There's no denying that social buying is hot right now. Groupon success stories of insane proportions -- including a $4 million one-day deal with the Gap -- have prompted a significant surge in look-alike social-buying services, some of which are targeting specific demographics, like moms.
But wait a minute. We know consumers love social buying. Who doesn't love a good deal? But what about the businesses themselves? Do the data support brands' current overwhelming desire to leverage these new promotional opportunities?
A new Rice University study concludes that Groupon is more beneficial for consumers than it is for businesses. According to the study, Groupon promotions were profitable for 66 percent of the businesses surveyed, but unprofitable for 32 percent. More than 40 percent of the respondents indicated they would not run such a promotion again.
According to the study, promotions are most beneficial for businesses when structured in a way that does not cannibalize sales to existing customers. Among the service businesses studied (restaurants, educational services, tourism, and salon and spa), restaurants fared the worst with their Groupon experiments, and salons and spas were the most successful.
Be inspired. To learn more about social buying and other emerging marketing strategies, attend the iMedia Breakthrough... Read more
Archive for September, 2010
"Chief Creative Kevin Roddy Leaves BBH" -- Just the latest ad agency chief creative departure in a long list over last few months. The list is pretty long. Gerry Graf, Ty Montague, Rosemarie Ryan, Alex Bogusky, Eric Hirshburg, and Eric Silver. Several articles have been written pontificating on the reason for this exodus. Ad Age has been pretty vocal. One of their articles offered ideas ranging from the economy to business-as-usual, to high maintenance creatives. All have some plausibility.
Another article was a bit more interesting. This one was written by a creative who had been witness to more than one such agency resurrection via the hiring of a chief creative officer. His insights were a bit more telling, and to a former client and current consultant like me, much closer to the likely reason. This writer suggests that the problems reside with the leadership of the agency, the culture of the agency, and/or the clients of the agency, some of which a new creative chief can help solve, but certainly not on their own.
To be fair, most of the creatives who were mentioned above had long tenures with the agencies they chose to leave. Still, the crux of the problem is... Read more