Groupon Media Plan

Jen Brotman
Julia Mazerov
ADV 500 Falkner
Media Plan
May 9, 2011

Table of Contents

Executive Summary........................................................................................................................2
Situation 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........................................................................................................................... 14
Creative Brief.................................................................................................................................16
Objectives, Strategies & Rationales..........................................................................................17
TargetAudience...................................................................................................................17
Target Media Mix................................................................................................................ 21
Reach/Frequency................................................................................................................30
Media Budget......................................................................................................................32
Geography...........................................................................................................................37
Scheduling/Timing..............................................................................................................38
Sales Promotions..................................................................................................................39
Works Cited...................................................................................................................................42
Appendix.......................................................................................................................................44

Table of Contents 1

Executive Summary

Problem
There are few barriers to enter the daily deals industry, and the category is becoming increasingly
crowded. Though Groupon is currently the leader in social couponing, rivals such as LivingSocial,
Facebook, and Google threaten its rank within the market.

Solution
Establish Groupon as the leader within the industry through a 12 month advertising campaign
that will generate mass awareness and increase new users by 20%. The campaign will highlight
Groupon’s offerings that differentiate it from other competitors, such as its social component.

Target Audience
Groupon’s target audience consists of white females ages 25-44 with minimum household incomes
of $50,000. These individuals are employed, lead active lifestyles, and enjoy partaking in new
experiences with family and friends.

Budget
The 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 target
audience and their attitudes towards coupons and online shopping.

Reach/Frequency
This campaign will maintain a minimum R/F of 75/3. Maximum R/F will be achieved in launch
months (June, July and August) as well as during the holiday season (November and December)
with 80/3.5 national and 85/4 spot.

Scheduling
The schedule begins in June and flights until May. Internet will run continuously throughout the year
with bursts of magazine, network and cable television during select months. Media will run in spot
during June, July, August, November and December.

Media Mix
The campaign schedule will use early morning network news, primetime and late-fringe cable
television, targeted Internet advertising, keyword search, and women’s magazines to reach
audiences on a national scale. Morning and evening drive spot radio and outdoor transit
advertisements will run in the seven spot markets.

Promotions
Two 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 through
its relevancy to the event. Groupon will also interact with consumers through a concert engagement
promotion, where it will reward consumers who participate in a voting contest.

Executive Summary 2

Situation Analysis

Marketing Objectives
Product
Groupon Incorporated, launched in November 2008 by Andrew Mason, is the world’s largest
provider of online daily coupons. The organization presents deal-of-the-day discounts to
over 60 million subscribers worldwide. Groupon offers coupons primarily within the health,
fitness, and beauty markets, and these daily coupons are sent to Groupon subscribers via
e-mail. Individual companies set the minimum number of vouchers that must be purchased
in order for each deal to take effect, and pay nothing if not enough subscribers sign up for
the offer. Also, deals are available for a limited time only, typically one to three days. If the
minimum threshold is met, Groupon then takes 40-50% of profits from the merchant. This
business concept not only imbues Groupon with a social element, but also reduces risk for
retailers (Deatsch, Internet Retailer, 2011).

Price
It is free to sign up for Groupon. The price of purchasing a Groupon offer will vary depending
on the product. Groupon typically offers 50-90% off discounts on a variety of services, such
as 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)
Place
Groupon is an online service available in
over 150 markets in the United States (Pogue,
The New York Times, 2011). Subscribers can
purchase deals directly from their smartphones
or from Groupon’s website.

Promotion
As of now, Groupon is not heavily promoted
in traditional media. However, the corporation
leverages social media tools such as Facebook,
Twitter, and an online blog to share information
about contests, new products, and pertinent
industry information with consumers. Groupon
also places banner ads on targeted websites.

Situation Analysis 3

Past Promotion
Groupon reportedly spent $3 million to run a 30-second commercial during Superbowl
XLV. The commercial was launched as part of a charitable effort to raise funds for several
national non-profit organizations, but Groupon’s misguided first attempt at television
advertising blatantly missed the mark. The ad, featuring actor Timothy Hutton, received
harsh 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 joke
didn’t come through,” explains CEO Andrew Mason, who launched the ad in collaboration
with Colorado agency Crispin Porter & Bogusky (Patel, Advertising Age, 2011). Mason
apologized for the misstep and pulled the ad on February 10, 2011, five days after it initially
aired (MFP).

