Last March, when Groupon unceremoniously dumped Andrew Mason as its CEO, the discussion quickly turned to the fate of the company itself and whether Mason’s ouster means anything in the big picture.
Groupon, after all, isn’t a lone failure in an otherwise thriving sea of daily deals companies. The industry is depressed in its entirety.
Last fall, Amazon was even forced to concede that LivingSocial is a mega money loser as earnings pointed to LivingSocial’s net loss of $566 million with revenue of just $124 million.
A growing number of industry watchers and analysts believe that the fate of daily deals rests on the speed at which mobile payments and mobile advertising intersect.
“Digital coupons aren’t cool anymore,” says analyst Brian Tetherton of IGC Co., a financial marketing and management firm. “They need to be buoyed by the rising tide of related technologies. Highly relevant, well-targeted ads and daily deals will be gladly received by consumers so long as they can be easily stored (Apple’s iOS Passbook, perhaps), retrieved, and redeemed at the point of sale.”
Tetherton sees the respective progress of both the mobile payments and mobile advertising industries leading to an inevitable and inextricable fusion.
Dan Meyers, owner of a third-generation dry cleaning service in Hobart, Indiana, is looking forward to that development.
“We chucked our old cash register last year and now use a mobile POS solution from PayAnywhere,” he explains. “Consumers like the convenience and security of paying with a quick swipe when we deliver to their door.”
Although the transition to mobile payments has been a positive experience for Meyers’ small business, daily deals have been another matter altogether.
“I’ve done the deals and coupons before,” he says, “but I get the feeling customers are bored with them. If I can better entice or target current or prospective customers with an ad or coupon and then redeem it at the point of sale, now that will do a lot of good for me.”
It will also do a lot of good for three industries – mobile payments, mobile advertising, and daily deals – that could use one another’s help today.
In addition to his optimism for mobile payments, Tetherton is excited about the potential of mobile advertising, as illustrated in the last twelve months by leading mobile ad networks.
According to On Device Research, 70% of mobile users consider mobile ads on smartphones to be a “personal invitation,” not an intrusion.
Helping to change opinions in favor of mobile ads are the efforts of top mobile ad networks that have been praised for highly effective innovations in mobile ad formats and ad targeting capabilities.
Tetherton sees a time in the near future when the cutting edge, industry leading technologies like those seen today from mobile payment platforms like PayAnywhere, mobile ad networks like Millennial Media, and daily deal providers like Groupon intersect in a way that will delight and enrich consumers at the point of sale to an extent never before observed.
Says Meyers, “that day can’t come fast enough.”