Groupon Media Plan

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In the Advertising Media class at Syracuse University, we were assigned to create a media plan for Groupon.

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Groupon Media Plan

  1. 1. Jen Brotman Julia MazerovADV 500 Falkner Media Plan May 9, 2011
  2. 2. Table of ContentsExecutive Summary........................................................................................................................2Situation Analysis...........................................................................................................................3 Marketing Objectives............................................................................................................3 Market Size............................................................................................................................ 4 Competitors............................................................................................................................5 LivingSocial..................................................................................................................5 Google Offers..............................................................................................................5 Deals on Facebook.....................................................................................................6 Incoming Threats...................................................................................................................7 Market Share.........................................................................................................................7 Awareness..............................................................................................................................8 Marketing Goals....................................................................................................................8 Marketing Budget..................................................................................................................8 Creative History......................................................................................................................8 Target Audience....................................................................................................................9 Geography...........................................................................................................................12 Timing and Purchase Cycle................................................................................................13 Media Mix........................................................................................................................... 14Creative Brief.................................................................................................................................16Objectives, Strategies & Rationales..........................................................................................17 TargetAudience...................................................................................................................17 Target Media Mix................................................................................................................ 21 Reach/Frequency................................................................................................................30 Media Budget......................................................................................................................32 Geography...........................................................................................................................37 Scheduling/Timing..............................................................................................................38 Sales Promotions..................................................................................................................39Works Cited...................................................................................................................................42Appendix.......................................................................................................................................44 Table of Contents 1
  3. 3. Executive SummaryProblemThere are few barriers to enter the daily deals industry, and the category is becoming increasinglycrowded. Though Groupon is currently the leader in social couponing, rivals such as LivingSocial,Facebook, and Google threaten its rank within the market.SolutionEstablish Groupon as the leader within the industry through a 12 month advertising campaignthat will generate mass awareness and increase new users by 20%. The campaign will highlightGroupon’s offerings that differentiate it from other competitors, such as its social component.Target AudienceGroupon’s target audience consists of white females ages 25-44 with minimum household incomesof $50,000. These individuals are employed, lead active lifestyles, and enjoy partaking in newexperiences with family and friends.BudgetThe campaign’s $20 million budget will be split 86.5/13.5 between national and spot media,respectively. Seven spot markets were selected based on their high concentration of the targetaudience and their attitudes towards coupons and online shopping.Reach/FrequencyThis campaign will maintain a minimum R/F of 75/3. Maximum R/F will be achieved in launchmonths (June, July and August) as well as during the holiday season (November and December)with 80/3.5 national and 85/4 spot.SchedulingThe schedule begins in June and flights until May. Internet will run continuously throughout the yearwith bursts of magazine, network and cable television during select months. Media will run in spotduring June, July, August, November and December.Media MixThe campaign schedule will use early morning network news, primetime and late-fringe cabletelevision, targeted Internet advertising, keyword search, and women’s magazines to reachaudiences on a national scale. Morning and evening drive spot radio and outdoor transitadvertisements will run in the seven spot markets.PromotionsTwo promotions will be held to drive new Groupon subscriptions and increase brand awareness.Groupon will sponsor Restaurant Week in the seven spot markets, and solidify brand identity throughits relevancy to the event. Groupon will also interact with consumers through a concert engagementpromotion, where it will reward consumers who participate in a voting contest. Executive Summary 2
  4. 4. Situation AnalysisMarketing ObjectivesProductGroupon Incorporated, launched in November 2008 by Andrew Mason, is the world’s largestprovider of online daily coupons. The organization presents deal-of-the-day discounts toover 60 million subscribers worldwide. Groupon offers coupons primarily within the health,fitness, and beauty markets, and these daily coupons are sent to Groupon subscribers viae-mail. Individual companies set the minimum number of vouchers that must be purchasedin order for each deal to take effect, and pay nothing if not enough subscribers sign up forthe offer. Also, deals are available for a limited time only, typically one to three days. If theminimum threshold is met, Groupon then takes 40-50% of profits from the merchant. Thisbusiness concept not only imbues Groupon with a social element, but also reduces risk forretailers (Deatsch, Internet Retailer, 2011).PriceIt is free to sign up for Groupon. The price of purchasing a Groupon offer will vary dependingon the product. Groupon typically offers 50-90% off discounts on a variety of services, suchas a $25 coupon that provides a $50 bike tune-up, a $40 coupon for a $90 massage, or a$25 one for $100 worth of fitness classes. Figure 1: Place - Mobile and Online (Groupon, 2011)PlaceGroupon is an online service available inover 150 markets in the United States (Pogue,The New York Times, 2011). Subscribers canpurchase deals directly from their smartphonesor from Groupon’s website.PromotionAs of now, Groupon is not heavily promotedin traditional media. However, the corporationleverages social media tools such as Facebook,Twitter, and an online blog to share informationabout contests, new products, and pertinentindustry information with consumers. Grouponalso places banner ads on targeted websites. Situation Analysis 3
  5. 5. Past PromotionGroupon reportedly spent $3 million to run a 30-second commercial during SuperbowlXLV. The commercial was launched as part of a charitable effort to raise funds for severalnational non-profit organizations, but Groupon’s misguided first attempt at televisionadvertising blatantly missed the mark. The ad, featuring actor Timothy Hutton, receivedharsh criticism for its insensitivity towards the people of Tibet and the conflict occurring there(Stone, Bloomberg Business Week, 2011).“We thought we were poking fun at ourselves, but clearly the execution was off and the jokedidn’t come through,” explains CEO Andrew Mason, who launched the ad in collaborationwith Colorado agency Crispin Porter & Bogusky (Patel, Advertising Age, 2011). Masonapologized for the misstep and pulled the ad on February 10, 2011, five days after it initiallyaired (MFP).Despite the backlash, Groupon is said to have gained subscribers since the ad’s debut andGreenpeace raised $100,000 in donations within 48 hours of the Superbowl (Griner, Adweek,2011).Market SizeGroupon has pioneered the daily deals industry, which is now valued at $1.25 billion andis expected to grow to $3.93 billion in 2015, according to a projection from BIA/Kelsey inMarch (Bensinger, Bloomberg, 2011). Though similar platforms have been tried in the past,Groupon’s success hinges on perfect timing. Launched in the era of Facebook and theiPhone, Groupon easily attracts consumers on-the-go looking for coupons who can sharebargains easily with friends (Stone).The daily deals industry continues to increase in size and value as more startups beginto exploit the opportunity that Groupon discovered first. The scope and significance ofthe market changes daily as competition swells, new technologies develop, and marketresearch increases.Figures 2 & 3: Growth of Groupon-Like Daily Deal Services (Yipit, 2011) & US Daily Deal Site Revenues (eMarketer, 2011) Situation Analysis 4
  6. 6. CompetitorsLivingSocialLivingSocial, established in Washington, D.C. in 2009, is Groupon’s biggest competitor.LivingSocial offers one deal every day with discounts of up to 90%. Once a user purchasesa deal, he or she can share it with their friends and receive the deal for free if three friendspurchase it as well. LivingSocial aims to encourage “experiences that bring an adventurous,loyal new following to local businesses” (LivingSocial, 2011).Google OffersAfter a failed attempted at buying Groupon, Google has recently piloted a platform calledGoogle Offers, which currently serves only five markets. Offers is part of an ongoing effortat Google to make new services that give consumers great deals while helping connectbusinesses with customers in new ways (Patel).The service will augment the already existing Google Boost and Google Places, whichcollaboratively connect consumers with millions of local businesses. With Google Boost,businesses owners can easily create a profile for their business and boost search resultswith photos, video, and other rich media. Google Offers will leverage this extensive directoryto promote deals to customers on the Google Offers webpage and through a daily e-mail(Boulton, Eweek, 2011). “Google’s deal service will lack the social aspectof deal-sharing that customers have come toenjoy. “There’s no big social tie to keep usersfrom treating it like a network instead of another What makes Google such a “ potentially formidable rival is its ability to meld local offers withsearch feature users use and leave,” says Clint its dominant search engine.Boulton of Enterprise Technology (Boulton). Deatsch Situation Analysis 5
