One of my proudest accomplishments to date was flying on a trapeze.
Seriously, who gets to do that? Actually, a whole bunch of people, considering I booked the flight on social deals site Groupon. The company just turned 2 last month, but it’s at the forefront of an explosive set positioned at the lucrative intersection of commerce, social and local.
It’s exciting times for Groupon and its ilk, who offer location-based discounts thanks to groups buying in collective bulk. LivingSocial just pulled in a $175 million investment from Amazon, and Google is looking to land the big one through an acquisition of Groupon for a rumored $6 billion.
As search and tech industry analyst John Battelle explains, the acquisition and integration of Groupon would be Marissa Mayer’s first major move as head of Google’s location and local services division. This deal, which would be Google’s biggest purchase, along with the fact that Mayer — considered an instrumental and efficient leader — was charged with the post last October, illustrates just how important the Internet giant perceives local services to be.
What it means for marketers
1. There are new local advertising opportunities.
For local businesses, sites like Groupon, Foursquare and Yelp have signaled the promised land in their potential to turn Internet traffic into foot traffic. As Internet companies seek to land advertising dollars that used to go to local newspapers, many local service sites with models similar to Groupon have found at least early success, and more are cropping up all the time.
Merchants are lined up in months-long waiting lists to get their deals in front of Groupon subscribers. Expanding on its popularity, the site just launched Groupon Stores and Deal Feed, which lets merchants offer customizable deals at any time and delivers personalized streams of deals to users, respectively. It’s obvious why Google is so eager to get in on the social-local advertising game. And it’s clear why businesses should take advantage of the opportunity, as well.
2. Search isn’t where it’s all at.
Google’s biggest challenger is Facebook, despite each seeming to play a very different role in the lives of Internet users. Google’s inability to develop a profitable social success weighs heavily on the as-yet undisputed search champ. Facebook is lauded by advertisers for its granular audience targeting, which was reflected in third quarter data showing that the site accounted for one in four online display ads.
Moreover, people have moved beyond search for their browsing and shopping needs. Suggestions and referrals are more relevant when they come from a trusted, like-minded network than from blue links or even gold stars. When recommendations and deals for nearby restaurants, activities and services come straight to a user, local search has less utility. That’s not to say anyone should write off local search, but it does require that businesses diversify their efforts when marketing online.
3. There’s a new definition of social.
Groupon and sites like it beg the question, “What is social, anyway?” Social media used to be about people sharing stuff with people they know or a tool for communication. Now it includes leveraging collective interest among a self-curated group of strangers with little in common other than an eye for a bargain.
I’m a satisfied Groupon user, but I have never shared daily deals with my networks. And yet, most deals tip (Groupon’s term for when the vendor’s reserve number of coupons are purchased) within hours of the offer’s announcement. While social media first introduced multi-directional communication to the business-consumer relationship, deal sites represent a one-way communication (the business makes an offer and the consumer either accepts or rejects, no counter-offer, no complaining) while staying under the social umbrella.
Oddly enough, social now encompasses anonymity for the benefit of the greater good; face-to-face social grace isn’t a requirement for businesses playing in the social space. As Google knows, what matters most is where you show up.