Hands down, this is the best advertising option I know of. It works. It works for today’s consumer in today’s economy and it does something I’ve never seen any other form of advertising do before..
The problem with current advertising models
Most advertising options are passive. Billboards, magazine ads, web banners, commercials are all similar in the sense that that advertiser is paying money to expose their brand to their projected demographic, hoping that they’re receptive, paying attention and have their wallet nearby. The advertiser has no control over the point in the buying cycle their prospective customer is in when they are exposed to the ad and it is often against their will and viewed as an intrusion. My DVR knows this well. I’ve fast forwarded through every commercial I was supposed to watch in the last 2 years and felt victorious every single time. Advertisers are hoping through repeated impressions that their ads will translate into actual sales at some point. The process is long, resource-intensive and the effectiveness is hard to predict and measure. Meaning, advertising in this manner is prohibitive to most small business owners and probably with good reason.
The biggest drawback of all is the lack of hard numbers. If I’m spending $10,000 a month advertising in a magazine I want to know a definite number on how many of the phone calls or visitors to my website are due to that $10,000. Determining the conversion rate of impression advertising is a guessing game at best and is best left to big companies with years to work with.
The evolution of advertising
Pay-per-click is an improvement. You advertise to potential customers when they themselves are searching for your product or service and you only pay when they have responded to your ad by clicking it. You control where they are taken after interacting with your ad and can easily launch a campaign or take one down. The fluidity of this form of advertising lends itself to businesses that want to advertise something temporarily and it can be used in conjunction with other forms of advertising or to gauge the response a product, service or promotion is garnering. Still, pay-per-click (or PPC) is an Internet-only option and at its best will increase the number of traffic to your website and only a fraction of that traffic will actually buy something. It’s a great advertising option if your business is primarily online where people can buy right then and there and your website converts visitors into buyers at a high rate, but there’s gotta be something better..
Cue the dramatic music.
The best advertising option I know of: Deal a day sites!
Deal-a-day sites or daily deal sites are a new phenomenon lead by popular websites such as Groupon and Living Social. These companies and the others like them, feature one business offering a sampling of their product or service at a great discount for a 24 hour period. Prior to running the promotion the business will consult with the service running their promotion. With their guidance, several factors will be decided:
- What is included in the offer
- The price point the coupons will be sold at
- The minimum amount that must be sold before the promotion is valid (when applicable)
- The maximum number that can be sold (when applicable)
- The time people are given to redeem the offer
- The locations the offer is valid at
From there, Groupon or Living Social distributes the promotion to their mailing list consisting of thousands of people local to your area that have all signed up to receive the daily promotions. The email they receive contains all the details of the promotion, information about your business, a link to your website and a well-placed “Buy” button directly above a timer that is counting down the time remaining in the offer. Subscribers are also given easy tools to share the promotion with their friends and family via Facebook and Twitter and are encouraged to do so.
(See the video for a demonstration)
The Results
Quick stats from Groupon:
- 5 million groupons have been sold since November 2008
- 4.5 million subscribers currently receive their daily promotion
- Los Angeles alone has 230,000 subscribers
The idea has been wildly successful. Julie Anne Mossler, Groupon’s PR Manager she said that Groupon averages 1,000 groupons sold per promotion in each of their larger markets. For businesses that might be overwhelmed by the sudden influx in business, caps on the amount of coupons available for purchase can be instituted. Julie explained, “Groupon is the opposite of the traditional direct marketing experience, where merchants pay up front, hope for traction and typically are disappointed. We deliver an unparalleled amount of motivated buyers to local businesses, while providing unbeatable deals that can’t be found elsewhere. It’s a win/win relationship for customers and merchants.”
Merchant Feedback
Furthermore, Julie said that 97% of merchants that have been featured want to be again. The merchants I spoke with agreed. Natalie Brown, the Marketing Director at Davey’s Locker, a whale watching company in Newport Beach, California said she was attracted to Living Social’s service because it gave her business a way to reach a younger demographic than she typically does. She said Living Social gave her access to the “computer generation” and was pleased with the results of the promotion they had run. Das Jesson of Island Surf Camp in Santa Monica, California shared a similar sentiment. “Dealing with Living Social has been great. The promotion was a success and even though the discount was so extreme, the amount of business that has come to our company because of it has made it profitable.”
Is this right for your business?
Only you can answer that question, but I can tell you that what these services are looking for are compelling offers made by companies that evoke excitement. Groupon is looking to bring the people on their mailing list the “Absolute best to eat or do or see in their city.”
To learn more about the service Groupon offers, click here. They have a great 2 minute video that will explain more about how their specific service works.
To get in touch with Living Social, click here.
I appreciate your time and hope this has been helpful. All feedback is welcome.
Thanks!















