Google is looking to make further inroads into the daily deals market, thus seriously effecting the likes of the current industry giants LivingSocial and Groupon. It is planning to introduce its daily deal offers on its own adwords platform and it is expected to roll out to all advertisers by the end of February 2013.
The new feature called Google's Offer Extensions will pair ads in search result pages with time limited daily deals and special discounts. This feature has been in beta release for some time and it touted as the next logical step. With this enhancement advertisers can add a coupon-like discount offer to their AdWords ads, either for immediate redemption online or for printing and in-store use.
Google's daily deal feature, if successfull, could tear into the current daily deal business model, where the daily deal provider expects the merchant to offer 50-90% discounts on their products and services and then take a 35-50% cut of the remainder for themselves.
Also, advertisers can track purchases, allowing local businesses to connect the dots between online marketing and in-store purchases. It is still unknown if there will be an integration with Google Maps, which would enable Google to deliver incredibly targeted, relevant, and immediately actionable advertising right to a mobile device.
As Larry Kim, founder of Wordstream writes in his blog post on the subject: "Google famously attempted to buy Groupon for $6 billion a few years ago, when Groupon was still in its ascendancy and could, seemingly, do no wrong. Now, of course, the company is not quite as hot, sporting a market value of just $3.8 billion. Offer Extensions, well integrated into Google's vast array of mapping, email, web search, and other properties, cannot be a good thing for the Chicago deals company, Groupon. But they will be a good thing for advertisers, says Kim: "Coupons mean more eyeballs and attention for advertisers. Even if users see your deal, save it for later, and forget about it, they've still interacted with your business and brand more than they might have if you didn't put out an ad offer."
This daily deal feature is a smart move from Google and it will benefit advertisers and consumers alike.