Facebook has decided to shut down Facebook Deals after only a four month trial.
“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks,” Facebook told Reuters.
The product, which launched in late April, was an attempt to bring the popular daily deals phenomenon to Facebook’s 750+ million users. It launched in San Francisco, Austin, Dallas, Atlanta and San Diego, but quickly rolled out to other cities.
The idea was for Deals to serve as an incentive for Facebook users to integrate the also now defunct Facebook Places (a poor copy of Foursquare) in their daily lives — and they were also an incentive for marketers and major brands to put more money into the Facebook platform.
However, the Facebook Deals were less like a Foursquare coupon awarded to the user after a checkin and more like a Groupon voucher, meaning the user had to buy a certificate for a certain good or service at a steep discount, typically half off its retail price, then redeem it later.
Examples of the new breed of Facebook Deals from brands include “unlimited bowling with six friends for an evening for $60 (75% off)” and “luxury winery tour and 25% off all wine purchases for $50.”
The market for daily deals has become more competitive in recent months, however, and many are questioning the entire business model in light of Groupon’s questionable financials.
It’s no secret that a brand’s success on Facebook is largely contingent on Facebook-only discounts and content, but Facebook’s Deals had been – in the words of Vinvius Vacanti, co-founder of Yipit.com – “an underwhelming product and experience”.
This does not necessarily mean that daily deals are ineffectual. Vacanti said it best: “I don’t believe this means daily deals are not a viable business. It more suggests that large media and tech companies can’t just ‘turn on’ daily deals and expect them to work. It has to be more thoughtfully integrated into their existing product”.
In other words, customization is still king. And, consumer engagement needs to be customized to the space, the way people interact within that space and the content and brands they care about. AdAge conducted a study about the deals space revealing that 52% of people feeling overwhelmed by the amount of emails they receive and 60% feel the deals market is just too crowded.
With this much competition, the quality of the deals can dwindle to the point of becoming SPAM instead of exclusive content customized to the consumer’s interest.
As Christopher Au tweeted, “Nobody needs more laser hair removal daily deals in their inbox anyway.”