Groupon PR: Whoops! It Happens

“People forget we’re a new company. It’s one of those things where, OK, we’re still growing up as a company. Now that we figured that out, there’s no reason to think it’s going to happen again.”

So said a Groupon exec in response to a Financial Times reporter asking about accounting irregularities that have plagued the recently IPO’ed tech startup.

I’m not sure whether to laugh or cringe in embarrassment at this bizarrely amateur statement. Worse is that it was made to The Financial Times, a newspaper read by investors and business executives. The very people Groupon can least afford to offend by its confusing messaging.

Unfortunately, this sort of cavalier attitude toward corporate communications is nothing new at Groupon. It follows a long line of embarrassing remarks, statements and simply poor PR from the firm. In each, and especially that quote to the FT, it’s as though the company is basically saying, “Hey, we’re young; shit happens.”

But the company isn’t really that young. Not when it has gone public at a $17 billion valuation. And not when it is generating nearly $500 million in revenue $1 billion-plus in annual revenue. Airbnb it isn’t. It’s now playing in the big leagues, and that requires a far more sophisticated level of public communications savvy.

Which makes its statement to the FT, in response to the firm having to write down its most recent earnings report following a string of high-profile returns of its big-ticket items, all the more remarkable. Groupon has been a public firm for six months. It has a new, very senior PR executive, Paul Taaffe, the former chairman and CEO of Hill & Knowlton, running its corporate comms team. One would think it would have its PR act together by now.

But it doesn’t. Not even close, if its recent public statements, combined with some of its other PR faux pas, are taken into account.

Before I go any further down the Groupon-bashing hole, let me be clear that I don’t envy its PR team’s position. The company is facing immense pressure by investors and merchants to deliver value. Its margins are getting eaten from all sides by upstart competitors. And it’s no secret that its business model is easily replicated.

But that’s still no excuse for such amateur and flippant remarks. Stating that you’re a new company and that it takes time to work through some issues is fine if you’re a local McDonald’s franchisee in El Paso. It’s not so good if you’re listed publicly on NASDAQ, if your company chairman tells Bloomberg News that your firm would be “wildly profitable” (during the IPO “quiet period” in which company executives are forbidden from talking about financials) or if executives at your company are known to speak to reporters without fully considering their points.

Groupon may have a lot going for it but its corporate comms efforts must improve. It is a public company now which means everything it says and does is scrutinized. It simply can’t afford to communicate with the media or the public in such a brazen manner.

It’s time for Groupon’s PR to grow up to the level of its public stature. It owes its shareholders and customers more than a “We’re young; shit happens” excuse.

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  • I couldn’t agree more with this post.  But…and yes, there is a ‘but’…no matter how senior the PR exec, no matter how much media training has likely gone on…when you’re dealing with the same management/spokespeople, you can control their mouths like a hand puppet.  My feeling? The Groupon exec decided ato say what he wanted vs the party line he was trained to say.  I’ve seen this time and time again, that inspite of best advice, corporate execs still feel they can say what they want…to their peril  and that of the company they represent. The only way they learn is when they utter bonehead phrases like this.  Then, maybe, they’ll start listening to the PR guy they brought in to help them. Maybe.

    • Well said, Elissa. No more how experienced and wise of a PR pro is leading a copmany’s comms effort, he or she ultimately can’t control what actually comes out of the mouth of its executives in print or broadcast media. That can be mitigated some by robust media training, but even then, I’ve seen experienced, 30-year-plus PR pros who have been media trained and go out and still same the same off-message quotes to the media.

      And you’re quite right that the way a company moves on from something like this is to have it exposed in the media and for those internally, as well as investors and board members, see how embarrassing the comments are for the firm’s reputation. Once that is settled, my experience has found that a company’s messaging quickly gets in line with its overall strategy.

  • I wonder how much Groupon is spending on PR counsel. I’m guessing it got a 50% off special pricing, hence, the PR counsel is discounted. What Groupon has done inadvertently to a large degree is bring a negative image to the small businesses that it is trying to help. When I see a Groupon today, I automatically think the small business using the service is in financial trouble and looking for a way to stay afloat. Yes, it’s great for the buyer to get things at a discount, but when you can’t redeem a Groupon because the business has gone under isn’t helping Groupon’s image. It’s happened to me. Good thing though and I was impressed by this, Groupon refunded the purchase. Great post and pretty bold to name names.

    • Well played, Joe, re the 50% discount on PR counsel. Though, to be fair, Paul Taaffee, Groupon’s new PR chief, is one of the very best in the business. And I’m sure he has his plate full trying to keep Andrew Mason and co. in line from a messaging standpoint. 

      In that respect, I look forward to seeing a more disciplined and mature comms strategy from Groupon in the months ahead. Perhaps we chalk up the company’s comments to the FT as the work of a rogue spokesperson. Maybe not. Either way, it doesn’t really matter in the long run. What does matter is that the company gets its act together from a PR standpoint and starts communicating, internally and externally, like the multi-billion-dollar public company that it has become.

  • High five for the El Paso reference!

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