

Groupon Slashing Online Ad Spending in Q3 - rogk11
http://blog.mixrank.com/new-data-groupon-slashing-online-ad-spending

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meritt
Groupon has simply gotten big enough they don't have to advertise as
aggressively, especially in search advertising. Their partnership with
AdParlor via Facebook is also running very strong.

Groupon all along has been bringing in substantial cash but also spending a
huge amount towards marketing. They've saturated their markets in the US. They
can now drop that marketing budget and see massive profits in their US
business.

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cadwag
That would be like saying "since everybody already knows about Apple and their
products and they are bringing in substantial cash, they can cut their
spending." But instead, Apple has been increasing their ad spending as revenue
has gone up <http://gw5.appleinsider.com/article/?id=14437> (bit old, but
still holds).

Personally, I know that I only reach for a groupon or a coupon of any sort
when it's shoved in my face. For them to make such a drastic shift amidst
questionable profitability on exactly the first day of a new quarter makes me
inclined to agree with the author and say that it's a strategic shift in
direction.

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bosfla
They are testing their theory that their ad spending amounts to capex. will be
very interesting to see what happens. if ad spending jumps back in Q4 or
revenues plummet then its probably the final nail in the coffin for the IPO
valuation. if not, then for the first time in a long while my expectations for
groupon long term will tick up.

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debacle
I think it's just a change in strategy. Everyone I know who is a Groupon
repeat user gets the emails and visits Groupon almost daily. The ROI they're
getting from online ads is probably becoming marginal.

It wont solve the pathological customer issue, but that's the other weight on
Groupon's back.

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Evbn
Nice to see Groupon empathizing with its customers, who can't afford to spend
75% of marginal revenue on customer acquistion.

