Thursday, March 24, 2011

Groupon's $30,000,000 Super Bowl Ad

Groupon is paying a heavy price for running a bad Super Bowl ad.

Data gathered from Groupon's site, where they show how much each deal costs and how many are purchased, indicates that revenue fell from $88.9MM in January to $61.7MM in February. also shows that traffic to Groupon fell from 10.7MM unique visitors in January to 9.7MM unique visitors in February.

So apparently those bad ads and the resulting publicity cost Groupon a million customers and $27.2MM in just one month. Just in case anyone at CP+B is wondering, that's not how advertising is supposed to work.

Now to be fair, there may have been other reasons sales fell: people didn't like the deals, a post christmas shopping malaise, or the massive snow falls kept people from opening their front doors. But the timing of the decline is just too coincidental to ignore.

Frankly, the thing that surprises me the most is that Groupon chose to advertise at all. Their growth without significant mass media advertising has been phenomenal. The social component that's built into the product ensures incredible word of mouth distribution of their message.

If nothing else, Groupon has taught us all a valuable lesson: television advertising is a powerful tool that  can do more harm than good when its in the hands of people who think they're smarter than everyone else.

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