Dealicio: The Social Impact of Daily Deals

I recently had the opportunity to sit down with Graham Clarke, CEO of Dealicio, an offshoot of 53 Technology. Dealicio is a white-label platform enabling local media companies to launch, manage and advertise daily deals. Dealicio recognized the power of social media in driving deals and spreading them through social networks from their earlier work with half-off offers. What Clarke envisioned for Dealicio was “a simple platform that would make it easy to launch and manage deals to generate profits.”

While many of the larger daily deal companies seek to be the only provider or the “powered by” provider, Dealicio is set up as a flexible platform that can be branded by the media company and integrated with other internal platforms such as e-mail server, payment systems and back office systems. “Our goal has been to make it a closed loop offer that makes it simple to integrate into a media organization,” says Clarke. Dealicio’s model is based on a per-transaction charge, but allows additional flexibility for a company to bring in affiliates to extend the offer and generate additional revenues.

Facebook integration is a key aspect of the Dealicio platform. Every deal is geotargeted and indexed, and tags are added for easy social sharing. Clarke recognizes that, “Facebook is a significant traffic source with more people interacting and turning to this source more so than even e-mail or search.” By integrating with Facebook, Clarke sees that, “reach and SEO are significantly enhanced because all deals are connected to a company’s social media stream.” Using Facebook’s Open graph protocol enables sites to integrate Web pages into the social graph. This means when a user clicks a “Like” button, a connection is made to the Web page and a graphic appears in the Facebook profile helping to further promote the offer.

When asked about the future of daily deals and group buying, Clarke felt that, “the transactional model is here to stay for both local merchants and brands.” As a form of pay-per-action, deal flow is measurable and demonstrates a clear ROI for advertisers if they are clear on the costs and initial risks of offering discounted deals. While discussing what will further compel the daily deals space, Clarke sees, “mobile as one of the major forces pushing the daily deal space because of geotargeting, and the addition of mobile transactions once they are formalized and adopted by consumers.” While it is still early days for the segment, Clarke feel strongly that, “some consolidation will occur for the basic daily deal providers, but there is still plenty of room for innovation particularly for segment specific deal offers such as electronics, clothing, children’s items and others.”

What the daily deal space has done is create, what Clarke calls, “transaction pipelines.” The real question for the daily deal providers and platforms is what other transactions are possible within this new pipeline. Clarke feels, “Dealicio’s growth is only limited if we fail to innovate and to respond to the needs of our media partners.”