Despite the backlash, Groupon is said to have gained subscribers since the ad’s debut and
Greenpeace raised $100,000 in donations within 48 hours of the Superbowl (Griner, Adweek,
2011).

Market Size
Groupon has pioneered the daily deals industry, which is now valued at $1.25 billion and
is expected to grow to $3.93 billion in 2015, according to a projection from BIA/Kelsey in
March (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 the
iPhone, Groupon easily attracts consumers on-the-go looking for coupons who can share
bargains easily with friends (Stone).

The daily deals industry continues to increase in size and value as more startups begin
to exploit the opportunity that Groupon discovered first. The scope and significance of
the market changes daily as competition swells, new technologies develop, and market
research increases.

Figures 2 & 3: Growth of Groupon-Like Daily Deal Services (Yipit, 2011) & US Daily Deal Site Revenues (eMarketer, 2011)


Competitors

LivingSocial
LivingSocial, 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 purchases
a deal, he or she can share it with their friends and receive the deal for free if three friends
purchase it as well. LivingSocial aims to encourage “experiences that bring an adventurous,
loyal new following to local businesses” (LivingSocial, 2011).

Google Offers
After a failed attempted at buying Groupon, Google has recently piloted a platform called
Google Offers, which currently serves only five markets. Offers is part of an ongoing effort
at Google to make new services that give consumers great deals while helping connect
businesses with customers in new ways (Patel).

The service will augment the already existing Google Boost and Google Places, which
collaboratively connect consumers with millions of local businesses. With Google Boost,
businesses owners can easily create a profile for their business and boost search results
with photos, video, and other rich media. Google Offers will leverage this extensive directory
to 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 aspect
of deal-sharing that customers have come to
enjoy. “There’s no big social tie to keep users
from treating it like a network instead of another
What makes Google such a
“
potentially formidable rival is its
ability to meld local offers with
search feature users use and leave,” says Clint its dominant search engine.
Boulton of Enterprise Technology (Boulton). Deatsch


Deals on Facebook
Facebook has launched a test of its Deals on Facebook in six U.S. cities. The service aims to
differentiate from similar platforms by embracing the social aspect of deal-sharing and focus
more on discounted concerts, wine-tastings, and other experiences that are enjoyed with
friends and family. The deals will include additional discounts if the user invites friends to join
in and purchase the offer (Boulton).

Deals on Facebook also eliminates many of the barriers that customers find frustrating about
Groupon. Family and friends are already on Facebook and would not need to sign up for an
extra service. Sharing, posting, and inviting is also easier on Facebook (Slutsky, Advertising
Age, 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


Incoming Threats
Incoming Competitors
Incoming social coupon sites pose the greatest threat to Groupon. There are very few
barriers 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 of
having other options (Stone).

Flaws in Business Model
In addition, the question of whether Groupon promotions are truly profitable for businesses
is still debated. In a September 2010 study of 150 businesses, 32% of respondents indicated
that 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 temporary
spike 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 floods
of new business when featured as a daily deal, and others are discouraged by a lack
of consumer interest. “Daily-deal sites will suffer if businesses stop participating in deals
because they can’t find a way to satisfy all customers,” says research analyst Sucharita
Malpuru, “if these merchants come to realize these customers are not coming back…the
whole model falls apart”(Galante, Bloomberg, 2011). Flaws in Groupon’s business model
will certainly arise as more research on the industry surfaces, forcing it to adjust to remain
sustainable.

