But the social network’s advertising revenue grew 18.4% during the quarter.
Google is also testing an Offers tie-in with consumers’ credit cards.
Google Inc. is seeking to drive U.S. consumers to nearby businesses. The search giant today rolled out an extension of its Google Offers daily deal offering that presents consumers with nearby Offers when they look at Google Maps on their mobile devices.
Google doesn’t break out how many U.S. consumers use Google Maps on their mobile devices, but it says 200 million consumers use the tool worldwide, as Google Maps comes preloaded on iPhones, iPads and devices using the Android operating system.
“This is the next logical step for Google—to put offers in a relevant context,” says Eric Rosenblum, director of product management for Google Offers.
When a consumer opens Maps, he can tap Offers in the dropdown menu to see the relevant deals on the map showing his location. He will see the nearby businesses offering deals, each marked with a blue Google Offers “tag.” He can also view offers in a list and choose to get an in-app pop-up notification for nearby deals.
Unlike e-mail Offers, the mobile Offers can be redeemed immediately and may not be as high as the 50% or more off of other Offers deals. The discounts also operate like a traditional coupon in that consumers do not have to pay for a voucher in order to receive the discount. That’s different from rival Groupon’s mobile offering, Groupon Now.
“There’s less of a discount, but there’s also less of a commitment,” says Rosenblum. “It is a way to give a small nudge to get someone in the door.”
The mobile offering is entirely self-service: Merchants can create the deals through their Google Places account. There they can select the type of offer and decide how and when they want it to run. Merchants can limit each mobile Offer to specific days, times and redemption quantities. While there will be a cost associated with running Offers in time, Google is currently offering the service as a free trial.
Because of the lower commitment and the fact that millions of consumers are already using Google Maps on their mobile devices, Rosenblum is confident that Google will be able to thrive where daily deal leaders Groupon Inc. and LivingSocial have not. Groupon’s Now mobile offering has failed to grow at the rate of other Groupon products, according to data compiled by daily-deal aggregator Yipit, and LivingSocial shuttered its offering after it failed to find a niche.
“Everyone thinks mobile is the obvious place for daily deals to live, but largely, the early experiments haven’t worked,” says Rosenblum. “We think this is a better experience because the largest factor is you’re already looking at a map and seeing what’s around you.”
The move is the latest way Google is seeking to leverage its existing products to push its daily deals. The search giant has taken several steps to make Offers more attractive to consumers, including expanding to more cities and presenting more deals .
Google also is running a pilot in the Bay Area for Google Offers with Rewards, a program that requires consumers to register a credit card with Google Wallet to receive automatic discounts, while also enabling it to track consumer behavior from the online promotion to offline redemption. Google e-mails buyers of Offers, encouraging each recipient to register a payment card in order to receive a reward after the shopper visits a set number of times. Merchants set the conditions of the reward and its value.
“It’s opt-in, so it probably isn’t for everyone,” says Rosenblum. “But it’s an option that could be appealing to many.”
April Anderson, industry director, retail, at Google, will speak at the Internet Retailer Conference & Exhibition 2012 in June, in a session entitled, “Paid search strategies for the smaller merchant.”