BIA/Kelsey Forecasts U.S. Consumer Spending on Online Deals to Reach $3.6B in 2012

CHANTILLY, Va., Sept. 17, 2012 /PRNewswire/ -- BIA/Kelsey, advisor to companies in the local media industry, forecasts U.S. consumer spending on online deals (including daily deals, instant deals and flash sales) to reach $3.6 billion in 2012, an increase of 86.9 percent over 2011. BIA/Kelsey projects 23 percent growth in deals spending in 2013, followed by mid-single-digit growth in later years. This translates into deals spending climbing to $5.5 billion in 2016.

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"After astronomical growth in 2012, the online deals marketplace is showing signs of maturity," said Peter Krasilovsky, vice president and program director, BIA/Kelsey. "There has been consolidation in the space, deal conversion rates may be suffering due to over-familiarity and the market may be near saturation. Still, market leaders continue to exhibit growth as market awareness and penetration spread."

Going forward, BIA/Kelsey envisions online deals will become an anchor for a platform of non-advertising small-business services. These services include instant mobile deals, loyalty products, promotions, reputation management, transaction processing and ecommerce. While these services have already been introduced to the marketplace, they have not made a significant impact on overall deals revenues to date. Eventually, BIA/Kelsey expects they'll become an anchor element in the broad local play.

Merchant Adoption of Deals  
Findings from the latest wave of BIA/Kelsey's Local Commerce Monitor (LCM) study of U.S. small businesses reinforce the strong continued interest in deals participation by local and small businesses. More than one-quarter (26 percent) of small businesses surveyed said they are either "very likely" (15 percent) or "extremely likely" (11 percent) to participate in a deal in the next six months. An additional 24.3 percent said they are "somewhat likely" to do so, indicating more than half of the small businesses surveyed have a favorable view of deals.

BIA/Kelsey is presenting highlights from LCM Wave 16 today during a briefing to its advisory services clients at the SMB Digital Marketing 2012 conference in Chicago.

The online deals forecast is available to clients of BIA/Kelsey's Marketplaces advisory service. Findings from the LCM study are published in a range of reports for the firm's advisory services clients. For information on these services and access to the forecast and LCM study findings, call (800) 331-5086 or email [email protected].

Related charts are available online at http://www.biakelsey.com/images/LCMWave16Results.gif and http://www.biakelsey.com/images/USConsumerDealSpending.gif.

About BIA/Kelsey  
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research, Continuous Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey's annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company's Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey).

SOURCE BIA/Kelsey