Last month Groupon’s U.S. Revenues took a nosedive of nearly 30%, falling from $88.9M in January to $61.7M in February. Following a miniscule drop in revenue from August to September, Groupon had seen consistent growth from September through January. So what’s to account for this dramatic drop in February? Could it have anything to do with their grotesque Super Bowl commercials? You be the judge.
Before we take a trip down memory lane, back to Groupon’s Super Bowl ad campaign, let’s take a look at the 2010/11 Groupon revenue estimate, as reported by Erick Schonfeld at TechCrunch. As you can see from the graph below, revenue took a substantial nosedive in February.
Could tanking revenues have anything to do with the Super Bowl campaign, which aired at the beginning of the month during the big game, on February 6? Schonfeld was sure to ask in his TechCrunch coverage, “how much of the group=buying site’s revenues are U.S. versus international and how is it doing in its home market, especially after its disastrous Super Bowl ads.” David Griner at Adfreak also asked, “Did Groupon’s ads cause revenues to tank?”
Before you continue reading, if you haven’t seen the ads in question yet, take half a minute to click here and watch the most controversial ad, the Tibet ad. For those of you who don’t know, Groupon staged a bunch of mock-PSAs, directed by Christopher Guest. The ads included PSAs mocking deforestation, choosing a cruise over saving the whales and, most offensive of all, basically saying, “Who cares about the situation in Tibet when you can eat great Tibetan food at a cheap rate with Groupon?!”
So, do you think that the Groupon ads had anything to do with the decline in revenue in February of 2011? Well, my guess is that it might have had a little bit to do with the revenue drop, but there are a lot of other factors to take into consideration. For instance, in February we were coming off the tails of a ton of great holiday deals in December and people ready to spend all their holiday gift money in January. Not to mention the fact that February is the shortest month with three less days of deals than January. Griner at Adfreak also brought up a good point, asking if increased competition from rival services like LivingSocial may be partly to blame.
That being said, Schonfeld mentioned that comScore data on Groupon’s total unique visitors also showed traffic peaking in December 2010, at 10.7M unique visitors, and dropping to 9.7M in February, just after the infamous Super Bowl snafu. However, he says that he reached out to Groupon CEO Andrew Mason about the comScore data, who told him, “My man, don’t you know that sh*t is bullsh*t?”
So, what’s your take? Do you think the Groupon Super Bowl commercials are to blame for Groupon’s February revenue nosedive? Or did the decline result from other issues such as the end of the holiday season and competition?
Graphs via TechCrunch