Chicago-based Groupon was launched in 2008, and offers an eCommerce marketplace for people looking to purchase vouchers and coupons for a diverse range of local activities, goods, and services. Whether you fancy a cruise vacation, a romantic dinner or a manicure, you can simply use the platform to discover the best deals, discounts, and offers available around you. With 48.2 million active customers, the company currently operates in 15 countries and generated a revenue of US$2.84 billion in 2017. In 2011, Groupon created an online app (195 million downloads) that leverages a user’s geolocation to find the best deals in entertainment, travel, home improvement, beauty, food, and other personalized activities. By March 2018, 72 percent of all their sales were taking place through a mobile device. 2018: Tiffany Haddish Superbowl campaign In an interview with Jimmy Kimmel (2018), Tiffany Haddish shared an anecdote about using Groupon to book a swamp tour for herself, and her co-star Jada Pinkett Smith. After the segment went viral, the company signed the actress for a Super Bowl commercial depicting Haddish as a savvy shopper who supports local businesses and saves money by using Groupon. Within 8 days, the ad amassed 7 million views on Youtube, helping Groupon build a stronger brand presence, and increasing sales momentum. At the same time, the company worked with SocialCode, the marketing agency that spearheaded successful social media campaigns for brands like Toscano, VISA, and Michael Kors, to run video ads across Facebook and Instagram. Groupon also used Google to run similar paid search campaigns across the web built around long-tail keywords. With Haddish, Groupon tried to undo the PR disaster caused by their 2011 Super Bowl commercial starring A-list celebrities like Cuba Gooding Jr., Elizabeth Hurley, and Timothy Hutton. While each ad began with the premise of supporting a noteworthy cause (wildlife conservation, saving the rainforests, the Tibetian crisis), the pitch quickly and abruptly moves away from their initial message to plug Groupon. For example, Hutton starts off his commercial by announcing, “The people of Tibet are in trouble. Their very culture is in jeopardy,” before saying, “…but they still whip up an amazing fish curry and since 200 of us bought at Groupon.com, we’re each getting $30 worth of Tibetan food for just $15 at Himalayan Restaurant in Chicago.” The commercial (that Groupon reportedly invested $3 million in) sparked an immediate controversy post-airing, with a vast majority of people agreeing that it “missed the mark” and was ‘distasteful’. Eventually, the company axed the entire campaign and shifted their advertising strategy to focus only on display and search ads, instead of TV. That’s before the Haddish opportunity fell into their lap. 2019: Brand makeover + Reformed approach to advertising According to Craig Rowley, Groupon’s new CMO, the company is preparing for a big change in 2019, where they’re “moving away from the vouchers of the past” and “building a true global marketplace with new partners and a broader selection of local services and experiences”. By partnering with nationally renowned brands like Costco, AMC theatres, Sam’s Club, TripAdvisor, and Pandora, alongside the local mom-and-pop stores, Groupon is all set to mature into a platform where users can buy tickets, order food, discover branded experiences and earn rewards on repeat purchases. Rowley further clarifies that the company will be revising their media spend, and will be investing more on YouTube and cinema advertising this year. He also believes that they haven’t been as aggressive with social media marketing as they should be—something that they plan on fixing in the near future. “A lot of the marketing and the idea behind how the brand is going to be served up, it’s going to shift to incorporate more of those things and really play out the idea that we are a true local marketplace,” he said. Let’s take an in-depth look into what Groupon’s ad spend, top publishers, creatives, and landing pages actually look(s) like. Ad Spend and Ad Networks In the last 6 months, Groupon has spent a whopping $65.8M on online advertising, with the majority going towards Direct Buy ($63.4M), where the company negotiates with a publisher (for example, ESPN or CNN) to purchase advertising space. Apart from the pricing, an advertiser can decide the ad placement, copy, and even the exact duration the ad will run for. As opposed to programmatic ad-buying where you have the option of contextual targeting, direct ad-buying relies entirely on getting traction from the publisher’s audience. This explains why successful direct ad-buying is all about choosing relevant publishers that have the kind of audience you’re trying to attract. For example, Mailchimp, the marketing automation platform that also invests predominantly in direct ad-buying, advertises mostly with technology-forward publishers—and their ads appear on pages related to the latest smart home devices, upcoming innovations, and workplace productivity hacks. Groupon also has a hefty budget dedicated to YouTube ($2M), and Google Search Partners ($249.3K), with very little money going towards Google Native ($1.4K), Taboola ($611) and Outbrain. This explains why 97 percent of their ads are video, and almost none are native. On the contrary, while RetailMeNot, Priceline, and Ebates, direct competitors to Groupon, also invest heavily in direct ad-buying ($10.3M, $9.2M, and $3.9M respectively), video ads are not an integral part of their advertising strategy. Another thing that sets Groupon apart is that the company consistently advertises on both mobile and desktop, whereas, the others have been partial to mobile. Publishers Groupon’s top three publishers have remained the same for the past year —Youtube ($64M), Yahoo ($150K), and Target ($87.9K). In the last 6 months, they’ve moved away from Imgur and Best Buy and currently advertise with Coolmath Games ($85.3K) and Addicting Games ($76.3) instead.On Youtube, their ads appear on videos that are either trending or belong to channels that have a large subscriber base. For example, they spent $3M advertising on this video with 714,699,284 views on a channel that reviews kids’ toys. While the video and the channel are not directly relevant to Groupon as a brand, the channel’s 31M subscribers guarantee that the video will be watched by a substantial number of people—including the ones who might be interested in what Groupon has to offer. Similarly, another video that Groupon spent 1.8M on has been viewed 107,237,427 times and is posted by a channel with 633K subscribers. On the other hand, most of their ads on Yahoo are featured on the eCommerce section of the website—and specifically on pages selling mp3 players which probably get substantial traction. Overall, it’s safe to conclude that Groupon prefers advertising with publishers that are raking in a significant number of visitors every month, so their campaigns are seen by as many people as possible. They’re not putting much effort towards reaching the right people by using advanced targeting parameters like a lot of brands—and that seems to be working out for them at the moment. Creatives As we discussed earlier, 97 percent of Groupon’s ads are video, whereas, the remaining 3 percent are a combination of text, image, text/image or HTML5 type ads. In the last 6 months, the company has run :06, :15, and :30 second-long video ads featuring Haddish, where their primary focus has been remarketing to customers who’ve visited their platform but not made a purchase, and reaching out to past customers who have not returned to the platform in a long time. They’ve also used Facebook’s Lookalike Audiences tool to find potential customers who share the same characteristics as their existing customer base.
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