A few weeks ago, I decided to end my four and a half year relationship with my flip phone. I upgraded to an iPhone 4 and have not looked back since. One of the many benefits of having a smartphone, as I’m sure most people know, is downloading applications. One of the first applications I downloaded was Groupon. Groupon is currently the leading player in the group-buying market. Other sites that exist include LivingSocial, BuyWithMe, and Eversave. These three sites are currently based in Boston or started there and therefore, The Boston Globe, having not offered a group buying service in the past, lost some advertising revenue to these popular sites. The saying goes, “if you can’t beat ‘em, join ‘em” and so The Boston Globe recently launched Boston Deals through its site Boston.com.

Investopedia.com’s Porcshe Moran explained “The Economics of Group Buying Sites” earlier this month. Group-buying is a pretty simple concept. Consumers visit the site of their choice (e.g. Groupon.com) and sign up for free, providing an email address and the city they live in, and all subscribers then receive daily emails detailing the deal of the day. The deals are localized, and each one is usually at least 50% off the regular price. However, the deal is only made available if a certain number of people purchase it within a certain timeframe. Therefore, if not enough people purchase the deal, no one is able to realize the savings. You are able to share the deal and encourage others to take advantage of it through the use of email and social media. For example, today’s deal on Groupon for the Philadelphia area is “$25 for $50 worth of classic American fare at Mile High Steak & Seafood in Glen Mills.” The deal is on because enough people have purchased the coupon, about 240 so far. Mile High better gear up for an influx in business between now and October (when the coupon expires).

To demonstrate how popular group buying sites have become, at the end of last year, Google attempted to purchase Groupon through a $6 billion buyout. Groupon rejected the offer and Google is now rolling out its own site called Google Offers, which is “currently in BETA, and only people in New York City, San Francisco, Portland, and Oakland can subscribe,” according to Investopedia.com.

Boston’s NPR news station WBUR, 90.9 FM, is one of the news outlets that reported the launch of Boston Deals and explains that “despite the crowded group-buying market, the Globe has something many of its competitors don’t: a built-in customer base: Globe subscribers.” Also, Chief Advertising Officer for the Globe, Lisa DeSisto, says that the Globe is going to tap into those businesses that have been advertising in the Globe or on Boston.com for years and will also be reaching out to new advertisers to increase their network. Peter Krasilovsky, an analyst at the media research firm BIA/Kelsey, also says that “other newspapers have been successful at group-buying. The San Diego Union-Tribune outsells Groupon and LivingSocial in its market; however, the California paper got into the game much earlier than this one in Massachusetts.”

If you currently reside in the Boston area, have family or friends that live there, or happen to be traveling there for vacation this summer, check out Boston Deals. You may find the perfect gift for a loved one or a great new restaurant to visit. The Boston Globe’s client network may be more appealing to you than Groupon’s.
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Kathleen Jordan

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  1. For those of you who may have missed it, the Boston Phoenix launched a completly unique "deals" site in the Boston market about a month ago: http://deal.thephoenix.com/boston/
    Unlike groupon & boston.com, the Phoenix site oferrs DOZENS of local offers ALL THE TIME, not sbject to any minimum group buying level, and all for 50% off.