Sports Sunday: Lack of competition means Groupon wins, ads or no ads

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At this point, I think it’s official. The conversation about the Groupon Super Bowl ads has actually passed the amount of conversation about the game itself. One week later, Packers and Steelers fans are still talking about the game. But everyone else is talking about Groupon. You want to know why? Because in the social deals Super Bowl, Groupon is the only team qualified to take the field.

I’ve thought about this a lot. My first reaction was negative. The ads were stupid, the concept was stupid and Groupon missing an attempt to capitalize on creating community around causes was stupid. If I was an investor, I said I’d be pissed. But as a subscriber, did I cancel my e-mail subscription? Uh, no. I still need to save money.

Most perception I read and heard beyond my two cents was negative as well. My #pr20chat co-moderator Heather Whaling agreed Groupon’s ads were a miss. Gini Dietrich proclaimed the Groupon bubble is about to burst. Shelly Kramer called the ads a fiasco. And Liz Strauss was one of many who offered advice on how Groupon could fix the PR problems they caused (her advice was right on point, might I add).

Nate Riggs was one of the only peers I saw who said Groupon’s ads just might win. I commented on Nate’s post that I wasn’t so sure. But Nate did have a good point about who Groupon might have been trying to reach (check out point No. 4  in his post). Then a couple of days later, Nate shared some data that made me start to do a 180 on just how negative these ads might be.

Nate shared this from Astute Solutions. I encourage you to deep dive into the data, but the overall takeaway is that Groupon actually had more raving brand fans than many of us — including me — thought. And those fans have been coming to the brand’s defense at almost a 2-to-1 clip. Made me think I needed to get out of my bubble on the Groupon ads thing. Maybe I was too close to the ads, being in an industry and social circle that analyzes and over-analyzes these types of stories. In my mind, I started to declare the Groupon ads a win, at least a short-term win. Heck, the brand has seen about 50,000 new subscribers since last Sunday.

Then, right as I was starting to think Groupon might have been smarter than I was giving them credit for, they pulled the Super Bowl commercial campaign. “We hate that we offended people and we’re very sorry we did — it’s the last thing we wanted.” said Groupon CEO Andrew Mason.

Well, what about the fans that came to Groupon’s defense and stood behind the brand’s controversial ad campaign. Doesn’t pulling the ads indirectly brush their support aside and offend the ones who were most loyal in the process? So let’s check the list here — Groupon has offended its raving brand fans, its non fans and you could argue the company pretty much offended all of its customers through the content of its commercials. PR and P&L suicide, right?

Well, maybe down the road if Groupon doesn’t learn from this experience. But right now, I’ve decided it doesn’t matter how badly Groupon screws up because they’re the only game in town when it comes to social deal communities. Sure there are smaller ventures like LivingSocial. But that’s the minor leagues and Groupon’s hitting Albert Pujols third. And there’s Facebook Deals. Maybe some day, but right now it’s just an expansion team….or even the Kansas City Royals.

The bottom line is people think with their wallets. The economy hasn’t recovered yet. And my wife still likes to go out to dinner at nice places on the weekend for date nights — I’m guessing the same is true for most guys. Now I’m not the biggest fan of Groupon because of their model and how it can negatively affect small businesses. But we do use Groupons and we do have a family budget. Maybe I’m shallow for saying this, but if a Groupon can save us $15 on a night out, I’m usually going to be in. And I guarantee you I’m not the only one.

Heather, Gini, Shelly and Liz are right. At some point, this irresponsible behavior could catch up with Groupon and make Mason and team wish they’d taken Google’s initial merger offer. But Nate is right too — people think with their pocketbooks, especially the people Groupon may have been targeting in these ads. The people, as Nate described, “at Super Bowl parties, bars and at home with family and friends.” The next time those people have a party or go to a bar, they might want to save some money on chips and beer. Don’t you think?

I have read a number of posts on the Groupon ads and I’ve seen three people post that they canceled their Groupon subscription. Hundreds of comments and just three people. Everyone else is keeping the Groupon jersey in their closest. Because right now they’re the only team playing in the “Big Gams” when it comes to social deals.

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3 Responses to “Sports Sunday: Lack of competition means Groupon wins, ads or no ads”

  1. ginidietrich Says:

    I don’t know. I think they pulled the ads because they were offensive to the WSJ, CNN, the Tribune, Crain’s and every other major media outlet. Sure they may have raving fans defending them, but those people don’t make a reputation.

    Sure they have 50,000 new subscribers. But those people signed up because they were curious. In the ad world, we’d consider that a win. But will they buy? That’s what will be interesting to see. Will. They. Buy.

    LivingSocial isn’t a tiny competitor; they’re nipping at their heels really quickly. The problem with Groupon is they had their time - they were offered $6B to sale to Google. But they got greedy (and their VC partners are super arrogant) and thought they could get more from the open market.

    To put an even bigger damper on things, did you see the FTD fiasco with Groupon this weekend? FTD was offering a Groupon deal through FTD for Valentine’s Day, but it turns out the buyers were sent to a different site that cost more than the original site. And shipping (as one would imagine) was hiked way up.

    So you have: 1) walking away from $6B; 2) the Super Bowl ads; 3) the explanation instead of an apology; 4) the real apology and pulling the ads; and 5) the FTD fiasco. I don’t think they recover.


    • JGoldsborough Says:

      @ginidietrich Thanks for stopping by, Gini. I was totally with you a week ago. I am not a fan of Groupon’s model and would not recommend it to most of our clients, especially those that are small businesses. But I have now come to the conclusion that people want to save money. Groupon helps them do that. Of course the new subscribers will buy. They like discounts just like the rest of us, don’t they?

      I see your point when you mention the WSJ, CNN, Tribune, etc. But raving fans absolutely do affect (I no longer use inmpact because of your grammar post :) ) reputation and purchase. There is a lot of research — Nielsen is the one I see used most often — about how consumers trust their peers more than any other source and look to peer recommendations when making purchase decisions.

      One of the great points I saw in all the anti-Groupon posts was Liz Strauss’ sentiment that Groupon had built relationships on price. That could hurt them big-time in the long run. And I hope LivingSocial is nipping at their heels. In fact, I also agree Groupon was out of their mind not to take the Google offer. We talked about this when that happened.

      But I can’t think of one friend or peer I know who has bought a LivingSocial deal. I know several who have bought Groupons. And when I read my Twitter or Facebook stream and see people sharing discount deals, Groupon’s name pops up way more than any other brand, although I have seen LivingSocial a few more times lately.



  1. Tweets that mention Sports Sunday: Lack of competition means Groupon wins, ads or no ads – Justin Case You Were Wondering -- - February 14, 2011

    [...] This post was mentioned on Twitter by JGoldsborough, Laney. Laney said: RT @JGoldsborough: Will @Groupon SB ads soap opera really hurt the brand? Or do ppl think w/ their wallets? #pr20ch … [...]

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