Poopon Groupon

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If you haven’t seen, or heard of, Groupon’s offensive Super Bowl ad, then I’m honored that you’ve chosen to crawl out from under the rock you live in to read this blog post.

Lots of folks in the social media have been writing about and commenting on this today, so I’m not sure I want to be yet- one-more-person dumping on Groupon. For a particularly good blog post, see Liz Strauss’ Groupon: When Being Clever Offends and How to Win One for Tibet. Liz provides some great ideas for how Groupon should apologize and recover from this mistake.  Liz also remarked:

“It must be a hugely stressful and exciting opportunity to find your startup with a slot for a commercial at the Super Bowl. Who wouldn’t want to make a fabulous debut? Can you imagine the meetings that must have been to plan that Groupon ad? Bet it was fun exciting and filled with clever ideas … all meant to go for the win!”

This is part of the story I want to comment on: The decision-making process.

Was there no one at Groupon or the agency that put the ad together that had even the slightest thought that the ad was potentially offensive? Did Groupon or the agency even think to test response to the ad before airing it? Did Timothy Hutton get paid that much to be associated with the ad? And why, in the first place, was Groupon advertising on the Super Bowl?

I don’t know the answers to those questions, so it’s a bit unfair of me to criticize Groupon, but the signs point to not just a failure from an execution standpoint, but a failure from a planning (or strategic) perspective.

In fact, I’m betting that the ad was an act of desperation on the part of Groupon. From my armchair perspective, it appears to me that Groupon:

Didn’t define its objectives for its Super Bowl ad. Yes, I know — the Super Bowl reaches a gazillion people. But for many brands, the important questions to ask are: 1) Will we reach the people who make up our target market? and 2) Will we incrementally improve awareness? If the purpose was to increase awareness, I’m not sure the ad accomplished the goal. Hutton says he’s saving money because he and 200 other people bought a groupon. If you didn’t know about Groupon, you were probably asking: What the hell is a groupon? And the juxtaposition of something very un-local (Tibet) with the core proposition of Groupon (save locally) was potentially confusing. Which Groupon might have discovered if it had tested the ad, which I don’t think it did.

Is feeling the pressure of not having a defensible strategy. Groupon’s business model has no barriers to entry. LivingSocial is living proof. In fact, I believe that banks in particular will have a strong interest in doing what Groupon has done, and with the help of merchant network assemblers (firms that enable merchant-funded rewards programs), will use their online banking customer base to match retailers and merchants with group-related offers. Desperate firms do desperate things. Like blow a wad of money on the Super Bowl. Just ask Pets.com.

Groupon should definitely take Liz Strauss’ advice about apologizing and rebuilding trust. But the firm’s problems go way beyond misfiring on a single ad.

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