A major moment of reckoning is coming for Chicago’s very own tech darling (at least for now). Yes, we refer to Groupon, the online discount coupon company founded by former Northwestern University music student Andrew Mason.
Groupon is about to go public with its first stock offering on Nov. 4.
That IPO is happening, however, as serious questions about the discount coupon company and its long-term viability loom larger with each passing day.
In fact, in an Associated Press article late last week, Forrester Research analyst Sucharita Mulpuru flatly stated “Groupon is a disaster.” The analyst went on to put another nail in the Groupon coffin. “It’s a shill that’s going to be exposed pretty soon.”
Competition is one problem facing Groupon. Other companies, including online search giant Google, have introduced their own version of the discount formula, and many observers have begun to insist there is now too much competition for Groupon to flourish.
Indeed, Groupon is now expected to be valued at between $10 and $12 billion, rather than $25 billion valuation that was being bandied about as recently as June.
In any event, if Groupon is to succeed on the scale that many recently believed it could — and would, it must show it knows how to market itself in a manner that creates a brand image that readily sets itself apart from — and well above — the competition that is springing up everywhere.
Groupon’s debut Super Bowl commercial was a disaster
Which brings us, of course, to the discount coupon’s ill-fated debut as a marketer of note during the 2011 Super Bowl. Groupon’s first national ad, you may recall, featured a commercial about Tibet that was developed by the notoriously edgy ad agency Crispin Porter + Bogusky.
Loudmouthed critics among the public took major issue with the Groupon commercial the second it debuted last February. They maintained the commercial was disrespectful of the plight of the Tibetan people, while a few supporters of the ad, ourselves included, argued the criticism was harsher than the commercial merited.
But the fallout was large enough and loud enough to force Groupon and Crispin to pull the TV spot almost immediately. Groupon also apologized and said the ad would never run again.
It was, to say the least, an embarrassing beginning for a company that will depend on marketing to make its mark and grow.
Which leads us to the latest advertising effort from Groupon that has quietly launched this month.
Yeah, one might not have known the campaign had even begun if sources hadn’t tipped us off and e-mailed us an example of the outdoor work now popping up in Chicago.
A Groupon spokeswoman did not return an e-mail seeking comment about the campaign.
The campaign, which is believed to include out-of-home, TV and online advertising in its game plan, is designed to promote “Groupon Now,” a deals-on-demand service available via mobile apps that allows users to find the best deals near where they are located at any time.
We haven’t used the app, but many users have given it high ratings in the iTunes store, though a few complain that the service isn’t yet available in enough markets.
Top local agencies pitched Groupon Now campaign
As recently as August, several Chicago ad agencies thought they had a shot at becoming the shop that would work with Groupon on this Groupon Now campaign.
Our sources tell us that among the agencies invited to pitch for the business were Energy BBDO/Chicago; Euro RSCG/Chicago; Tom Dick & Harry Creative Co./Chicago, and quite possibly Young & Rubicam/Chicago.
None of the agencies we contacted would comment on the pitch, but several sources within these shops did confirm the pitch took place.
As it turns out, much to the dismay of the ad shops that thought they might help Groupon make more history on the marketing front, Groupon went in a different direction.
In the end, so sources say, Groupon opted to develop the creative concept for the campaign in-house, and then work with a production company (believed to be on the West Coast) to produce the campaign.
It’s not surprising Mason chose to go in-house. Such an approach would give the Groupon honcho and his marketing minions full control over the project, thereby lowering the risk of possible embarrassment.
First in-house ad effort leaves much to be desired
Plus, as Mason has been all too happy to let the world know, he employs hundreds of wordsmiths who happily go about writing the copy for the thousands of deals Groupon promotes. On numerous occasions Mason has said he believes it is the quality of Groupon’s coupon copy that helps separate the company from its many would-be competitors.
But if the outdoor ad for Groupon that we saw is an example of what the company’s in-house talent can do, Mason is going to have to rethink his marketing strategy yet again in a big way. This much is for sure: Apple it ain’t.
One rather prosaic billboard ad now on view in Chicago has the question “Hungry?” at the top with the “G” (for Groupon, get it?) emphasized.
The main body of copy includes the limp lines “Make taste buds bloom. Hundreds of deals on food and more. Right around the corner. Right now.” The tag line appears to be “Groupon Now! Deals on demand.” This is copy that is obviously straining way too hard to be clever and falling way short.
This time around, however, Mason and his Groupon family really have no one to blame but themselves for their advertising failings.
Contact Lewis Lazare at LewisL3@aol.com
