We Live in the Age of Groupon

Jackpot winnerSome of you know that one of my favorite pastimes is dining out. It’s obvious when you see the anti-Situation abs that I sport nowadays. [I've been doing a lot of GTL lately though minus the T so I'm expecting to get my washboard abs back.] Sorry, I digress. :)

In any case, one company that seems to be thriving in this awful economy is Groupon. I don’t have hard facts. My opinion is simply based on word of mouth, social media buzz and earned media coverage that I’ve seen for the company in the past couple of years. Most recent was Groupon’s first national launch with Gap where it likely garnered more in free publicity than the amount of Gap Groupons it sold. The company has transformed the way the average consumer saves by featuring mainly half price deals that change daily. The concept is attractive because it builds anticipation from its users on a daily basis, which I believe is a key factor, in developing any successful social media program. It has also changed the average consumer’s purchasing behavior, but it’s also fueled other companies to follow its business model such as Living SocialHalf Off Deals, and many others.

For PR pros, its greatest impact can be seen with media outlets in smaller media markets. Local TV stations (affiliates of the major networks) and radio networks have jumped on board by offering their own version of Groupon on their web sites. It’s their way of making up for the continued decline in advertising sales the past few years.

Basically, what happens is a tradeout between one of these media outlets and a local retailer or a chain with a local presence.  The tradeout between the two parties is usually a specific number of gift certificates, which the media outlet will sell on its online store, in return for promotional spots that, at times, even includes interviews with a spokesperson from the retailer. If it’s TV, it could even include a segment that airs in the local morning and evening news. And if the broadcast personalities have a following on social networks, they’d promote the retailer there too.

The amount of air time one receives is much more than the value of the gift certificates. What does this mean to PR pros? It means the line between dealing with news producers and advertising sales representatives have gotten thinner.  It means that the advertising account executive has control over content that is aired within the confines of a news program. I’m not surprised that this is becoming more common. Both parties have to make money, but where does this leave the PR pro.

In my case, I just adapt. My clients, which are in the restaurant business, are happy to get the publicity. Bottom line, it drives traffic and increased sales to their stores. Isn’t that one of the objectives of PR?

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