Even though I delete 99% of all of the offers I receive form Groupon, Living Social and Moolala, as a consumer I find that the ocassional opportunity to save a bunch of money very appealing and, in this economy, necessary. But, it comes as no surprise that Groupon's (GRPN) advertisers are dropping like flies and their stock has dipped below it's initial offering.
[NOTE: Both Groupon and Living Social have Android apps available in the Android Market. Click on the links above to set up your free account, then download the apps.]
Over the past year I have had a few conversations with advertisers (mostly restaurants) who are using these daily deals programs to get the word out about their food, products or services and every one of them bitched that it was costing them too much money to get customers to come in once for the amazing discount and probably never come back again.
With restaurants, the whole purpose, from an advertising standpoint, is to get customers to try their fare, and if they love it they'll come back. Reality check: they're not coming back because they're down the street at the competitor's place eating their cheap Groupon food deal.
Groupon's stock has now dipped below its initial IPO opening price. And studies show that advertisers aren't re-upping with Groupon because they feel that they are paying a premium to get the customer to come in, but they never come back. It just isn't a good advertising/marketing move.
It seems that if these daily deal programs want to survive, they're going to have to make it more appealing to advertisiers (ie: cheaper), while still offering great products and services to the consumer.
In the meantime, grab those deals while you can.
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