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Facebook Groupon Living Social

Now Facebook swoops into coupon discounts with deals in five US cities


By The Drum Team | Editorial

April 26, 2011 | 3 min read

It doesn't pay to stand around in the fast-moving world of social media. Facebook's money-off "Deals" service has been launched in five US cities but could soon become a player worldwide.

The service is limited to San Diego, San Francisco, Atlanta, Dallas and Austin at the moment, but Facebook hopes to expand the service to other cities if this trial is successful.

The current leader in the field, Groupon, with 70 million members, rejected a $6 billion takeover offer from Google last December. Facebook has more than 600 million users and if it opens up "Deals" worldwide, has the potential to dwarf Groupon. "We believe this is a win for the consumer in the end. Facebook has the best opportunity to take advantage of Facebook," Jascha Kayakas-Wolff, Vice President of Marketing at Involver, a company that develops social marketing tools told ABC News. The online discount industry is one of the fastest-growing business sectors in the world. Some sites offer better deals if friends buy in. Others require a minimum number of purchases before a deal becomes available. However, many offers have no strings attached. The sites have until now worked primarily with local businesses - but food giant General Mills last week offered customers in Minneapolis and San Francisco a Groupon deal: $40 worth of groceries for $20, choosing from their brands like Betty Crocker, Green Giant, Hamburger Helper and Kix. The offer included a booklet with $15 worth of coupons. Companies from The New York Times to telephone company AT&T are also starting their own discount services. Facebook won't disclose the commission it is taking and says it hopes to make the discount landscape more social. "We're building a product that is social from the ground up," said Emily White, director of local for Facebook. "All of these deals are things you want to do with friends, so no teeth whitening, but yes to river rafting." Facebook says users can also buy unique experiences like behind-the-scenes tours and backstage passes. Offers on Facebook will be available for between one and seven days. Users can access them through the "Deals" tab, a daily email and postings from friends.
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