  7. 7. Deals on FacebookFacebook has launched a test of its Deals on Facebook in six U.S. cities. The service aims todifferentiate from similar platforms by embracing the social aspect of deal-sharing and focusmore on discounted concerts, wine-tastings, and other experiences that are enjoyed withfriends and family. The deals will include additional discounts if the user invites friends to joinin and purchase the offer (Boulton).Deals on Facebook also eliminates many of the barriers that customers find frustrating aboutGroupon. Family and friends are already on Facebook and would not need to sign up for anextra service. Sharing, posting, and inviting is also easier on Facebook (Slutsky, AdvertisingAge, 2011). “ Instead of collecting a 50% cut commission“ for each discount purchased, Facebook may Nobody else quite has the instead let potential businesses advertise clout of Facebook for social. sponsored units. This will attract businesses tired Peter Krasilovsky of losing half of their profit cuts to Groupon and LivingSocial, and has the potential to undermine the entire system these companies have established. Figure 4: Perceptual Map High Brand Recognition Minimal Social Experience Very Social Experience Low Brand Recognition Situation Analysis 6
  8. 8. Incoming ThreatsIncoming CompetitorsIncoming social coupon sites pose the greatest threat to Groupon. There are very fewbarriers to enter the market, and imitators are sprouting up at an alarming rate. Moreover,local business owners, looking at Groupon’s 50% cut of profits, certainly welcome the idea ofhaving other options (Stone).Flaws in Business ModelIn addition, the question of whether Groupon promotions are truly profitable for businessesis still debated. In a September 2010 study of 150 businesses, 32% of respondents indicatedthat their promotions are not profitable, particularly for those within the restaurant category.Even those who did profit were unsure that an influx of new customers and a temporaryspike in sales would lead to long-term success for their businesses (Dholaki, Rice University,2010).Merchants are still analyzing how to best use Groupon. Some are overwhelmed by floodsof new business when featured as a daily deal, and others are discouraged by a lackof consumer interest. “Daily-deal sites will suffer if businesses stop participating in dealsbecause they can’t find a way to satisfy all customers,” says research analyst SucharitaMalpuru, “if these merchants come to realize these customers are not coming back…thewhole model falls apart”(Galante, Bloomberg, 2011). Flaws in Groupon’s business modelwill certainly arise as more research on the industry surfaces, forcing it to adjust to remainsustainable.Market Share Figure 5: Membership Base (Online MBA) Membership Base (Estimated 000)Membership BaseGroupon currently has more then LivingSocial70 million users, as compared to 3%LivingSocial’s approximately 28 million. GrouponMembers are the most important aspect 8%of these social couponing websitesbecause without users, they would notexist. It is also estimated that Google Google OffersOffers will gain 150 million members and 18%Deals on Facebook will gain 600 million.This will significantly skew Groupon’sshare of the market (Online MBA, 2011). Facebook Deals 71% Situation Analysis 7
  9. 9. RevenueIn 2010 Groupon reported $760 million in revenue (Patel). Groupon makes approximately$100 million a month, while LivingSocial makes approximately $50 million a month. There isnot yet data reporting Google Offers’ and Deals on Facebook’s revenue (Online MBA). Figure 6: Valuation (Online MBA)Valuation of CompanyGroupon is estimated to be valued at $15 Value (Estimated in Billions)billion as compared to LivingSocial, which Groupon LivingSocial 6%is estimated to be at $2.9 billion. As Google 1%Offers and Deals on Facebook get off theground, they are estimated to be valued at$172 and $75 billion, respectively (Online FacebookMBA). Deals 28%MarketsGroupon is located in over 565 marketsaround the world. LivingSocial is located inapproximately 200 markets worldwide. AsGoogle Offers and Deals on Facebook are in Googletheir infancy, they are only located in 5 and 6 Offersmarkets respectively (Online MBA). 65%AwarenessAwareness of Groupon has increasedexponentially since its establishment, particularly in the past year. Groupon attracted 10million unique visitors to its website in November 2010, up 54% from October, according tocomScore (Rueter, Internet Retailer, 2011). Since January 2011, there have been almost 15million unique visitors to the site. Groupon also recently reported that it has a waiting list ofover 35,000 businesses wishing to be featured on the social promotion platform, thoughthe company can only promote approximately one in every eight interested businesses(Dholaki). This means that both users and retails are growing more aware of Groupon.Marketing GoalsThe primary goal is to increase awareness of Groupon and establish it as the leaderwithin the daily deals industry amongst both consumers and potential retailers. Groupon’scampaign aims to increase new users by 20% in the next 12 months (MFP).Marketing BudgetGroupon will spend $20 million in this year’s campaign in an effort to increase brandawareness and establish leadership in a crowded category. According to Aaron With,Groupon’s editor-in-chief, “Groupon’s voice is all about surprise and subverting theexpectation of how customers expect to be communicated to by a company“ (Stone).Groupon will effectively use its marketing budget in this campaign to creatively reachconsumers and achieve lasting brand loyalty. Situation Analysis 8
  10. 10. Creative HistoryThe idea for Groupon came to Pittsburgh-native Andrew Mason in 2008 by accident. Whilepursuing a master’s degree in public policy at the University of Chicago, Mason created anaction network called The Point that allowed constituents to combine their voices and lobbycompanies to make policy changes. The Point was hugely unsuccessful, but the idea ofcreating a collective forum for consumers translated well to the market of local commerce(Stone).Groupon was born out of The Point and raised $1.1 billion from investors in a short 13months. In just over two years, the company has jumped from 120 to 5,900 employees andexpanded from 30 to 550 markets (Stone).The corporate culture at Groupon exhibits a comedic approach to discounting. Thecompany employs 70 comedy writers, and each daily deal comes with a whimsicaldescription of the service being offered. “Yet suprisingly, Groupon has yet to establish acohesive brand identity through advertising. Ahighly targeted marketing strategy will be the key toGroupon’s success in a competitive market. Wine-making is generally “ considered the best way to get to know wine, narrowly beating out writing it letters and getting stuck with it on top of a ferris wheel.Mason seeks to further expand Groupon’s services Groupon, description of a dealwith a new installation called Groupon Now, whichwill allow customers to enter their location into asmartphone and immediately generate a list ofdeals. The deals are not only available on that particular day, but at the specific time theyrequest the search. The software will allow merchants to draw customers to empty tablesduring slow hours, and “embed Groupon further into the daily routines of consumers andmerchants” (Stone).Arguably the fastest-growing company in the history of the Internet, Groupon undoubtedly “possesses the prowess to reach new markets and users using subversive marketing ideas. The addition of Groupon Now provides an exciting“ opportunity for Groupon to revolutionize consumer We want people to think routines, bounce back from their disastrous stab about Groupon every time at television advertising, and leverage traditional they walk out the door. and nontraditional media in this year’s upcoming Rob Solomon, former President of Groupon campaign. Situation Analysis 9
  11. 11. Target AudienceThe majority of Groupon’s subscribers are women 18-44 who are either married or single.They have at least graduated college and are currently employed, making $50,000 ormore (Groupon Works, 2011). Because there is such a broad range of subscribers, Grouponmust narrow its focus, using attitudes and psychographics to target those who are activeusers or could be active users. Due to Groupon’s nature of sending daily e-mails with offers,especially for local businesses likely never previously visited by users, the following attitudesare most important for active users. These factors determine the target audience:Figure 7: Target Demographics (Simmons, 2009) Like to hear about Coupons draw Always look products or services them to places out for special Weighted Target by e-mail they don’t shop offers Index Female 106 110 109 108 25-44 119 114 102 112 White 91 100 102 98 Graduated College + 110 124 107 114 Currently Employed 107 110 101 106 HHI $50K + 116 107 104 103 Presently or Never Married 108 102 97 102Base: Adult PopulationThe weight is distributed equally across all three attitudes.Figure 8: Target Lifestyle Attitudes & Opinions (Simmons, 2009) Lifestyle Attitudes & Opinions Index I like to stand out in a crowd 123 I enjoy taking risks 120 I like to unconventional things 119 I like to pursue challenge, novelty, and change 117 I enjoy entertaining people in my home 112 I do things on the spur of the moment 111 You should seize opportunities in life 108 I like to have a close circle of friends 108 I like to just enjoy life 105Base: White women 25-44 with a HHI of $50K+The weight is distributed equally across the following attitudes: coupons draw me to stores Ido not shop, doing more shopping/Internet than before, I like to hear about products andservices by e-mail.The VALS survey reports that Groupon’s target falls into the innovators and experiencerscategories. Situation Analysis 10
  12. 12. Product UsagePeople use Groupon for numerous reasons, which include using it as a guide to explorethe city or to find a good deal (Groupon Works, 2011). For subscribers, it is always a dailyinteraction when the deals are received via e-mail. 60% of U.S. Internet users access dailydeals one or several times a day. They also forward the deals on to family and friends moreoften than not (eMarketer, 2011).Figures 9 & 10: Frequency with which US Internet Users Access/Forward Daily Deals Situation Analysis 11
  13. 13. GeographyGroupon began in Chicago, Boston and New York City. It is now located in more than 150markets in North America (MFP). Based on the cities with women 25-44 who are doing moreshopping/Internet than before and who agree that coupons draw them to stores they donot shop, Groupon should focus their efforts in the following spot markets:Figure 11: Spot Markets (Simmons, 2009) Doing more shopping/ Coupons draw them to Markets Internet than before places they don’t shop Weighted Indices Washington, DC 137 127 132 San Francisco, CA 147 96 122 Boston, MA 121 114 118 New York, NY 108 109 109 Los Angeles, CA 108 106 107 Atlanta, GA 108 106 107 Chicago, IL 98 108 103Base: White women 25-44 with a HHI of $50K+The weight is distributed equally across the two categories. These markets are also allwithin the top 50 markets for online shopping (Top Market Data, 2010). Also, based on datafrom the 2010 census, the target makes up 38.7% of the population 18 and over in theseseven selected markets. There are over 631,000 individuals in this group (Census, 2010). Thefollowing two figures show the size of the market based on the target as compared to theindex and the locations based on size across the United States respectively: Figure 12: Spot Market Comparison (Census, 2010 & Simmons, 2009) Spot Markets: Comparing # of People in Target with Indices 160
 Washington, DC Index: 132 Size: 77,858 140
 Boston, MA Index: 118 Size: 58,815 Los Angeles, CA Chicago, IL Index: 107 Index: 103 Size: 85,654 Size: 87,654 120
 New York, NY Index: 109 San Francisco, CA Size: 230,843 Index: 122 100
 Size: 66,018 Atlanta, GA Index: 107 Size: 24,269 80
 60
 40
 Situation Analysis 12 20