Market Share Figure 5: Membership Base (Online MBA)

Membership Base (Estimated 000)
Membership Base
Groupon currently has more then
LivingSocial
70 million users, as compared to 3%
LivingSocial’s approximately 28 million. Groupon
Members are the most important aspect 8%
of these social couponing websites
because without users, they would not
exist. It is also estimated that Google Google Offers
Offers will gain 150 million members and 18%
Deals on Facebook will gain 600 million.
This will significantly skew Groupon’s
share of the market (Online MBA, 2011). Facebook
Deals
71%


Revenue
In 2010 Groupon reported $760 million in revenue (Patel). Groupon makes approximately
$100 million a month, while LivingSocial makes approximately $50 million a month. There is
not yet data reporting Google Offers’ and Deals on Facebook’s revenue (Online MBA).
Figure 6: Valuation (Online MBA)
Valuation of Company
Groupon 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 the
ground, they are estimated to be valued at
$172 and $75 billion, respectively (Online Facebook
MBA). Deals
28%
Markets
Groupon is located in over 565 markets
around the world. LivingSocial is located in
approximately 200 markets worldwide. As
Google Offers and Deals on Facebook are in
Google
their infancy, they are only located in 5 and 6
Offers
markets respectively (Online MBA). 65%

Awareness
Awareness of Groupon has increased
exponentially since its establishment, particularly in the past year. Groupon attracted 10
million unique visitors to its website in November 2010, up 54% from October, according to
comScore (Rueter, Internet Retailer, 2011). Since January 2011, there have been almost 15
million unique visitors to the site. Groupon also recently reported that it has a waiting list of
over 35,000 businesses wishing to be featured on the social promotion platform, though
the 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 Goals
The primary goal is to increase awareness of Groupon and establish it as the leader
within the daily deals industry amongst both consumers and potential retailers. Groupon’s
campaign aims to increase new users by 20% in the next 12 months (MFP).

Marketing Budget
Groupon will spend $20 million in this year’s campaign in an effort to increase brand
awareness 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 the
expectation of how customers expect to be communicated to by a company“ (Stone).
Groupon will effectively use its marketing budget in this campaign to creatively reach
consumers and achieve lasting brand loyalty.


Creative History
The idea for Groupon came to Pittsburgh-native Andrew Mason in 2008 by accident. While
pursuing a master’s degree in public policy at the University of Chicago, Mason created an
action network called The Point that allowed constituents to combine their voices and lobby
companies to make policy changes. The Point was hugely unsuccessful, but the idea of
creating 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 13
months. In just over two years, the company has jumped from 120 to 5,900 employees and
expanded from 30 to 550 markets (Stone).

The corporate culture at Groupon exhibits a comedic approach to discounting. The
company employs 70 comedy writers, and each daily deal comes with a whimsical
description of the service being offered.

“
Yet suprisingly, Groupon has yet to establish a
cohesive brand identity through advertising. A
highly targeted marketing strategy will be the key to
Groupon’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 deal

with a new installation called Groupon Now, which
will allow customers to enter their location into a
smartphone and immediately generate a list of
deals. The deals are not only available on that particular day, but at the specific time they
request the search. The software will allow merchants to draw customers to empty tables
during slow hours, and “embed Groupon further into the daily routines of consumers and
merchants” (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.


Target Audience
The 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 or
more (Groupon Works, 2011). Because there is such a broad range of subscribers, Groupon
must narrow its focus, using attitudes and psychographics to target those who are active
users 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 attitudes
are 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 97 102
Base: Adult Population

The 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 105
Base: White women 25-44 with a HHI of $50K+

The weight is distributed equally across the following attitudes: coupons draw me to stores I
do not shop, doing more shopping/Internet than before, I like to hear about products and
services by e-mail.

The VALS survey reports that Groupon’s target falls into the innovators and experiencers
categories.


Product Usage
People use Groupon for numerous reasons, which include using it as a guide to explore
the city or to find a good deal (Groupon Works, 2011). For subscribers, it is always a daily
interaction when the deals are received via e-mail. 60% of U.S. Internet users access daily
deals one or several times a day. They also forward the deals on to family and friends more
often than not (eMarketer, 2011).

