In the battle of Groupon versus LivingSocial, there is one storyline that pits company versus company. It has them in an all out battle over deals, press, users, big brands, and more. It plays well in the news, and it probably plays well internally too as a motivator.
The other storyline, the less sexy but more important one doesn't care who "wins" between the two, because the list of companies and individuals that have already won is impressive. I'm as addicted to Business Insider's salacious stories about meeting the next billionaires. The real winners, though, are Google, Facebook, and just about every major advertising platform.They will be recipients of this sector's almost one billion dollar online ad spend in 2011.
One billion? Maybe that's high, but probably not off by all that much.
Those in the daily deal space don't call themselves lead generators, but for those of us, like myself who have participated in and followed other performance-based marketing companies, the two worlds have a lot in common, one of the biggest being a well defined funnel and specific metrics on user value. The result is a business that can grow as a function of the media they purchase, but any media that doesn't back into a profitable customer won't be continued.The dna that helps lead gen companies scale is the same that helps the new kings of customer acquisition.
As Alex Rampell wrote in TechCrunch, he believes Online to Offline commerce is a trillion dollar opportunity. That's why a billion spent on media is nothing. It also explains why the largest company in the online lead generation space has a valuation of just over a billion, but the largest player in the daily deal space has a valuation approaching ten times that.
Followers of online lead gen always ask me what the next vertical is. What will be bigger than education and/or just how big will insurance get? The answer to the next vertical question, though is here, and it's curated commerce - daily deals, flash sales / private sales, and the up and coming ecommerce as a service businesses like Beachmint and Shoedazzle.
Groupon vs. LivingSocial? It's a fun but incorrect question.