  14. 14. Figure 13: Geography Chicago Boston San Francisco New York Washington, DC Atlanta Los AngelesTiming and Purchase CycleThere is some seasonality regarding Groupon usage, with spikes during summer monthsand during the holiday season (Quantcast, 2011). This is likely due to the nicer weather amdpeople having more free time in the summer and then increased gift giving and bonusspending during the end of the year. Groupon also has a short purchase cycle due to itsnature of sending out daily offers.Figure 14: Groupon Visitors (Quantcast, 2011) Situation Analysis 13
  15. 15. Media MixGroupon users are very active in multiple media. Based on the average index (weightedequally across both age groups and both the first and second quintiles), the most receptivemedia are the Internet, outdoor, and magazines.Figure 15: Quintiles (MRI+, 2009) Media Quintile I (25-34) Quintile II (25-34) Quintile I (35-44) Quintile II (35-44) Total Internet 136 117 120 131 126 Outdoor 111 109 119 117 114 Magazine 116 102 114 108 110 Radio 108 103 103 114 107 TV 65 82 68 87 76 Newspaper 51 81 81 85 75Spending Figure 16: Spending by Media Type (TNS, 2009)Due to the newness of the Spending by Media Typecategory, there is a lack 5000
of information available 4500
on who is spending what. 4000
LivingSocial is currentlyadvertising online, 3500
particularly on Facebook, 3000
as well as on television. 2500
Google offers has created 2000
a promotional YouTube 1500
video. Based on that 1000
information, one can infer 500
that social couponing 0
websites are advertisingonline and on television. V
 
 
 s
 n
 
 
 r
 V
 r
 r
 io es io TV pe ag oo pe @o k
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T ad ad in e
 ot 
M pa pa td ica az or k
R t
R bl Sp Ou ws ay ws ag Ca tw nd po or nd M Ne Ne Ne Sy tw t
S Su tl
 Ne Na NaFigure 17: Competitive Spending (TNS, 2009) Competitive Spending Based on information from TNS for couponbug.com, dealtaker.com, couponcabin.com, couponsuzy.com and Valpak.com
 valpak.com, it is evident that online coupon websites are 19%
 spending most of their money on spot TV, syndication, cable Couponbug.com
 27%
 TV, and network radio (TNS, 2009). Some of these websites also have individuals input a zip code to provide local CouponSuzy.com
 19%
 coupons, similar to the locality of Groupon. Dealtaker.com
 24%
 Couponcabin.com
 11%
 Situation Analysis 14
  16. 16. Competitive Media MixFigures 18 and 19 depict the media mix spending of the previously mentioned couponwebsites and their share of voice respectively. While these sites might not represent the mostrelevant competition, they can give Groupon an idea of who is spending money where, howmuch they are spending, and their share of voice. Because these coupon websites are notspending nearly as much money as Groupon will be spending in this campaign and somemedia are not even used, such as magazines, this leaves Groupon a lot of room to gainsignificant share of voice within several media formats.Figure 18: Competitor Media Mix (TNS, 2009) Media Couponbug Dealtaker Couponcabin Couponsuzy Valpak Spot TV 100% 99.2% 99.5% 87.7% 33.0% Syndication 0.0% 0.8% 0.0% 12.3% 0.0% Cable TV 0.0% 0.0% 0.0% 0.0% 8.4% Network Radio 0.0% 0.0% 0.0% 0.0% 58.6% Nat Spot Radio 0.0% 0.0% 0.5% 0.0% 0.0% Total 100% 100% 100% 100% 100%Figure 19: Share of Voice (TNS, 2009) Media Couponbug Dealtaker Valpak Couponsuzy Couponcabin Total Spot TV 32.5% 27.6% 7.6% 19.4% 12.9% 100% Syndication 0.0% 7.3% 0.0% 92.7% 0.0% 100% Cable TV 0.0% 0.0% 100% 0.0% 0.0% 100% Network Radio 0.0% 0.0% 100% 0.0% 0.0% 100% Nat Spot Radio 0.0% 0.0% 0.0% 0.0% 100% 100% Total 27.5% 23.5% 19.4% 18.7% 10.9% 100% Situation Analysis 15
  17. 17. Creative BriefClientGrouponTargetA working woman who is making money to spend money. She is highly educated andknows what she wants. She likes to treat herself and relax on the weekends. This womanknows a good deal when she sees one and she likes to try new products or services. Whileshe spends a lot of time on the Internet, whether for work or entertainment, she also enjoyssocializing.ChallengeTo increase awareness and establish Groupon as the leader within the daily deals industryamong both consumers and potential retailers.ObjectiveIncrease new users by 20% in the next 12 months.PropositionPromote the exciting daily deals and benefits of using Groupon, creating a consumer desireto purchase more Groupon deals.Reason to BelieveBecause of Groupon’s breadth of deals and significant discounts, Groupon has alwaysprovided users with the deals they want, at the price they can afford. Groupon createsa want among users to try new things and experience their cities. It satisfies the need topartake in fun and exciting things, without spending too much money.Mandatory ItemsLogo, tagline, explanation of Groupon and examples of deals Creative Brief 16
  18. 18. Objectives, Strategies & RationalesTarget AudienceObjectiveAim advertising toward women 25-44 with disposable income to spend and the desire to usecoupons in order to create awareness and establish Groupon as the leader in the category.StrategyThe target audience is determined by averaging several Simmons indices including: Liketo hear about products or services by e-mail, coupons draw them to places they do notshop, and they always look out for special offers. The target audience fits the followingcharacteristics: Women 25-44 who are primarily white and are either married or single. Theyhave at least graduated college and are currently employed with a household income of$50,000 or more.RationaleAlthough many people like using coupons and appreciate a good deal, these women aremore likely to use Groupon and actively purchase the daily deals. They index higher thantheir male counterparts with attitudes regarding online coupons and deals.Women are the target because they are they majority of subscribers on Groupon, makingup 77% of users (Groupon Works). They are more actively on the look out for special offersand want to hear about products and services through e-mail.This age range is appropriate for Groupon because they are technologically savvyand have grown up with the Internet and broadband for the most part. They have alsoexperienced tough economic times, so they appreciate a good deal. Price promotions,coupons, and localized services like Groupon are important tools for marketers working toattract and retain Gen X customers, which are part of the target. Most Gen Xers also feel aneed to balance life and work, so they enjoy social experiences and look for deals to notbreak the bank (Mintel, 2011).Their education, employment and household income go hand in hand. Higher educationleads to higher pay, which leads to more disposable income to spend on services such asGroupon. Objectives, Strategies & Rationales: Target Audience 17
  19. 19. This age Average
Annual
Expenditures
by
Age
(Mintel,
2010)
group alsospends more $8,000

