BIA/Kelsey ILM West: 12

BIA Kelsey: Deals Still Aim for $5.5B By 2016

Despite recent woes, the deals industry is far from dead, according to BIA/Kelsey's Peter Krasilovsky, speaking at ILM West 2012. Krasilovsky says deals are entering their next act, combining deals with loyalty and rewards programs, and expects the industry to hit $5.5 billion by 2016.

LOS ANGELES -- Deals are entering their "Act II" phase with still-strong prospects despite the industry's highly visible woes, BIA/Kelsey said at its  ILM West conference on Wednesday.

This next act would be a combination of deals and loyalty and reward programs, said Peter Krasilovsky, VP and program director at BIA/Kelsey. "We see deals as part of a broader platform," he said.

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"We can still see an optimistic picture from deals and more revenue from deals," he said, holding by a projection that the market will hit $5.5 billion by 2016.

This forward motion will be propelled by "big data," Krasilovsky said, and will be paired with geo-based mobile offers and card-linked offers.

Historically, he said deals were the first pure pay-for-performance medium, breaking new ground that can now be better trod alongside loyalty programs, which he said boost spending and are gaining traction.

They also bring in five core revenue streams: revenue share, monthly or annual fees, commissions, bounties and transaction processing.

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But Matt Coen, co-founder and president of deals provider Second Street and one of a cadre of deals, loyalty and coupon providers offering their own prognoses on the industry's future, had a caveat.

"There will be fewer players in the space and many pretenders will be gone," he said. "I think it's going to diversify, and those that diversify will be strongest."

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