"Buy the Way…" Insights on Integrated Marketing Communication

On January 21^st, Google announced that it is preparing to launch Google Offers, a competitor to group-buying giant Groupon¹. A few months earlier, Google tried to buy Groupon for more than 5 billion dollars. Groupon rejected Google’s offer and is preparing for an initial public offering that will put the company at an estimated $15 billion in value². On a related note, Groupon’s main competitor LivingSocial has recently acquired a $175 million dollar investment from Amazon.com.

What has Groupon done that has Google scrambling to imitate it? Groupon has taken the old age concept of discounts and coupons, and combined it with a new age concept – social technology. Groupon invites local merchants to launch a coupon that Groupon sends to all its customers in that localized region. Each “Groupon” deal has a minimum sign-up number it has to reach: if a number of people sign up for the deal, the discount becomes available to all Groupon members. However, if the minimum sign-up number is not met, nobody gets the deal of the day. Users are only charged when they sign up and if the minimum sign-up number is met. Groupon sign-ups not only give the merchants a guaranteed customer base, but also give their brands exposure to the public.

The idea behind the process described above is that Groupon reduces the risk for merchants and creates a win-win situation for both the sellers and the buyers. The predetermined minimum of sign-ups allows for the merchants to make up the lost revenue from the discounts through the additional volume from Groupon’s massive subscriber base. Due to Groupon’s 33 million worldwide subscriber bases, merchants may also use the process as a promotional platform for their own products and brand. Groupon deals encourage consumers to try out new products with the great discounts Groupon provides.

We live in a new and exciting world in which old concepts such as mail, media, and networking have been transformed by technology. The coupon business, on the other hand, has managed to stay well-saturated and unchanged for decades. The success of group buying companies like Groupon and LivingSocial shows that the coupon business too can be digitalized and revolutionized with social technology. Lastly, with the help of technologies, more local businesses could be introduced to the general public by advertising their products through Groupon.

References:

http://mashable.com/2011/01/20/google-offers/

http://mashable.com/2011/01/13/groupon-prepares-for-spring-2011-ipo-at-a-15b-valuation-report/

What was once a far-off idea that existed only in the fantastic worlds of sci-fi classics such as Star Trek, Star Wars and the like, is now a reality and used to push marketing promotions among the young and tech-savvy generation!

http://mashable.com/2011/01/15/goldrun/

Augmented reality has now leapt off the pages of our imagination and is being integrated into innovative promotional ideas that blur the line the between reality and virtual reality. GoldRun is a new app using augmented reality to enhance and add another level of interactivity to existing location-based apps such as Foursquare and scvngr. In the article’s case study, H&M utilized GoldRun to initiate a virtual scavenger hunt. Participants were encouraged to collect virtual H&M products by snapping a picture of the item outside any of its 10 Manhattan locations.

Such applications and platforms really emphasizes the mobility of today’s technology and how we are increasingly dependent or ‘encouraged’ to interact with the real world through the lens of our gadgets. Other social media based marketing platforms such as PromoJam or Wildfire (which focus on Twitter and Facebook based promotions), operate in a similar manner, getting consumers to participate and interact with the brand and with one another through a digital device.

With the rise of technology and the ubiquity of social media tools, marketing is no longer about utilizing ‘old’ media outlets such as advertising to influence its consumers. It has become far more interactive and experiential. Consumers no longer wish to be treated as passive recipients but expect to be involved in some shape or form with the brand’s evolution. As we become more dependent on smart phone technologies, how then will applications and tools evolve to get us even more entrenched into the virtual worlds they present? What then happens to the ‘real world’?