on average $7,000

than the restof consumers $6,000

in many of the $5,000

categoriesof deals that $4,000

Groupon All
consumer
units
 $3,000

offers. These Target
consumer
categories $2,000

include food, $1,000

alcoholicbeverages, $0

apparel and Food
 Alcoholic
 Apparel
and
 Entertainment
 Personal
care
services, beverages
 services
 products
and
 services
entertainment Figure 20: Average Expenditures by Age (Mintel, 2010)and personal care products and services.The indices below were weighted equally because these three attitudes are equallyimportant to the active user on Groupon. If users did not like to hear about products orservices and were not looking out for special offers, then there were would be no point insigning up for Groupon. Even once they have signed up and coupons still did not enticethem to actually purchase the deals, then again, Groupon would not be the service forthem.While some of the indices are not that high, such as race, the size of that population wasmore important. Also, since Groupon is a relatively national product that is based online, itcan be accessed by everyone, therefore factors such as race and marital status are lessimportant. It is more important that they are online, looking for deals, and that they have themoney to purchase these deals.Figure 21: Target Demographics and Psychographics (Simmons, 2009) Like to hear about Coupons draw Always look products or services them to places out for special Weighted Target by e-mail they don’t shop offers Indices Female 106 110 109 108 25-44 119 114 102 112 White 91 100 102 98 Graduated College + 110 124 107 114 Currently Employed 107 110 101 106 HHI $50K + 116 107 104 103 Presently or Never Married 108 102 97 102 Objectives, Strategies & Rationales: Target Audience 18
  20. 20. Figure 22: Target Lifestyle & Opinions (Simmons, 2009) Lifestyle Attitudes & Opinions Index I like to stand out in a crowd 123 I enjoy taking risks 120 I like to unconventional things 119 I like to pursue challenge, novelty, and change 117 I enjoy entertaining people in my home 112 I do things on the spur of the moment 111 You should seize opportunities in life 108 I like to have a close circle of friends 108 I like to just enjoy life 105Base: White women 25-44 with a HHI of $50K+The weight is distributed equally across the following attitudes: coupons draw me to storesI do not shop, doing more shopping/Internet than before, like to hear about products andservices by e-mail.VALS SurveyThe target audience falls into the innovators and experiencers categories. Innovators aresuccessful people with abundant resources. They are the most receptive to new ideas andtechnologies. Innovators are very active consumers, and their purchases reflect cultivatedtastes for upscale, niche products and services (VALS, 2011).Image is also important to innovators as anexpression of their taste, independence, andpersonality. Their lives are characterized byvariety and their possessions and recreationreflect a cultivated taste for the finer things inlife (VALS).Experiencers become enthusiastic about newpossibilities. They seek variety and excitement.Their energy finds an outlet in exercise, sports,outdoor recreation, and social activities, allof which Groupon caters to with their deals.Experiencers are avid consumers and spend acomparatively high proportion of their incomeon entertainment and socializing (VALS). Objectives, Strategies & Rationales: Target Audience 19
  21. 21. A Day in the Life This is Kelly Russell, a white 28-year-old female from northern New Jersey. Kelly currently lives in Syracuse, NY as a house-mom in a sorority. She is single and works at SRC Inc. as a corporate communications specialist, earning about $55,000 per year. She earned her Bachelor’s from Lafayette College and pursued a certification in public relations from New York University. She goes to work everyday for the 9 to 5 grind.Outside of work, Kelly lives a pretty social life. She has friends visit her in her apartment stylehome within the sorority house. She hosts dinners and wine nights, while going out to eatother times. She and her friends go to the mall and the movies some weekends, while otherweekends are spent going to sporting events at Syracuse University or barbecues when theweather is nice. Kelly and her friends love to try new things.A typical weekday begins at 6:30 a.m. when Kelly wakes up to the radio, eats a quickbreakfast and then watches the news. She checks her e-mail and heads out the door. Kellylistens to the radio, usually 107.9 FM on her way to work and stays connected all day via theInternet and her Blackberry. She listens to Pandora while she works and then listens to theradio again on her way home.During dinner and then after, when Kelly is by herself, she watches TV. She usually puts on theUSA Network and watches reruns until she goes to bed around 10 p.m. Objectives, Strategies & Rationales: Target Audience 20
  22. 22. Target Media MixObjectiveUse a combination of Internet, women’s magazines, network and cable television to reachthe target on a national scale flighting from June to May. During the summer monthsand the holiday season, sales promotions, outdoor, and spot radio will provide additionalemphasis in the seven spot markets.StrategyNationalJune to May Net TV (Early Morning News) Use 30-second advertisements to inform audiences about Groupon’s product benefits. Net Cable (Primetime and Late Fringe) Use 30-second advertisements on specialized networks to spread brand awareness on a national scale. Internet Use keyword purchases to maximize search. Use Banner and rich media ads on targeted sites to establish relevancy between the brand and online content. Magazines (Women’s) Use full page and half page four color ads to depict the variety of Groupon’s featured discounts.SpotSeven markets from June-August, November and December. Outdoor Use transit advertising displays on buses, subways and trains to reach consumers and spread brand awareness outside of the home. Spot Radio (Morning and Evening Drive) Use 30-second advertisements during morning and evening drive times to promote product benefits during crucial day parts.RationaleMedia quintiles from MRI+ are used to determine the targeted media mix. Quintiles I andII are averaged for women 25-44 to calculate the overall index for each media type. Thehighest-ranking media quintiles for women 25-44 mirror current media trends, which implyincreased importance of online social media and place-based advertising (MFP). Objectives, Strategies & Rationales: Target Media Mix 21
  23. 23. Figure 24: Quintiles (MRI+, 2009) Media Quintile I (25-34) Quintile II (25-34) Quintile I (35-44) Quintile II (35-44) Total Internet 136 117 120 131 126 Outdoor 111 109 119 117 114 Magazine 116 102 114 108 110 Radio 108 103 103 114 107 TV 65 82 68 87 76 Newspaper 51 81 81 85 75All other indices are gathered from Simmons 2009 data. As Simmons does not providespecific information on Groupon, the target: white, employed females 25-44 with a minimumHHI of $50,000, is weighted against the following attitudes: • Coupons draw me to stores I don’t shop • I do more shopping/Internet than before • I like to hear about products/services by e-mailThese opinions were chosen based on their relevancy to Groupon’s daily, online couponservice format, through which subscribers receive discounts via e-mail.NationalNetwork Television (Early Morning News)Television ranked second to last in heavy use amongst the target, with an overall index of76. However, PMN grids express that approximately 42% of the target watches early morningnews between the hours of 7AM and 9AM.Figures 25 & 26: Network Television Indices (Simmons, 2009) Cumulative Audience M-F 7AM-9AM Index NBC 115 ABC 111 Early Morning News Viewed Yesterday Index Today Show (NBC) 117 Good Morning America (ABC) 111Base: White women 25-44 with a HHI of $50K+, run against previous attitudesNBC’s “Today Show” and ABC’s “Good Morning America” were especially popular among thetarget, indexing at 117 and 111, respectively. Morning news provides an ideal opportunityfor Groupon to engage with its intended audience at the beginning of the day. A reminderabout Groupon will make the product top-of-mind for consumers as they begin theirmorning commute—a time when they’ll have a chance to check out the daily deal sentto their cell phone that day or an opportunity to look into the service as they wait for theirtransportation. Network TV also has high reach, which is helpful. Objectives, Strategies & Rationales: Target Media Mix 22
