A Busy Month for Groupon (Highlighted by the Announcement of Groupon Now aka "2.0") and Opportunities in the B2B Market

Groupon Now will give mobile app users two choices: I'm Hungry or I'm Bored.

Since our last post Groupon has *deep breath*: been readying an IPO somewhere between $10 and $25 billion, dealing with the President and COO Rob Solomon abruptly stepping down, reportedly had revenues for February plummet [check that] increase, watched visits to Living Social approach their numbers for website visits (post Groupon Super Bowl fiasco), and announced a radically new business model called Groupon Now [aka "Groupon 2.0"].

Drawing an interesting boundary/context in which to analyze for a three month research paper is difficult enough without the company, entire industry even, keeps acting like a moving target! At least we can never complain about picking a boring topic.

We also had a great chat with the founder of Boss Rocket, a B2B group buying startup based in D.C. (and BU MBA alum). While it was interesting to talk about the differences faced in the B2B versus B2C space from a marketing perspective, comparing notes on Groupon and group buying in general was extremely helpful. Speaking with someone who is in the field creating these it's easy to see why group buying has proliferated - contracts can be completed fairly quickly when framing these deals as a win-win for both parties.

Assuming Boss Rocket targets small/medium businesses that have authority to purchase deals on impulse, do you think a "B2B Groupon" can be successful?

Fierce Competition Means Groupon Must Innovate to Stay Ahead

This is just getting ridiculous.

Seemingly every publisher (NYT) or distributor (Bing, Google, facebook) are getting into the group buying market (dare we say craze?). Our decision to move the traditional five year outlook for our paper down to two ("How should Groupon innovate to effectively compete in the group buying ecosystem in 2013?") seems like an eternity from now.

The greatest threat in the short term is buyer fatigue from all these deals. Hardcore users can buy only so many luxury products like massages and dining out coupons. For the masses, moving away from the "one deal per day" paradigm could decrease the excitement factor of the daily email. Interestingly, Groupon's next ad campaign will focus on adding fun and excitement to your week.

With the competition increasing by the day, we came up with the following abstract for our project: Within the $130 billion dollar local advertising market, Groupon has helped define the group buying model as a new means or promotional ad spending. The quick emergence of dozens of clones and potential for entry to this market by large traditional and digital media advertising organizations means that Groupon must extend beyond their current advantages in sales force size and brand image and broaden the scope of their platform and capabilities of their service for businesses and/or customers.

Stay tuned for our ideas for what features we believe Groupon need to add to their current email-based system. What do you think?

Untraditional Advertising for an Advertising Genius

David and I met today to discuss our research paper outline. It was a very productive meeting in which we laid down the skeleton of our research and analysis.

One important fact we discussed today is the lack of advertising, both online and offline, Groupon engages in compared to its competitors. This goes back to our previous posts about the total failure of their Superbowl advertising campaign. Compared to one of its rival competitors - livingsocial.com, Groupon is far behind the game.

I took a deeper look into this and discovered that Groupon relies heavily on their own website as an advertising vehicle. Here are some sites that the company manages as a means of social advertising:

Groupon Facebook
Groupon Blog
Living Off Groupon Challenge

Groupon Partner, or Groupon Enemy?

This week we had a guest lecture from Vidar Hepsø of Statoil about the problems and opportunities of environmental monitoring. Some of his thoughts surrounding strategic partnerships across different layers of Statoil's stack model can be related to the Groupon, where various "partners" (and emerging competitors) add value to Groupon's business model.

This got me thinking about the disruption in the traditional advertising value chain, and how Groupon has become a player in the "implementation" of ads. Remembering a post I made last semester on "The Future of Advertising", where is the most value in this market?



The next step for this project is to define the profitability of the local advertising industry, the profitability of each layer of the stack, and the share of the profits for each firm within that layer.

Jumpstart the Tibet Fund: Groupon's Response to Its Unfavorable Super Bowl Ad

As a follow-up to David's post below regarding the public's response to Groupon's unfavorable Super Bowl ad, the company partnered with The Tibet Fund to setup a fund for the charity's Youth Employment Program. Subscribers can donate $15 to this fund via Groupon, and Groupon will match 100% of all donations. I thought this group-coupon was a great way for Groupon to publicly admit that their ad was culturally insensitive and out of line. As a result, they want to give back to the country and its people. There was definitely a need for Groupon to immediately respond to the backlash of its Super Bowl ad. What better way than engaging its subscribers to contribute to The Tibet Fund via the site. However, is this enough for the company to recover from the negative press it received following the Super Bowl?


http://www.groupon.com/deals/the-tibet-fund/

Problem Statement v1.0

All IS831 participants put together one or two slides about their topic and an initial stack analysis to think about the industry our companies compete in.

Groupon Background and First Stack Attempt

View more presentations from dweigner.

So far, we are focusing on the problem of increased competition for Groupon, not just by clones and new entrants Google and facebook, but the entire industry defined as "local advertising".

Next steps: refining the problem statement by thinking what research and data needs to be collected in the next two months, and what is the market size and importance of the various layers in our stack. We have more questions than answers right now, but that's to be expected!

Not So Super Ads for Groupon

According to Brand Bowl 2011, Groupon Super Bowl ads earned the worst sentiment score of any brand (yes, even GoDaddy). The campaign makes slightly more sense when looking at their 'save the money' site (complete with 50% off donation buttons), but for such a hot company, and one that prides itself on its (usually on point) sense of humor and corporate culture, it's a disappointment to say the least. On a positive note, Groupon were near the top in number of tweets, so at least the brand has a "conversation" going, right?

CNN Money: Groupon spends big on controversial (tasteless!?) Super Bowl spots

Judge for yourself:


**UPDATE: The video was taken down by Groupon due to the negative press