There have been moves recently by companies in the deals segment to evolve the model beyond the original “daily deals” concept, which was push-email based or involved simple deal syndication. For example, a couple of weeks ago, NimbleCommerce launched a new deal-based ad network. And yesterday Local Offer Network (LON) introduced deal scoring and personalization to drive greater relevance and performance on its network.
While consumers continue to love the idea of deals a persistent complaint has been the lack of deal relevance. Local Offer Network has sought to address that problem by scoring deals (conversion probability) and by introducing personalization. According to LON CEO Dan Hess this enables a better and more relevant deal to be served on any given publisher site in its network for any given consumer.
Hess told me that each deal is pre-scored by a predictive algorithm that takes historical deal performance and numerous other factors into account. The company calls this its “Adaptive Response Model” or ARM. It’s like a “quality score for deals.”
In addition to the ARM score LON is bringing multiple data sources to bear on the decision of which deal to serve. This is the personalization layer. Hess explained that when the consumer lands on the publisher’s page where an offer is to be served, LON can call up whatever available data exists about that user — from cookies (including click and purchase history), publisher registration data and third party data vendors to deliver a more specific offer in real time.
Hess said that in tests on its own DealRadar site ARM scoring provided a performance lift (clicks/purchases) of 30%. But when ARM and personalization were used together there was a more than 130% improvement in performance.
LON’s database now has a wide range of content, including daily deals, coupons, event tickets, travel and products. Offers are both national and local. LON’s business model is CPA.
Since 2010 there has been an emerging notion of an “AdSense for deals.” Several companies have used this language. Deal volume or liquidity is the main barrier to the realization of this vision. However NimbleCommerce’s deal network and now LON’s deal scoring and personalization represent big steps in that direction.