Groupon’s Marketing Prowess

Groupon is a great example of how a company can turn to consumers, offer them a great service and encourage them to spread it around to reach an even bigger audience. This is marketing at its best! Can you imagine selling a product or service and sharing the service becomes very enticing due to the greater cost savings?

Many companies such as Living Social, Crowd Savings, Bloom Spot, Tippr and Scoop St have copied this huge success and raise the question that this particular business could easily be copied. This is a concern that some analyst predict due to the buyout that Google recently announced and Groupon subsequently turned down; read here. 

This service spreads virally and now contaminates over 35 million people! This year alone they are projected to generate over 500 million! Talk about the fastest growing company ever! The business model is simple, offer a product that a company is selling at a deep discount and if enough people buy the product then you receive the discounted price. What does this do? It provides exposure for the companies that are otherwise not known and it brings in customers, and a lot!

Through word of mouth and large amounts of users registered in their website, Groupon has accomplished what few have and many want, successful advertising, with a 98% success rate.

Small Businesses and Social Networking Sites

Small business need to jump in the bandwagon of social network advertising. Too much of their online advertising expenses are going to the wrong channels such as email and standard websites to promote their products. We are coming into an age where social media sites such as Facebook are attracting millions if not hundreds of millions of users and that is where the money is at. In a place where users spend hours and hours of their valuable time to reconnect with friends, what better way to promote and advertise your products in the pages where the majority of customers spend their time?

We are in a world where technology is advancing at a rapid pace and existing technology is being replaced and/or improved at an alarming speed. Small businesses might have very few cash at hand for such lucrative advertising expenses but getting their foot in social networking sites such as Facebook might potentially boost sales and justify the expenses associated with such advertising costs.

Many reasons exist on why such investments are not being done on social sites and I believe one of the main reasons is because of a lack of experience. Facebook, twitter, and other existing social networking sites are relatively new and attract a younger generation. This trend of course is diminishing as older generations are starting to play around and experiencing social networking sites themselves; see the research here.

As these sites get more and more popular, small companies will see the benefit of advertising to different age groups and new spending will come about because of this. Although this is not the case now, the future seems to point to that direction. Until then, expect less than average returns on small businesses that choose to spend their online advertising money in emails and traditional websites to attract business.  

Source:

http://www.inc.com/news/articles/2010/11/small-business-spend-most-on-websites-not-social-media.html