Figures 9 & 10: Frequency with which US Internet Users Access/Forward Daily Deals


Geography
Groupon began in Chicago, Boston and New York City. It is now located in more than 150
markets in North America (MFP). Based on the cities with women 25-44 who are doing more
shopping/Internet than before and who agree that coupons draw them to stores they do
not 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 98 108 103

The weight is distributed equally across the two categories. These markets are also all
within the top 50 markets for online shopping (Top Market Data, 2010). Also, based on data
from the 2010 census, the target makes up 38.7% of the population 18 and over in these
seven selected markets. There are over 631,000 individuals in this group (Census, 2010). The
following two figures show the size of the market based on the target as compared to the
index 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 
20

Figure 13: Geography

Chicago
Boston
San Francisco
New York

Washington, DC

Atlanta
Los Angeles

Timing and Purchase Cycle
There is some seasonality regarding Groupon usage, with spikes during summer months
and during the holiday season (Quantcast, 2011). This is likely due to the nicer weather amd
people having more free time in the summer and then increased gift giving and bonus
spending during the end of the year. Groupon also has a short purchase cycle due to its
nature of sending out daily offers.

Figure 14: Groupon Visitors (Quantcast, 2011)


Media Mix
Groupon users are very active in multiple media. Based on the average index (weighted
equally across both age groups and both the first and second quintiles), the most receptive
media 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 75

Spending Figure 16: Spending by Media Type (TNS, 2009)
Due to the newness of the Spending by Media Type
category, there is a lack
5000 
of information available
4500 
on who is spending what.
4000 
LivingSocial is currently
advertising 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 advertising
online and on television.
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Figure 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% 


Competitive Media Mix

Figures 18 and 19 depict the media mix spending of the previously mentioned coupon
websites and their share of voice respectively. While these sites might not represent the most
relevant competition, they can give Groupon an idea of who is spending money where, how
much they are spending, and their share of voice. Because these coupon websites are not
spending nearly as much money as Groupon will be spending in this campaign and some
media are not even used, such as magazines, this leaves Groupon a lot of room to gain
significant 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%


Creative Brief

Client
Groupon

Target
A working woman who is making money to spend money. She is highly educated and
knows what she wants. She likes to treat herself and relax on the weekends. This woman
knows a good deal when she sees one and she likes to try new products or services. While
she spends a lot of time on the Internet, whether for work or entertainment, she also enjoys
socializing.

Challenge
To increase awareness and establish Groupon as the leader within the daily deals industry
among both consumers and potential retailers.

Objective
Increase new users by 20% in the next 12 months.

Proposition
Promote the exciting daily deals and benefits of using Groupon, creating a consumer desire
to purchase more Groupon deals.

Reason to Believe
Because of Groupon’s breadth of deals and significant discounts, Groupon has always
provided users with the deals they want, at the price they can afford. Groupon creates
a want among users to try new things and experience their cities. It satisfies the need to
partake in fun and exciting things, without spending too much money.

Mandatory Items
Logo, tagline, explanation of Groupon and examples of deals

Creative Brief 16

Objectives, Strategies &
Rationales

Target Audience
Objective
Aim advertising toward women 25-44 with disposable income to spend and the desire to use
coupons in order to create awareness and establish Groupon as the leader in the category.

Strategy
The target audience is determined by averaging several Simmons indices including: Like
to hear about products or services by e-mail, coupons draw them to places they do not
shop, and they always look out for special offers. The target audience fits the following
characteristics: Women 25-44 who are primarily white and are either married or single. They
have at least graduated college and are currently employed with a household income of
$50,000 or more.

Rationale
Although many people like using coupons and appreciate a good deal, these women are
more likely to use Groupon and actively purchase the daily deals. They index higher than
their male counterparts with attitudes regarding online coupons and deals.

Women are the target because they are they majority of subscribers on Groupon, making
up 77% of users (Groupon Works). They are more actively on the look out for special offers
and want to hear about products and services through e-mail.

This age range is appropriate for Groupon because they are technologically savvy
and have grown up with the Internet and broadband for the most part. They have also
experienced tough economic times, so they appreciate a good deal. Price promotions,
coupons, and localized services like Groupon are important tools for marketers working to
attract and retain Gen X customers, which are part of the target. Most Gen Xers also feel a
need to balance life and work, so they enjoy social experiences and look for deals to not
break the bank (Mintel, 2011).

Their education, employment and household income go hand in hand. Higher education
leads to higher pay, which leads to more disposable income to spend on services such as
Groupon.