  24. 24. Network Cable Television: (Primetime and Late Fringe)Network cable television will be used to reach the target throughout the 12 monthcampaign. Basic national cable has an overall penetration of 90% (MFP). This extensivereach will help spread brand awareness for Groupon through specialized cableprogramming that attracts audiences with a diverse range of interests.PMN grids suggest that women 25-44 are inclined to watch television during primetime andlate-fringe day parts, particularly for entertainment purposes. The target indexes aboveaverage for VH1, Comedy Central, Bravo, and TLC. Shows such as TLC’s Say Yes to the Dress,and Bravo’s Top Chef feature content that is highly relevant to the apparel, beauty and foodindustries for which Groupon offers discounts. In fact, Bravo offered Groupon discounts ateach of the chef’s 12 restaurants this past summer, which allowed audiences to experienceTop Chef meals at a significantly discounted price (Hampp, Advertising Age, 2011). Thissocial promotion creatively engaged consumers outside of the home and elevated brandvalue for both Bravo and Groupon.Figure 27: Cable Television Indices (Simmons, 2009) Cable TV Index VH1 125 Comedy Central 121 Bravo 120 TLC 116 Food Network 114 TBS 113 ABC 111Base: White women 25-44 with a HHI of $50K+, run against previous attitudesThough media quintiles indicate relatively low use of television amongst the target, itspotential for widespread reach cannot be ignored. Early morning news programmingprovides an ideal moment for Groupon to connect with its audience before ad clutterbecomes a concern, and primetime and late fringe cable television will reach an amount ofconsumers unattainable by any other medium.InternetIn 2011, the Internet is expected to enjoy the highest growth of all media (MFP). As Grouponis an online service, online advertising will provide click-through capability directly to itshomepage and drive new user subscriptions more effectively than other mediums. TheInternet already exists as the go-to medium for couponing. According to a survey of over1,000 broadband Internet users, 74% of consumers search multiple online coupon sourceseach week, and 25% spend up to an hour shopping for the best online discount dealsduring this time period (Reuter).In addition, media quintiles indicate that women 25-44 are more active on the Internet thanany other media type, with an average index of 126 for the top two quintiles. PMN gridsdemonstrate heavy use of the Internet among the target during all hours of the day forboth entertainment and information purposes. A Groupon ad might catch the attention ofsomeone on their lunch break surfing the web for something fun to do that evening, or afterthey get home from work and are seeking some inexpensive weekend ideas. Objectives, Strategies & Rationales: Target Media Mix 23
  25. 25. The Internet provides numerous opportunities for Groupon to actively engage withconsumers through several advertising formats on a variety of websites. Keyword search,banner ads and rich media account for 47%, 23%, and 11% of Internet ad spending,respectively (MFP). Simmons data illustrates that for the target, the likelihood of thementioned ad types leading to a purchase either often or very often is significantly aboveaverage:Figure 28: Internet Ad Type Indices (Simmons, 2009) Ad Type Index Banner Ads 196 Keyword Search 192 Full-Motion Video Ads 185Base: White women 25-44 with a HHI of $50K+, run against previous attitudesThe 12 month campaign will allocate a portion of the media budget towards search inorder to capture the 81% of women using broadband who claim to search multiple sourcesfor coupons each week (Reuter). Groupon will purchase the following keywords in order tocover a wide range of related phrases for all 12 months of the campaign.Figure 29: Search Words (Adwords, 2011) Keywords Local Monthly Searches *Cost Online Coupons 386,000 $11,040 Restaurant Coupons 201,000 $6,030 Deal of the Day 135,000 $4,050 Daily Deals 90,500 $2,715 Spa Coupons 18,100 $543 Local Deals 9,900 $297 Entertainment Coupons 6,600 $198 Total 829,100 $24,873*Costs explained in AppendixGroupon will purchase the following keywords in September, October, January, and Februaryto maintain brand awareness while no other mediums are utilized for advertising:Figure 30: Additional Search Words (Adwords, 2011) It is especially important Keywords Local Monthly Searches Cost for Groupon to maximize Deals in Chicago 40,500 $1,215 its search results potential because top competitor Deals in New York 40,500 $1,215 Google exercises a Deals in Boston 22,200 $666 threatening advantage with Deals in San Francisco 14,800 $444 its dominant search engine. Deals in Atlanta 14,800 $444 Deals in Los Angeles 12,100 $363 Deals in DC 12,100 $363 Total 157,000 $4,710 Objectives, Strategies & Rationales: Target Media Mix 24
  26. 26. The campaign will also include banner and rich media advertisements on targeted sites.Simmons data indicates that the target indexes significantly above average for onlineactivities such as using dating services, blogging, watching videos, and listening to Internetradio.Figure 31: Internet Activity Indices (Simmons, 2009) Internet Activity Index Dating Services 161 Blogging 148 Videos/TV/Movies 142 Internet Radio 141 News/Weather 136 Online Games 132Base: White women 25-44 with a HHI of $50K+, run against previous attitudesAccording to a Nielsen Wire study, the number of American users frequenting online videodestinations has increased by 339% since 2003, and time spent on video sites has climbed2,000% during the same period (Nielsen Wire, 2011 ). Media trends indicate that Internetusage amongst the target will only continue to increase as more channels for online socialconnectivity surface.Though Simmons provides no specific data about social media, its clout is undeniable.According to a Netpop Research survey of over 1,000 broadband users, 73% contribute tosocial content online. Of these individuals, 39% post content on a social networking site, 27%rate or review products, 13% upload videos, and 12% post content on a blog or forum.Groupon will place ads on targeted websites such as Facebook.com, Match.com, andTripadvisor.com in order to engage with the target within its preferred online platforms. Datafrom Quantcast provides indices, reach, and % coverage of white women 25-44 with aminimum HHI of $60,000 in relation to the selected websites:Figure 32: Website Selections (Quantcast, 2011) Website Index Target Reached % Coverage of Target Facebook.com 87 3,437,637 57.0% Match.com 171 854,929 19.2% Tripadvisor.com 191 304,685 6.8% *Pandora.com 57 278,368 6.3% Slate.com 178 264,465 5.9% iVillage.com 169 196,481 4.4% **Blogher.com N/A N/A N/A*Though Pandora exhibits a low index according to Quantcast, PMN grids illustrate that the target listens to web radioduring multiple day parts.**Specific Quantcast data relative to the target is unavailable for Blogher, but the site has extensive reach to 20.5 millionunique users each month. 96% of these individuals are female, and 68% are between the ages of 25 and 41, according todata compiled by the blog (Blogher, 2011). Objectives, Strategies & Rationales: Target Media Mix 25
