Google Offers enjoyed significant growth in September, thanks to advertising a daily deal on its homepage and launching in Austin, Boston, Denver, Seattle and Washington, D.C.
Google (NASDAQ:GOOG) Offers, the local deals service the search
engine provider intends to use as an incentive to get users to patronize its
Google Wallet mobile payment service, has stormed back from a lethargic August
to see robust sales in September.
Daily deals aggregator Yipit noted that revenue for
Offers, a Groupon-like service that offers consumers discounts of 50 percent or
greater in over three dozen U.S. cities, dropped 23 percent from July despite a
22 percent increase in the total number of offers.
The firm noted that revenue
per deal declined 37 percent, propelled by a 46 percent decline in the number
of vouchers sold per deal.
Offers has enjoyed quite a bounce back in September. In
the third week of the month, Google has already surpassed last month's total
revenue of $265,000 and is on track to more than double this figure by month's
end, Yipit said. That's a half a million dollars for the fledgling service that plays were the barrier to entry are nil.
Thanks in part to a high-profile heads-up on its Google.com homepage, Google's
most notable deal this month was an offer for tickets to the Museum of Natural
History in New York, which grossed more than $85,000. Now Google knows Google.com
makes for an effective advertising vehicle.
Unaiz Kabani, a data analyst for Yipit,
said in a blog post it isn't that Google has piled on deals in its markets;
deals are just performing better than they had, with sales per deal up 160
percent (from $2,794 to $7,256).
Also, the number of vouchers sold has improved 5 times
the August rate, from 169 per deal to 893 per offer. That's more than Groupon (736)
and LivingSocial (372).
A Google spokesperson declined to confirm or comment on
Yipit's numbers for eWEEK, but noted that the company is pleased with the performance of
Offers, which launched first in Portland last April and has seen an increasing
stream of new cities as targets. This includes Dallas, where Offers launched
Sept. 26.
Kabani attributed Google's success to working with
high-profile brands, such as Fandango in Portland and Amoeba Music in San
Francisco. The increase in Offers' sales also coincides with its launch
this month in 5 new major markets, including Austin, Boston, Denver, Seattle
and Washington, D.C.
Can Google keep up this Offers growth? It's tough to say.
There are over 300 daily deal providers or aggregators in
the market today. Consumers are woozy from deal fatigue, seeing some of the
same deals from Groupon, LivingSocial and Offers over and over, many of which
are not attractive.
Recognizing the moving target that daily deals have become,
Microsoft just launched Bing Deals, which is another deal aggregator, like Yipit.
Even so, Kabani likes what he sees from Google Offers this month:
"Google's willingness to leverage its powerful existing distribution
channels and its recent strategic moves in the local e-commerce space
demonstrate that Google Offers is well-positioned to compete with the likes of
Groupon and LivingSocial if, and when, Google chooses to deploy the full suite
of tools at its disposal."
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