Published On: Tue, Oct 11th, 2011

Using Daily Deal APIs to Get in on a Hot Market

This guest post comes from Marc Mezzacca, founder of NextGen Shopping, a company dedicated to creating innovative shopping mashups. Marc’s latest venture is a social-media based coupon code website called CouponFollow which utilizes the Twitter API.

The daily deal space is hot, and has been for some time now. In the past year 23 million Americans have purchased a daily deal or group coupon according to a survey conducted for the American Institute of CPAs by Harris Interactive (source). Not to mention Freelance websites, such as Freelancer and Elance, have been flooded with thousands of “Groupon clone”, “daily deal site” and related job postings – a general sign that many more businesses are still trying to get in.

Do you want to get in on the action, avoid upfront costs, and minimize overhead? If so, daily deal APIs are the perfect option for you. In my last post I broke down E-Commerce APIs. Today I’ll be digging a little deeper and discussing the Group Buying and Daily Deals portion of these APIs. Specifically, I’ll be breaking down the daily deal space into three types of APIs, do some provider comparisons, and point out a few real-world example implementations.

Daily Deal Site APIs

Last year Groupon launched its API to the public. While Groupon holds a lions-share of the market, top competitors such as Tippr have also launched APIs. Publishers and developers can earn revenue through their affiliate programs. Other smaller daily deal sites also offer affiliate programs, and have either simple APIs or standardized feeds available.

Daily deal APIs can be used to add complimentary deal data to an existing website, iPhone or iPad App, Facebook App, etc. And perhaps you’ve already seen some integrated on Apps or websites that you use.

Daily Deal Aggregator APIs

Why stop with just one deal site when you can list hundreds instead? There are several daily deal aggregator APIs available that allow developers to do just this. With this type of API developers can push deal information to an existing user base or create an innovative mashup by combining data sources.

The Providers

Yipit is currently in 75 cities and growing at about 10 new cities per week. They offer a robust API, massive deal coverage, a fairly active developer forum, and a 100% commission structure. However, they aren’t looking for white-label partners whose main focus would be daily deals.

8Coupons is also a proven and quality option for developers. They are a bit lighter on both their branding restrictions and caching policy when compared to YipIt and overall seem fairly flexible. They have between 7,000 and 10,000 daily deals on average, with over 490,000 other types of coupons and deals also available from their API.

MyDealBag has a similar offering to 8Coupons although currently it seems a bit less coverage. However, they do offer completely brand-free (white label) integration (for additional cost).

Sqoot, a relatively new player, is another compelling offer. They offer a seamless, brand-free integration and the only fixed-fee model I’ve seen to date. Instead of running a daily deal aggregator website themselves, they are focused on their API. They do have a front-end deal website, but only as a demo for perspective partners. They are already building a nice showcase of real-world integration examples.

The Comparison

Partnership model and Licensing are two key factors that are important when choosing any API provider. For Daily Deal APIs specifically the amount of deals covered and whether geo-location is enabled on the API are also key elements. Below is a breakdown of the top 5 Daily Deal aggregator API providers. NOTE: The DealMap, recently acquired by Google, is no longer taking new signups for their API. They “plan to maintain the API for now” as they work through the transition to Google. For this reason I have removed them from the comparison.

  • Deal Coverage – Estimate of how many deal sites the company currently covers, and how many deals are active in the providers’ database.  Each provider may define a daily deal is differently, causing variation.
  • Partnership Model – Either revenue share or fixed-fee.  For revenue share, the standard amount of revenue offered to the publisher is listed, but most can be negotiated based on traffic and performance.
    • Affiliate Tracking – Who handles the affiliate commission tracking on referrals: You, Provider, or Either.
      • You – You must sign up and maintain all affiliate relationships.
      • Provider – Provider will handle all affiliate relationships and tracking.
      • Either – Provider handles affiliate relationships, or you can pass your own to override it.
  • Licensing – If branding is a requirement, rate limits for calling the API, and if caching results is allowed.
    • Yes – Branding is a requirement and API provider is not looking for “clone” sites.
    • Partial – Branding requirements may be a requirement, or upon click the user will see information about the provider.
    • No – A fully white-label, seamless integration is available, and users will be redirected to the deal site with no branding information shown by the provider.
  • Location Enabled – If you can send geographical location (eg. Lat and Long) to the API and get deals based on a specific location.

The Bottom-line

Development of a daily deal aggregation system from scratch is theoretically straightforward, but things like user acquisition, data scrubbing, and marketing aren’t. Yipit and others that were early to the daily deal scene definitely have a first mover advantage. If you plan to complete directly, you better have a unique competitive advantage to offer up, as well as time and resources.

Otherwise, using one of these APIs is a great way to skip boring stuff like data aggregation and cleansing, and instead focus on your core business model. You can funnel off existing traffic, add deal data as an additional feature to your mobile app, or create something entirely new in the form of a mashup by combining different data sources.

Daily Deal Platform APIs

Want to build your own daily deal site? Adility Cloud offers a platform API which allows developers to access merchant deals, and essentially build a custom daily deal site. Adility works with 10,000 merchants and publishers can access deals from all of these merchants.

This approach requires more infrastructure setup on your end. You will be handling credit card processing and managing customer relationships. It’s kind of an inverse affiliate relationship. Instead of receiving affiliate commissions, you are in charge of handling the payments. The benefit here is that it is a truly seamless experience. Everything will happen on your site, including purchase completion. The payment structure is as follows: Publisher: 70% / Adility: 15% / Agency/Partner: 15%

To help better depict the revenue stream, Adility CEO Thomas Cornelius breaks down an example scenario:

Usage Examples in the Wild

CityPockets, a digital wallet for daily deals, added a live daily deals section to their website by utilizing a daily deal aggregator API. They started with the MyDealBag API and have switched to 8Coupons API. Since there are several aggregator APIs available, you can choose the API provider that is best suited for your particular business model.

GuideMe, a social guide to local businesses, combines FourSquare’s API for location data with both YipIt and Sqoot’s API to notify users of deals at places they, or their friends have checked-in at. Interestingly they reported that they found YipIt covered mostly the major markets, while Sqoot was more comprehensive for covering more markets.

Adility also has a few sites in their showcase. According to Adility’s site, several large websites leverage AdilityCloud to offer up their own daily deals including CBS’s mySimon Daily Deal site andDealster.com.

Concluding Thoughts

There are currently 27 Daily Deal and Coupon related APIs listed on ProgrammableWeb, and none of them are exactly the same. Foursquare has a Merchant API which allows businesses to create special deals once they’ve registered their business as a Merchant. Lifesta is an aftermarket for daily deals, and currently has an API in beta which allows developers to access information on daily deal coupons for sale by the owner. ThinkNear uses a push notification system to send consumers coupon offers (while they are geographically located near a business) during slow traffic times. They currently offer an API geared specifically toward mobile which allows for searching, getting and claiming offers.

There is a lot of innovation in this space, but it’s quickly becoming saturated. Take a look, do some research, play around and determine which API can complement your business.

via ProgrammableWeb  Using Daily Deal APIs to Get in on a Hot Market.

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