Consumer Spending on Deal-a-Day Offers Likely to Reach $3.9B in U.S. by 2015, According to BIA/Kelsey

CHANTILLY, Va., March 3, 2011 /PRNewswire/ -- BIA/Kelsey, adviser to companies in the local media industry, released a new forecast today on U.S. consumer spending on deal-a-day offers, which the firm expects will grow from $873 million in 2010 to $3.9 billion in 2015, representing a 35.1 percent compound annual growth rate (CAGR). While this is the most likely growth case, BIA/Kelsey suggests 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. Considering these variables, 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).

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"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. They are also subdividing existing metros to provide deals closer to where users live, which we believe will help offset any drop-off that may occur due to consumer fatigue as the novelty of the form fades."

While Groupon and LivingSocial lead a marketplace of 200-plus players, 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. As of March 1, 2011, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States.

"The combination of fun offers and convenience makes deal a day a very attractive way to reach local users, and for publishers to work with small businesses," said Peter Krasilovsky, vice president and program director, Marketplaces, BIA/Kelsey. "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."

BIA/Kelsey President Neal Polachek added, "With the release of this latest forecast, BIA/Kelsey offers its clients and community additional insight and expert coverage of the multidimensional local media space."

BIA/Kelsey's Deal-a-Day Forecast (2010-2015) is available to clients of the firm's advisory services. For more information on becoming a client, contact Steve Passwaiter at (703) 802-2973 or [email protected].

Deal a Day at ILM East

BIA/Kelsey analysts will highlight details from this new forecast at Interactive Local Media East (ILM East), March 21-23, Boston, Massachusetts. Day 3 of the conference features a half-day SuperForum devoted to "The Local Offers Revolution: Group Buying, Promotions, Flash Sales and SMB Services," in which LivingSocial Chief Executive Officer Tim O'Shaughnessy will keynote.

The SuperForum includes a number of speakers from across the deals and promotions space, including JP Bedoya, senior director, product, Citysearch; Jim Boutin, cofounder and COO, Local Thunder; Brian Costello, GM and VP, digital media, The RedPlum Network, Valassis; James Green, CMO, Travidia; Jimmy Hendricks, CEO, Deal Current; Ken Kalb, CEO, Analog Analytics; Jonty Kelt, cofounder and CEO, Group Commerce; Jim Moran, cofounder, Yipit; Victoria Ransom, founder and CEO, Wildfire Interactive; and Nate Richardson, president, Gilt City.

For more information about ILM East, including the complete agenda, list of speakers and companies attending, visit www.biakelsey.com/ILMEast2011.    

About BIA/Kelsey

BIA/Kelsey advises companies in the local media space through consulting and valuation services, research, Continuous Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey's annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at www.biakelsey.com, on the company's Local Media Watch Blog, and on Twitter at http://twitter.com/BIAKelsey.  

SOURCE BIA/Kelsey

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