2011 Brand Bowl Showdown: Groupon vs. LivingSocial

By Carrie Griffith

The battle between the online deal websites Groupon and LivingSocial was one of the most anticipated Super Bowl commercial match-ups this year. Both start-ups used controversial humor in pre-game and Super Bowl spots to get the word out about their daily deal sites. In the aftermath of eyebrow raises and social controversy, did the humor pay off?

Groupon
From rainforest deforestation to mountainous Tibet, Groupon’s three 30-second spots seemed to have questionable (not to mention controversial) starts. Although the introductions seemed inappropriate, they stayed true to Groupon’s brand personality, known for its quirky lead-ins to deal descriptions. Groupon’s spots also gave non-users a good idea of how the daily deal service works. In the pre-game spot, Cuba Gooding Jr. says: “…since 100 of us bought on Groupon.com, we’re each getting an $86 whale-watching cruise for just $49.”

Groupon definitely flexed its new funding muscles—$377 million to be exact— and spent $3 million to produce and air its three Super Bowl spots. For its first offline advertising effort, the start-up partnered with big-name agency Crispin Porter & Bogusky. In addition to Gooding, the spots featured stars such as Elizabeth Hurley and Timothy Hutton.








Living Social
From golf to go-karts to facials, LivingSocial’s pre-game spot depicted the wide range of deals that consumers can find on the website. In the campaign created by The Martin Agency, one man describes how his life has changed through his addiction to the online daily deals website. The man starts out macho and bearded, but through LivingSocial’s daily deals, ends up dressed as a woman. In the wake of social media backlash, it is obvious that LivingSocial made a big mistake in its choice of humor. Stuart Elliot, writer for The New York Time’s Media Decoder, said it best: “Yes, in 2011, advertisers still believe that transsexuals or cross-dressing is something to laugh at.”



The last time these two start-ups faced off, LivingSocial walked away victorious with the title of “Biggest Daily Deal” by selling over 13 million in the $10 Amazon.com flash deal. In fact, LivingSocial used some of the earning from this deal to fund their Super Bowl pre-game debut.

Who do you think won the offline match-up? Let us know in the comments!

LivingSocial’s $10 Amazon deal: Who’s the real winner?

By Lauren Elizabeth Chapman

On Wednesday morning, LivingSocial released its biggest daily deal to date: a $20 Amazon gift card at a cost of only $10 to LivingSocial members. With almost 1.4 million purchases made in 24 hours across 170 markets in the U.S., the deal topped the chart for most buzz, in addition to setting the record for most purchased coupon on a daily deal site. What’s the thinking behind such a bold marketing play by both LivingSocial and Amazon?

From the start, LivingSocial has struggled to gain as much popularity and to distinguish itself from its main rival Groupon, as well as the other online group deal sites that have sprung up in the past year. Most likely, the Amazon deal was meant to compete with Groupon’s biggest deal to date, the $50 Gap deal offered for $25 in August 2010 that had almost a half million purchases.
It may have come as a surprise to many, but the partnership between LivingSocial and Amazon on this deal is not shocking. In December 2010, Amazon invested $175 million in LivingSocial, which is expected to report over $500 million in revenues this year. It makes sense that out of all online retailers, Amazon would be LivingSocial’s go-to option, as Amazon has a vested interest in LivingSocial’s success.

The more important question is which company will be taking a bigger financial hit from the discount? The deal suggests that LivingSocial purchased the gift cards directly from Amazon, rather than Amazon selling the discount through the LivingSocial site (which is how deals are typically handled). So, is LivingSocial eating the discount as a marketing expense in hopes that it will regain the sales over time from new member subscriptions? Or was Amazon willing to sell the gift cards at a discount knowing that the expense would be recouped through LivingSocial purchases on its site, which would most likely be more than $20?

With this deal, I think LivingSocial was extremely successful in its attempt to get its name more widely known and to compete with Groupon on a higher level. Not only did LivingSocial triple Groupon’s previous one-day purchase record, it also created tremendous online buzz. Members jumped on Facebook and Twitter after making their purchases to post the deal in hopes that three friends would buy–making their deal free. Now that it’s added thousands of subscribers, LivingSocial could do even more to distinguish itself by using the idea of me + 3 = free to entice purchases. Though after Wednesday’s frenzy, LivingSocial is definitely one step closer to catching up or even taking the lead in the online daily deal space.

Tell us: Did you purchase the Amazon deal Wednesday? Are daily deal sites good for consumers as well as the companies that promote their deals on the sites? And how will Google change the game once it launches Google Offers?