  27. 27. The Internet is a crucial media outlet through which to reach consumers because it is theonly platform on which the target is actively seeking product information. Effective andhighly targeted Internet advertising will allow Groupon to remain as the frontrunner within thesocial couponing competitive landscape.MagazinesFull page and half page four color ads will be placed in five women’s magazines to spreadbrand awareness throughout the campaign. Magazines rank third for heavy use amongwomen 25-44, with an average index of 110. According to the PMN grids, the target spendsthe most time reading magazines in the late evening or before bed on weekdays, andbetween mid morning and mid afternoon hours on the weekends.The target is particularly inclined to read magazines that fall within the fashion, healthand beauty categories. The content of the listed magazines aptly aligns with many of thediscount services that Groupon offers, and will foster a strong brand connection betweeneach title and the product.Figure 33: Magazine Selections (Simmons, 2009) Magazine Index Lucky 136 Self 134 Vanity Fair 126 Vogue 119 Allure 116Base: White women 25-44 with a HHI of $50K+, run against previous attitudesMagazine advertising provides an ideal opportunity for Groupon to penetrate its intendedmarket while it is especially attentive to marketing messages. Relative to other media types,magazines command the most attention from consumers. The average reader spends 43minutes reading an issue, and is much less likely to partake in other activities while readingcontent (MPA, 2011).Magazines also effectively encourage further brand engagement by driving readers toInternet sites. According to BIGresearch, approximately one-third of magazine readers reportthat they have used a computer or mobile device to access a magazine’s website in thepast six months (MPA). Once online, consumers will be more prone to visiting Groupon’shomepage after recalling its presence within the magazine. Objectives, Strategies & Rationales: Target Media Mix 26
  28. 28. Spot (Seven Markets)Spot Radio: Morning and Evening DriveRadio is an important medium to leverage throughout the duration of the campaignbecause it is an inexpensive option for increasing reach and frequency. As the target iscomposed of women who are employed, morning and evening drive times will be crucialday parts for reaching the target on its commute to and from work. Radio advertisementscan be particularly effective in the morning at the time that Groupon sends out its dailydeal. A message about a new product each morning will remind the target that Grouponcan also become a part of their morning routine if they sign up for a subscription.Figure 34: Radio Selections (Simmons, 2009) Radio Listening Index Morning Drive Adult Alternative Mon-Fri 6AM-10AM 131 Adult Contemporary Mon-Fri 6AM-10AM 120 Classic Rock Mon-Fri 6AM-10AM 113 Evening Drive Adult Alternative Mon-Fri 3PM-7PM 145 Classic Rock Mon-Fri 3PM-7PM 120 Adult Contemporary Mon-Fri 3PM-7PM 117Base: White women 25-44 with a HHI of $50K+, run against previous attitudesRadio is also important because it is a highly localized medium with 80% of radio being local(MFP). Consumers are loyal their local radio stations and DJs, and promotional opportunitieshave great potential to reach impulse buyers out of home (MFP). Adult Alternative, AdultContemporary, and Classic Rock radio formats indexed particularly high among the target. Objectives, Strategies & Rationales: Target Media Mix 27
  29. 29. OutdoorGrowth in outdoor revenues in 2011 is projected at 3% to 7%, and the presence of placed-based media will only continue to increase as audience-tracking technology develops(MFP). Outdoor advertising has incredibly high reach potential, and is particularly effectivein spot markets to create awareness about local brands and businesses. The members oftarget will see transit-based outdoor ads on their way to work every morning, a time whenthey will be enticed by the prospect of a daily discount.Because the target consists of employed females who lead active, on-the-go lifestyles, thecampaign will include outdoor advertisements at transit locations in the seven spot markets.Outdoor advertising ranked second for heavy use among women 25-44, with an averageindex of 114. These women are also highly observant of place-based transit advertisements,as indicated by above average indices for opinions regarding transit displays.Figure 35: Attitudes towards transit ads (Simmons, 2009) Attitude Index I often notice the ads on trains 136 I often notice the ads on buses 128 I often notice the ads at bus stops 119 I often notice the ads on billboards 116Base: White women 25-44 with a HHI of $50K+, run against previous attitudesThe ads will be placed in transit locations depending on the forms of public transportationoperating in each spot market. Bus and bus stop advertising will be present in all sevenmarkets, and billboards will be placed along traffic-heavy freeways by which the targetcommutes into each of the seven spot cities. Train and subway stations in NYC, Boston,Washington D.C., San Francisco and Chicago will feature displays both within the stationsand on the train cars themselves. Objectives, Strategies & Rationales: Target Media Mix 28
  30. 30. Personal Media Network GridsFigure 36: PMN Grids based on 12 women in the targetWeekday Television Radio News. Mag. Web Web Radio Any Info Ent Bkg Any Info Ent Bkg Any Info Ent Any Info Ent Any Info Ent Any Info Ent BkgShortly after waking up/before breakfast 5 3 2 2 5 2 2 1 1 1 1 1 6 6 1 1During breakfast 3 1 1 2 1 1 2 2 3 3 2Mid to late morning 3 1 2 1 1 1 10 10 3 2 1 2During lunch 2 1 1 7 3 5 2 1 2Early to mid afternoon 1 1 8 6 3 2 1 2Late afternoon/before dinner 1 1 1 1 5 1 3 2 2 2 1 7 6 3 1 1During dinner 6 3 4 2 1 1 1 1 4 3 3After dinner/mid to late evening 10 1 9 1 1 1 1 1 1 1 2 1 2 9 5 7 2 2 1Weekend Television Radio News. Mag. Web Web Radio Any Info Ent Bkg Any Info Ent Bkg Any Info Ent Any Info Ent Any Info Ent Any Info Ent BkgShortly after waking up/before breakfast 5 5 3 1 3 2 1 4 4 2 1 1 1 1 1 1During breakfast 5 3 3 2 6 6 2 2 1 2 1 1 1Mid to late morning 3 2 1 4 3 3 3 3 1 6 3 6 5 3 4 1 1During lunch 3 2 1 1 1 1 3 2 3 2 2 2Early to mid afternoon 2 2 2 1 2 2 2 1 5 4 3 4 2 4Late afternoon/before dinner 2 1 2 1 2 1 1 1 1 1 4 1 3 1 1 1During dinner 2 1 1 1 1 1 1 1 1 1 1 1After dinner/mid to late evening 8 1 7 4 3 1 2 1 1 2 2 2 2In bed/just before going to sleep 6 1 5 2 1 1 1 1 3 3 2 2 Objectives, Strategies & Rationales: Target Media Mix 29
  31. 31. Reach & FrequencyObjectiveAchieve an 80/3.5 R/F nationally during the campaign kick-off months from June to Augustand again from November to December. Then achieve a 75/3 R/F nationally for Marchthrough May. Spot R/F is 85/4 from June to August and November to December. There is noadditional spot heavy-up during the remaining months.StrategyThe lowest overall R/F is achieved from January to May at the end of the campaign with75/3. Highest overall will occur from June to August and November to December with 80/3.5national and 85/4 spot.RationaleSocial couponing is a pretty new category and while Groupon was the pioneer in theindustry, it is still relatively new and unused by many people. There are many incomingthreats and because people do no know much about the category, there is currently littlebrand loyalty.Because of this lack of establishment and loyalty, Groupon needs higher reach andfrequency to meet its marketing needs. All of the months will experience a base of 70/3.5 R/F,with June to August and November to December experiencing increased goals becauseof the spikes in Groupon usage during the summer month and the holidays. Internet will beused to supplement low R/F months.Ostrow Model+.0 +.5 -.2 = +.3 + 3.0 Benchmark = 3.3 estimated frequencySee next page for summary Objectives, Strategies & Rationales: Reach & Frequency 30
  32. 32. Ostrow Model: Groupon OPart I: Marketing Factors That Affect Frequency ParEstablished brand? (No, not yet because it has only been around for three years) +.1High market share? (Yes, leader in this new category) -.2Dominant brand? (Yes, but incoming threats) -.2High brand loyalty (No, people are just learning about it) +.1Long purchase cycle (No, daily nature but may not purchase daily) +.1Product used occasionally? (Yes, used daily but not bought daily) -.1Need to beat competition? (Yes, incoming threats from competitors) +.1Advertising to older consumers/children? (No, women 25-44) +.1 .0Part II: Copy Factors That Affect FrequencySimple Copy? (No, need to explain product) +.2Copy more unique than competition? (No, all need complex copy) +.1Continuing campaign? (No, new campaign) +.2Product sell copy? (No, more of an image sell for the company) +.1Single kind of message? (Yes, single kind of message) -.1To avoid wear out: new messages? (Yes, new strategy) -.1Larger ad units? (No, medium ads units) +.1 +.5Part III: Media Factors That Affect FrequencyLower ad clutter? (Yes, because category barely advertising) -.2Compatible editorial? (Yes, especially with Internet) -.1Attentiveness high? (Yes, medium involvement product category) -.1Continuous advertising? (No, limited budget requires flighting) +.2Few media used? (No, moderate media mix) +.1Opportunities for media repetition? (Yes, high media repetition) -.1 -.2.0 +.5 -.2 = +.3 + 3.0 Benchmark = 3.3 estimated frequency Objectives, Strategies & Rationales: Reach & Frequency 31
