In an era where print publications are becoming extinct, of course there's going to be a growing market for ads that are delivered to a wide audience and presented in a "legit" manner (eg not spam). This is a new thing only insofar as it is now happening in electronic media rather than print.
(Groupon employee speaking)
Not true. Before you even see the first deal, there's a popover asking you to personalize your deals. You can put gender, birthday, interests, education, relationship status, etc. G knows the zip code of every person that buys a Groupon, open rates on emails sent, deals viewed, purchase history, etc.
If however you're doing multiple deals per city, per day based on more than one demographic metric then it's targeted. ie. I'm a local brick-and-mortar business (I'm not) who wants to advertise to men between the ages of 25-35 in my city and only those. Then you've got a targeted play. Otherwise it isn't more targeted than the local newspaper other than your particular demographics are likely younger. It's still a shotgun approach to your entire user base in each location = not targeted.
Is that what Groupon is doing?
EDIT: Case in point. The owner of the beauty salon that's the current deal of the day in my city is a friend of mine. I am not her target market, yet I'm seeing the deal. That's a missed opportunity for her and you.
The Deal of the Day and "Nearby Deals" are customized based on all those things I mentioned. Merchants don't get to specify because we make it simple for them and have access to a whole lot more data and resources to determine who should see their deal. It is however limited by the merchant pipeline. In Chicago, the oldest and most mature Groupon market, I always see restaurants, entertainment, or sports things, never spas or salons.
Which city are you in? If it's smaller or newer to Groupon there's likely much less variety.
My current understanding is that it's just one deal per day, per city. If you're saying it's one deal per day, per city, per person then that's quite different and more interesting.
I'm in Winnipeg, Manitoba, Canada. Smaller (~700,000 people) AND newer (I think Groupon showed up a couple months ago?)
Winnipeg explains why you're only seeing one.
I think the reason this works is threefold;
1. Expanded (geographically targetted) reach for participating companies.
2. Increased chance of full sales conversion (via money up front) - participating companies are better off even if full conversion doesn't take place.
3. Financial incentives turn Groupon's users into a sales team.
Name me the best company in the world to solve that problem with Groupon.
This may not be coincidence.