. Dozens of companies have followed Groupon’s lead in entering this burgeoning 5 billion dollar a year industry, hoping to strike it rich off of the seemingly magical combination of discounts and the ostensibly limitless consumer appetite for a good deal.

However, the flood of entrants into the space has resulted in consumer deal fatigue with subscribers inundated with a plethora of daily deal emails, making differentiation increasingly difficult, and reducing the efficacy of email as the primary distribution channel.

As a result, we’re now seeing many businesses evolve their distribution models in response to this new competitive pressure. Groupon and LivingSocial took the lead in trying to address this with “deal marketplace”-type concepts, providing the consumer with the chance to browse through and discover hundreds of deals without being forced to open multiple emails.

Additionally, mobile delivery has become one of the major points of investment, with industry players hoping to users based on location, friend proximity, and more. Expect to see significantly more movement here in the coming year, as participants look to leverage their lessons learned from 2011 via partnerships with location-based platforms like Foursquare and Facebook Places, as well as through internal product development.

It’s critical to note that this shift has favored publishers and media companies with more powerful assets than an email list. Those with radio stations, websites, and popular social media channels can now invest in clever marketing mechanisms to embed deals into their content, creating a seamless experience between content and commerce.

Beyond simply showing offers in place of traditional display advertisements, we’re seeing many publishers creatively blend editorial with commerce. While still maintaining the editorial integrity these outlets are known for, they have found numerous strategies for integrating with editorial in ways that leverage this natural synergy. For example – a few of our clients, including DailyCandy Deals and Boston.com, deployed gift guides in conjunction with the holiday season, with deals sprinkled in among the recommendations.

Look for this trend to continue in the coming year, with leading at-scale media companies leverage everything from deal promotion through branded radio and broadcast segments, to customized deal-delivery widgets embedded throughout a brand’s digital footprint. Expect the big B2C players to look to compete in this area, as we’re already seeing with some of the partnerships that Groupon has pursued subsequent to their S1 (the Mint.com delivery of contextual Groupon deals to one’s account page is a example).

As these B2C players don’t have any of their own content assets (outside of deals), it’s likely that partnership will be the model of choice, at least in the short term. Given the high cost of customer acquisition in the B2C deals space (anywhere from 5-12 dollars an email address), one has to challenge the economics associated with these partnerships – and how sustainable they’ll ultimately be for the B2C providers.