Lauren Elizabeth Chapman is a student in the Masters in Integrated Marketing Communications program at Northwestern University’s Medill School and can be reached at laurenchapman2011@u.northwestern.edu.

Marcom this week: From A to zinc

From multi-billion-dollar takeover bids to warm-and-fuzzy car commercials, here’s a look at what made headlines this week in the integrated marketing communications industry.

Celebrating the Digital Decade

As the Digital Decade comes to a close, The One Club announced this week its favorite One Show Interactive winners from the past 10 years. From Burger King’s Subservient Chicken to Dove’s Evolution campaign, these works showcase how the real and interactive worlds were seamlessly brought together. The decade of digital may represent the successful launch of the first branded viral video and the birth of online social engagement, but what will its legacy be 10 years from now? And, what does the next decade have in store for us?

View the top 10 digital campaigns.

Groupon, Meet Google

Google is expected to make a staggering $5.3 billion bid for Groupon in the near future, a move that at first seems intuitive, as Google hasn’t had much success making a name for itself in online social technology. (Remember Google Buzz? We didn’t think so.) This acquisition could also serve as a remedy for its local advertising problem, an issue it attempted to solve by offering to acquire Yelp for $550 million in late 2009.

However, some industry experts are calling Google’s near-record-setting offer an act of desperation. Next in line to acquire Groupon would be Google’s arch nemesis, Facebook. The two sites have established a symbiotic relationship, and Facebook’s acquisition of Groupon would only strengthen its growing online advertising prowess. It seems likely that Google’s bid is merely to ensure Facebook can’t get its hands on Groupon. This especially seems probable when you consider that Groupon’s popularity peaked around the end of summer and has since dropped off substantially.

In related news, Groupon wasn’t the only discount email company making headlines this week. Its rival LivingSocial is reportedly in talks with Amazon to receive an investment of up to $150 million.

GM Falls Down

Vitamin IMC’s campaign pick of the week is General Motors’ heartfelt, but not too heavy-handed “Thank You (We All Fall Down)” commercial that aired over Thanksgiving weekend. The 60-second spot created by Goodby, Silverstein & Partners is a tribute to iconic American entities – GM, included – that have fallen hard, only to rise up and stand tall once again. A reminder that, perhaps, those things worth fixing are never broken beyond repair.

Marcom This Week: From A to Zinc is compiled by the Vitamin IMC editorial team. They can be reached at vitaminimc@gmail.com.

Facebook introduces Groupon-esque application– but will consumers hit the ‘like’ button?

By Ashley Graves

When I moved to the Chicago area a little less than a year ago, one of my most useful finds was the website Groupon.com.

In case you’re unfamiliar, Groupon is a group discount website. It provides coupons on activities, restaurants and services—as long as enough people purchase the deal. Groupon enabled me to try new things in an unfamiliar city, with a cool discounted price.

Over the past year, couponing websites like Groupon have exploded. And for good reason — consumers still want to have fun experiences in the cities they live in despite a less-than-booming economy.

Last week, a new application for Facebook called Group Deals was introduced. Group Deals lets companies provide fans with a deal-a-day coupon for their products or services on their Facebook fan pages.

This new application (the first of what I bet will be many) has excellent potential for brands to provide concrete value for their Facebook fans and reinforce consumers’ liking or loyalty to a product or service.

As an added bonus, because friends frequently view a Facebook user’s activity, the ability for these deals to spread would greatly increase.

Word-of-mouth, the much sought after and hard to create integrated marketing tool, has huge potential here. Facebook’s public news feed will display purchase decisions made by a user to their close friends and family, people who care about their opinions and influence their decisions.

The only potential drawback is for items that someone might not want their Facebook friends to see they have purchased. Do you really want your mom to see that you’ve bought five bar coupons in a week? Or for that cute guy you met last weekend to know you’re planning to attend a six-week diet bootcamp?

By connecting the purchase of a deal directly to a Facebook application, brands will be better able to track the value of their Facebook fan page (an issue still hotly up for debate). The potential to calculate a rough return on investment from social media might have some doubters in the marketing world singing a different tune.

Will Group Deals on Facebook be a win-win for consumers and brands alike?

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Ashley Graves is the Editorial Director at Vitamin IMC and a student in the Masters in Integrated Marketing Communications at Northwestern University’s Medill School. She is hoping that her favorite clothing retailers will decide to use Group Deals. She can be reached at AshleyGraves2010@u.northwestern.edu.