Deals on Facebook – A Competitor to GroupOn

A few months ago, Facebook launched its first iteration of deals that could be unlocked by a user checking in to Facebook Places. On Tuesday, they began expanded their deals offering to provide Facebook fans with location-based deals, very similar to GroupOn or Living Social.

If you are like me, you are rushing to figure out how you and your brand can get involved with these new Facebook Deals. The following are my 3 main questions and answers to this new service offering.

Is it Open to Everyone?

Currently there is no self-serve method of creating Deals.  Similar to how GroupOn and LivingSocial got started, Facebook is launching in the following test cities first: Atlanta, Austin, Dallas, San Diego and San Francisco.

This being said, businesses can still submit a form if they are interested.  By asking businesses to enter their Facebook page URL, this will also allow Facebook to screen which businesses get contacted first.

What does it cost?

According to, “Facebook says its initial tests of Deals will be free for businesses to offer, but we expect it to begin charging businesses a percentage of user spend in exchange for the distribution.”

One option is for Facebook to charge the same 30% it is charging developers for Facebook Credits, or could follow the 50% model of GroupOn.  We’ll have to wait and see.

Why is it a big “Deal”?

The biggest reason why this is a such a big deal is quite simply the news feed inclusions.  By simply subscribing to deals (even though they aren’t in my area yet), a news feed inclusion like the one below is generated.

Although I’ve yet to see a newsfeed inclusion for specific deals, if Facebook gives preference to deal updates – this could mean greatly increasing the potential for brands to be discovered and for the deals to be redeemed.  It also gives Facebook an immediate advantage over its competitors.

What are your first impressions of these new deals?  Please share in the comments below.

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