Deal aggregators sort through daily deals and find the best ones for consumers in return for a piece of the action. They are primed to make up a healthy part of the extended family of deals products. But it isn’t certain whether they’ll maintain the cooperation of major deals companies. LivingSocial and others have made efforts to close off some of them.
But aggregators such as The Dealmap, Yipit, Dealradar and 8coupons are making a go of it, convinced that email fatigue is inevitable, and that consumers need help sorting through 500+ daily deals. Also convinced, apparently, are Highland Capital Partners, RRE, DFJ Gotham and IA Ventures, which each participated yesterday in a $6 million, Series B round for Yipit.
As the news broke, Yipit reported that it aggregates 500 daily deal sites in 32 different cities (although about one-third of those sites, or 161, are for New York). It also says it has 250,000 subscribers, sending roughly 20,000 people a day to third-party sites. Between 5 percent and 10 percent — or 1,000 to 2,000 — buy a deal.
My colleague Jed Williams sat down today in New York with Yipit cofounder James Moran. Moran told Jed that there are many reasons for optimism about the space, although the ramp-up hasn’t always been easy. Personalization, for instance, has struggled because there aren’t enough quality deals to match personalized preferences. “Locationized personalization” seems to have a better shot.
And then, there is the question of what is the ideal location radius. In New York, it’s 10 to 15 blocks. In Dallas, it is a 30-minute drive radius. Moran notes that Yipit has worked to tackle this issue, aggregating deals for a user’s work and home routes. But it is still mulling over how to handle subway routes. One thing that has developed nicely is that Yipit has ramped up a lot of destination and search traffic and is no longer tied so much to emails, which don’t convert as well.
Jim Moran is a featured speaker at our Deals 3D conference in San Francisco July 18-19, along with executives from The Dealmap and 40+ others.