The recent problems, experienced by the leading giants of the daily deal industry, has undermined the belief of many businesses into the efficiency of running daily deal promotions. It really happens that companies do not get expected results, e.g. huge influx of customers and rise in sales. Customers may come just once, get discounted goods and leave forever, the profit expectations can fail because of poor planning of the deal campaign. There are many pitfalls of daily deals and it is a hard task to foresee and avoid all of them.
However, let's take a look at daily deals from another perspective. What about taking them as a form of advertising but not a source of an immediate profit? Traditional forms of advertising, e.g. ads on TV or in newspapers, requires advance payment and these ads also do not always meet initial expectations. Daily deal promotions are more beneficial to businesses because merchants pay to daily deal site only after a coupon is redeemed. So, even if a merchant loses money because of too deep discount, each redeemed coupon is a real chance for him to meet new potential customers. Whatever the instant financial result of a deal, it's a great opportunity to show the quality of products and to build connections with potential clients.
What do you think about daily deals? Is there future for this form of advertising or is it coming to an end?