  33. 33. Media BudgetObjective86.5% of the media budget will be spent on national media and 13.5% will be allocated tospot media in seven markets during the months of June to May.StrategyInternet will run every month with other media dispersed throughout.Promotion Months:Restaurant Week Sponsorships: San Francisco, CA in June New York, NY in July Boston, MA in August Los Angeles, CA in January Washington, DC in January Chicago, IL in February Atlanta, GA in MayConcert Promotions: June, July, and August National Media $ Amount National % Cumulative %Net TV- Early Morning $1,065,400 6.2% 5.3%Net Cable- Prime $4,714,300 27.3% 23.6%Net Cable- Late Fringe $3,566,200 20.6% 17.8%Magazines- Women $3,152,200 18.2% 15.8%Internet- Keyword/Search $320,000 1.8% 1.6%Internet- Targeted Sites $4,380,000 25.3% 21.9%Contingency $100,000 0.6% 0.5%National Total $17,298,100 100% 86.5%Spot Media $ Amount Spot % Cumulative %Spot Radio- Morning Drive $621,700 36.8% 3.1.%Spot Radio- Evening Drive $516,100 30.6% 2.6%Outdoor $350,000 20.7% 1.8%Contingency $200,000 11.8% 1.0%Spot Total $1,687,800 100% 8.5%National + Spot Total $18,985,900Spot Promotions $ Amount Spot % Cumulative %Promotion 1- Restaurant Week $252,000 25.2% 1.3%Promotion 2- Concert Promo $748,000 74.8% 3.7%Promotion Total $1,000,000 100% 5.0%Cumulative Total $19,985,900 Objectives, Strategies & Rationales: Media Budget 32
  34. 34. RationaleThe majority of the money is spent on national media because Groupon is used nationallyand this will give Groupon the reach and frequency necessary to increase awareness andestablish them as the leader within the daily deals industry amongst both consumers andretailers. Reach is important since Groupon has never done a campaign of this breadthbefore.Most of the budget is dedicated to Internet (23.5%) and cable television (41.4%). This isbecause Internet is prominent in the target’s lives and television is a source of informationand entertainment for the audience, according to the PMN grids. Another large percent(15.8%) of the budget is spent on women’s magazines because magazines index high forthe target and according to the PMN grids, many women read magazines after work and onthe weekends.Figure 37: Spot Budget Allocations by Market Market Total of U.S. Population Total of Spot Population Spot Allocation New York, NY 6.5% 28.4% $763,335.20 Los Angeles, CA 5.0% 21.8% $585,940.40 Chicago, IL 3.1% 13.5% $362,853.00 San Francisco, CA 2.1% 9.2% $247,277.60 Boston, MA 2.1% 9.2% $247,277.60 Washington, DC 2.1% 9.2% $247,277.60 Atlanta, GA 2.0% 8.7% $233,838.60 Total 22.9% 100% $2,687,800.00Spot media receive 13.5% of the media budget, including the costs of spot promotions.This figure is good because these seven spot markets account for almost 23% of the totalU.S. population. These markets are in the Top 50 for households buying products online,they have large percentages of the target audience as well as positive attitudes towardscoupons and online shopping. Most of the spot market budget is spent on radio and on thespot promotions. The rest of it is spent on outdoor in transit.Groupon will start its campaign in June and end in May. Internet will run all 12 monthswith television, women’s magazines, spot radio and outdoor flighting throughout the year.The emphasis is on the summer months and the holiday season because of the spike inGroupon usage. Objectives, Strategies & Rationales: Media Budget 33
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  36. 36. Objectives, Strategies & Rationales: Media Budget 35
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  38. 38. GeographyObjectiveThe media buys for Groupon will be national in scope, plus a heavy-up in seven spotmarkets across the country with large populations of the target and high indices for doingmore shopping/Internet than before and that coupons draw them to places they do notshop.StrategyGeography is important to the campaign because while Groupon is a mostly nationalbrand, the deals are entirely local. It is important to focus on certain spot markets to meetGroupon’s objectives. Spot markets were selected based on the population’s Internetand shopping behaviors, the percent population of the target and their attitudes towardscoupons. These are also large cities with many retailers who are potential participants forsupplying Groupon deals. This offensive strategy to target cities with favorable attitudestoward coupons and online shopping will help Groupon increase awareness and establishitself as the leader within the daily deals industry. The selected spot markets make up 22.9%of the U.S. and will receive 13.5% of the budget.RationaleFigure 38: Spot Markets (Simmons, 2009) Doing more shopping/ Coupons draw them to Markets Internet than before places they don’t shop Weighted Indices Washington, DC 137 127 132 San Francisco, CA 147 96 122 Boston, MA 121 114 118 New York, NY 108 109 109 Los Angeles, CA 108 106 107 Atlanta, GA 108 106 107 Chicago, IL 98 108 103The media plan is national plus spot heavy-up because Groupon is located in over150 markets in the U.S., which is on a national scale. The industry is online based, so thecompetitors are everywhere as well, therefore Groupon needs to advertise nationally. Theplan hopes to achieve the greatest reach possible by doing national advertising, but placeextra focus on cities where Groupon is used and where there are active users. Targetingthese markets can keep Groupon as the leader in the industry. Objectives, Strategies & Rationales: Geography 37
  39. 39. Scheduling/TimingObjectiveNationally and spot, the highest R/F will be achieved in the launch months of June toAugust and again in November to December. Network television, cable television, women’smagazines, and Internet, both search and targeted sites, will be used for all months atvarying buys. Spot radio and outdoor will be used in June, July, August, November andDecember.StrategyThe Groupon campaign will take place from June to May. There will be extra emphasis thefirst three months of the campaign to create a strong presence early and then again duringthe holiday season when people shop more and buy gifts.Media spending will go down after the first quarter until November and December for theholiday season, where both national and spot will run heavily. There will be a lull again forJanuary and February. Spending will then continue at a higher rate for the last three monthsof the campaign on a national level.RationaleThe campaign tries to advertise heaviest when Groupon traffic and online shopping is atits highest, which is during the summer and the holiday season. The campaign starts in thesummer to spread brand awareness and recognition before competitors start advertisingmore heavily and create clutter.The Restaurant Week sponsorship highlights the brand name in the spot markets andconnects with consumers in a relevant, but unintrusive environment. It also keeps the brandgoing strong throughout the year because the spot markets all have different weeks forRestaurant Week. The concert promotion also reaches the target in a relevant and engagingsetting in months where traffic is higher. Objectives, Strategies & Rationales: Scheduling/Timing 38
