

The Groupon Model - entrepreneurial

There is all this hype about Groupon and social buying. Why aren’t advertising platforms doing this instead of buying platforms that do this?&#60;p&#62;Currently, the advertising platforms such as google adwords, facebook advertising, adbrite, buysellads.com, etc are all based on models that support “the highest paid advertiser will have the best placement.” I know when I search, I want the best deals to show up - not who paid the most to give me the potentially worst deal for me. Opinions?
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hammock
Groupon takes an old model - "one day sale only" or "first 1000 people to sign
up get a free t-shirt" - and makes it work in the social space.

Groupon is promotions, not advertising. Trying to compare it to Adsense will
be extremely difficult.

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alizaki
AdSense, to my knowledge, doesn't only optimize for maximum CPC but rather for
max earnout for Google, a large part of which is the likelihood of you
clicking the ad. This is a fair determination of the quality of the "deal"/ad,
I suppose.

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wacheena
In my experience modern ad systems use, among other things, CPC x CTR. Using
CPR x CTR is good for all stakeholders: 1\. Advertiser value - the better/well
targeted the ad, the lower the cost 2\. Publisher value - higher CTR means
more clicks, means more $$$. 3\. And most importantly, user value - higher CTR
is generally a good indicator of better targeted ads

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entrepreneurial
Really good points. Thanks for the feedback. You still have to layout money
before you make any, hence the reason why the groupon model is so enticing
from an advertiser's perspective.

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instakill
Adwords on Google considers CTR as well as Quality Score to determine which ad
will display, not the CPC that you're willing to bid.

