How valuable can a Groupon ad be to a local company? Groupon CEO Andrew Mason has some powerful examples. Check this out from WSJ:
“[W]e recently featured helicopter lessons in Boston and sold 2,600 in four hours. To put that in perspective, this fellow has been in business since 1985 and in the quarter century leading up to his Groupon he had acquired a total of 5,000 customers.”
Yep – his customer base went up by more than half in just four hours. The “social coupon” model is a win for everyone. There’s no up-front buy from the retailer – they only pay when customers purchase the Groupon. There’s incentive for people to be social – the Groupon only takes effect if a threshold of purchases is met, so you want your friends to buy, too. (Although as some have explained, there can be a dark side to the Groupon model.)
I strongly believe there is room for local media in this kind of play. There are dozens of Groupon-like companies now, and some are offering white-label or co-branded solutions for local media companies. And other local media operations are starting to build their own, like PegasusNews in Dallas, which just launched its own group-buying solution.
The big unanswered question: how will this impact established local online advertising, from coupons to Yellow Pages to traditional display ads? Stay tuned, because it’s going to get very interesting over the next 12 months.
Here is Mason’s interview with WSJ: