BIA/Kelsey Sees 'Deals' Spending On The Rise

Survey Points To Increasing "Deals"

BIA/KELSEY, adviser to companies in the local media industry, TODAY (9/13) released an update of its U.S. deals forecast, first issued in MARCH. The firm expects U.S. consumer spending on deals (including daily deals, instant deals and flash sales) will grow from $873 million in 2010 to $4.2 billion in 2015, representing a 36.7% compound annual growth rate (CAGR). In MARCH the firm had pegged 2015 deals spending at $3.9 billion, with a 35.1% CAGR.

Compared with the earlier forecast, this update indicates only a slight increase overall by 2015. However, revenues for 2011 have been revised upward significantly to $2 billion from the $1.2 billion originally estimated in MARCH.

"Even as more consumers sign up for deals programs and awareness grows and new markets are entered, we see a ceiling on how many deals consumers will buy, and their overall interest level in deals," said VP/Chief Economist MARK FRATRIK. "With that said, a strong foundation has already been created in the promotional ecosystem of this young industry. We believe daily deals reinforce other advertising and that related services, like instant deals and flash sales, will significantly boost income for key players."

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