  40. 40. Sales PromotionsObjectiveTwo promotions will be used to increase brand awareness, encourage new users to sign upfor Groupon, and establish Groupon as the leader within the daily deals industry amongstboth consumers and potential retailers.Promotion One: Restaurant Week SponsorshipObjectiveThe promotion, which runs in different months in all of the spot markets, will encourage newusers to sign up and retailers to run with Groupon.StrategyGroupon will sponsor Restaurant Week in all seven spot markets. The sponsorship will be atthe highest level of promotion, which will include Groupon’s logo: • Incorporated into the Resaurant Week logo • On the website • On in-store merchandising materials displayed in participating restaurant partners • On restaurant recruitment packets, e-blasts, and communication pieces • On print advertising • On Restaurant Week e-blasts • On radio advertising • In television advertising • On press materials • On media sponsor partner web sites, affiliate e-blasts, event listings, and banner adsThe sponsorship will also include a top of the page Leaderboard Banner Advertisement onthe website. There is also the opportunity to host the kick-off event for the week and to havedinner for ten at the restaurant of Groupon’s choice during the week. Groupon will alsohave banner ads on the blog and additional opportunities for cross-promotional programdevelopment implementation with participating restaurants. Lastly, Groupon will get acontact list of participating restaurants, the opportunity to present to restaurants at Kick OffEvent and the opportunity to add questions to the post event survey (Arizona RestaurantWeek, 2009).The sponsorships will run as follows: San Francisco, CA in June New York, NY in July Atlanta, GA in July Boston, MA in August Los Angeles, CA in January Washington, DC in January Chicago, IL in February Objectives, Strategies & Rationales: Sales Promotions 39
  41. 41. The costs for the promotions are based off of numbers from the Phoenix, Arizona restaurantweek, which is not one of the spot markets, but is what the costs can be based off of. Basedon the size of Phoenix compared to the selected spot markets, the following prices weredetermined:Figure 39: Promotion One Costs Spot Market *Cost $ New York, NY $120,000 Los Angeles, CA $60,000 Chicago, IL $40,000 San Francisco, CA $10,000 Boston, MA $8,000 Washington, DC $8,000 Atlanta, GA $6,000 Total $252,000*The sponsorship in Phoenix costs $25,000 and the population of Phoenix is approximately1.7 million. The prices are based on the ratio of the size of the city and the cost. So NewYork City has 8.2 million people, divided by 1.7, then multiplied by $25,000, which equalsapproximately $120,000 (8.2 million / 1.7 million x $25,000 = $120,000).RationaleThe reasoning behind sponsoringRestaurant Week is becausethe restaurant category is alarge category on Groupon. Thispromotion will reach both retailersand potential Groupon users in arelevant setting. It will reach themthrough multiple vehicles withoutbeing intrusive. Being able toexperience a restaurant that couldpotentially be featured on Grouponis important for individuals to seewhat kind of offers Groupon canhave. Also, Restaurant Week is anestablished event in many cities,so Groupon will be tied in with aprestigious event.Restaurant Week also providessocializing opportunities like goingout to eat with friends. It is alsobased around discounts, which isthe perfect context for Groupon. Objectives, Strategies & Rationales: Sales Promotions 40
  42. 42. Promotion Two: Concert Engagement PromotionObjectiveThe promotion, which runs in June, July and August in all of the spot markets, will encourageindividuals to engage with Groupon in a social setting in order to increase awareness ofGroupon and establish them as the leader within the daily deals industry.StrategyGroupon will be featured on the jumbotron in between sets at a concert in each of the spotmarkets. The screen will feature three local retailers and an announcement will be madeto explain what Groupon is, how to sign up, the offers it has, and will then ask the audienceto vote for the retailer up on the screen they would most like to get a deal from. The first 50people to respond will win the deal for free, courtesy of Groupon.Figure 40: Promotion Two Costs Spot Market Cost $ New York, NY $120,000 Los Angeles, CA $110,000 Chicago, IL $110,000 San Francisco, CA $100,000 Boston, MA $100,000 Washington, DC $100,000 Atlanta, GA $100,000 Free Deal Giveaway $8,000 Total $748,000RationaleThe target audience likes to enjoy life and music is a part of that. They have attendedconcerts in the last 12 months (Index 120) and listen to music on the radio and online.Groupon is about engaging with the consumer in their city. Doing a social contest at aconcert will engage the consumer in their own location. They can choose where they wantthe deal by voting and they can see the social aspects of Groupon right before their eyes.This integrates well with the rest of the media plan because it involves being technologicallysavvy just like using Groupon. Objectives, Strategies & Rationales: Sales Promotions 41
  43. 43. Works Cited2010 Census Data Compilation; compiled by Danilo Trisi.Bensinger, G. (2011, May 2). AT&T Takes on Groupon With $10 Promotion for Daily Deal Site. Retrieved 2011, from Bloomberg: http://www.bloomberg.com/news/print/2011-05-02/ at-t-will-take-on-groupon-with-10-promotion-at-daily-discount-deal-site.html00000BlogHer. (2009). Partner With the Most Influential, Social and Info-Savvy Women Online. (C. M. iVillage, Producer) Retrieved from BlogHer: Life well said: BH_Q12012_v1low_adkit.pdfBoulton. (2011, April 30). Facebook Deals Beats Google Offers to Groupon’s Game. Retrieved 2011, from Eweek: http://www.eweek.com/c/a/Messaging-and-Collaboration/ Facebook-Deals-Beats-Google-Offers-to-Groupons-Game-430016/1/eMarketer. (2011, April 12). Subscribers Eager to Open Daily Deal Emails. Retrieved 2011, from eMarketer Digital Intelligence: http://www.emarketer.com/Articles/Print.aspx?1008332Deatsch, K. (2011, March). Local Hero. Internet Retailer , pp. 24-29.Dholakia, U. (2010). How effective are groupon promotions of businesses? Rice University, Jones Graduate School of Bussiness.Galante, J. (2010, October 14). Groupon Said to Talk to PayPal About Increasing Payment Options. Retrieved 2011, from Bloomberg: http://www.bloomberg.com/news/ print/2010-10-14/groupon-said-talking-with-paypal-on-adding-payment-options- curbing-fraud.htmlGriner, D. (2011, March 24). Did Groupon’s ads cause revenues to tank? Retrieved 2011, from Adweek: http://www.adweek.com/adfreak/did-groupons-ads-cause-revenues- tank-126903Groupon Works. (2011). www.Groupon.comHampp, A. (2011, April 10). Bravo’s ‘Buzz Marketing’ Keeps Viewers Tuned In. Retrieved 2011, from Advertising Age: http://adage.com/print/226898LivingSocial. (2011). www.livingsocial.comMagazine Publishers of America. (2010). Magazine Handbook: Engagement to Action. MPA. Works Cited 42
  44. 44. Mintel. (2011). Marketing to Gen X-US-April 2011. Mintel Oxygen.Nielsen Wire. (2011, April 26). Deal Me In: Behind the Bargain-Hunting Audiences of Local Deal Sites. Retrieved 2011, from Nielsen : http://blog.nielsen.com/nielsenwire/online_ mobile/deal-me-in-the-bargain-hunting-audiences-of-local-deal-sites/print/Online MBA. (2011). The Business Notebook. Retrieved 2011, from Deals, Deals, Deals...and More Deals: http://www.onlinemba.com/blog/deals-deals-deals/Patel, K. (2011, April 22). Google Finally Hits Market With Own Groupon Clone: Offers. Retrieved 2011, from Advertising Age: http://adage.com/print/227160Pogue, D. (2011, February 2011). Psyched to Buy, in Groups. Retrieved 2011, from The New York Times: http://www.nytimes.com/2011/02/10/technology/personaltech/10pogue. html?_r=1Rueter, T. (2011, April 19). Consumers search high and low for online coupons. Retrieved 2011, from Internet Retailer: http://www.internetretailer.com/2011/04/19/consumers-search- high-and-low-couponsSiwicki, B. (2011, March 3). 73% of broadband users are on Facebook. Retrieved 2011, from Internet Retailer: http://www.internetretailer.com/2011/03/03/73-broadband-users-are- facebookSlutsky, I. (2011, April 26). Facebook Launches “Deals on Facebook,” Promises a More Social Experience than Facebook. Retrieved 2011, from Advertising Age: http://adage.com/ print/227218Stone, B., & MacMillan, D. (2011, March 17). Are Four Words Worth $25 Billion for Groupon? Retrieved 2011, from Bloomberg Business Week: http://www.businessweek.com/ magazine/content/11_13/b4221070014682.htmTNS- Kantar Media Intelligence. (2010). Ad$ Summary Multi-Media Service January- December 2009. Kantar Media. Magazine Publishers of America.Top Market Data. (2010).Quantcast (2011). www.quantcast.comVALS. (2011). Strategic Business Insights. Works Cited 43

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