Objectives, Strategies & Rationales: Target Audience 17

This age Average Annual Expenditures by Age (Mintel, 2010) 
group also
spends more $8,000  
on average $7,000  
than the rest
of consumers $6,000  
in many of the $5,000  
categories
of deals that $4,000  
Groupon All consumer units 
$3,000  
offers. These Target consumer 
categories $2,000  
include food, $1,000  
alcoholic
beverages, $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 equally
important to the active user on Groupon. If users did not like to hear about products or
services and were not looking out for special offers, then there were would be no point in
signing up for Groupon. Even once they have signed up and coupons still did not entice
them to actually purchase the deals, then again, Groupon would not be the service for
them.

While some of the indices are not that high, such as race, the size of that population was
more important. Also, since Groupon is a relatively national product that is based online, it
can be accessed by everyone, therefore factors such as race and marital status are less
important. It is more important that they are online, looking for deals, and that they have the
money 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


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 105

The weight is distributed equally across the following attitudes: coupons draw me to stores
I do not shop, doing more shopping/Internet than before, like to hear about products and
services by e-mail.

VALS Survey
The target audience falls into the innovators and experiencers categories. Innovators are
successful people with abundant resources. They are the most receptive to new ideas and
technologies. Innovators are very active consumers, and their purchases reflect cultivated
tastes for upscale, niche products and services (VALS, 2011).

Image is also important to innovators as an
expression of their taste, independence, and
personality. Their lives are characterized by
variety and their possessions and recreation
reflect a cultivated taste for the finer things in
life (VALS).

Experiencers become enthusiastic about new
possibilities. They seek variety and excitement.
Their energy finds an outlet in exercise, sports,
outdoor recreation, and social activities, all
of which Groupon caters to with their deals.
Experiencers are avid consumers and spend a
comparatively high proportion of their income
on entertainment and socializing (VALS).


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 style
home within the sorority house. She hosts dinners and wine nights, while going out to eat
other times. She and her friends go to the mall and the movies some weekends, while other
weekends are spent going to sporting events at Syracuse University or barbecues when the
weather 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 quick
breakfast and then watches the news. She checks her e-mail and heads out the door. Kelly
listens to the radio, usually 107.9 FM on her way to work and stays connected all day via the
Internet and her Blackberry. She listens to Pandora while she works and then listens to the
radio again on her way home.

During dinner and then after, when Kelly is by herself, she watches TV. She usually puts on the
USA Network and watches reruns until she goes to bed around 10 p.m.


Target Media Mix
Objective
Use a combination of Internet, women’s magazines, network and cable television to reach
the target on a national scale flighting from June to May. During the summer months
and the holiday season, sales promotions, outdoor, and spot radio will provide additional
emphasis in the seven spot markets.

Strategy

National
June 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.

Spot
Seven 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.

Rationale
Media quintiles from MRI+ are used to determine the targeted media mix. Quintiles I and
II are averaged for women 25-44 to calculate the overall index for each media type. The
highest-ranking media quintiles for women 25-44 mirror current media trends, which imply
increased importance of online social media and place-based advertising (MFP).

Objectives, Strategies & Rationales: Target Media Mix 21

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 75

All other indices are gathered from Simmons 2009 data. As Simmons does not provide
specific information on Groupon, the target: white, employed females 25-44 with a minimum
HHI 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-mail

These opinions were chosen based on their relevancy to Groupon’s daily, online coupon
service format, through which subscribers receive discounts via e-mail.

National

Network Television (Early Morning News)

Television ranked second to last in heavy use amongst the target, with an overall index of
76. However, PMN grids express that approximately 42% of the target watches early morning
news 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) 111
Base: White women 25-44 with a HHI of $50K+, run against previous attitudes

NBC’s “Today Show” and ABC’s “Good Morning America” were especially popular among the
target, indexing at 117 and 111, respectively. Morning news provides an ideal opportunity
for Groupon to engage with its intended audience at the beginning of the day. A reminder
about Groupon will make the product top-of-mind for consumers as they begin their
morning commute—a time when they’ll have a chance to check out the daily deal sent
to their cell phone that day or an opportunity to look into the service as they wait for their
transportation. Network TV also has high reach, which is helpful.


Network Cable Television: (Primetime and Late Fringe)
Network cable television will be used to reach the target throughout the 12 month
campaign. Basic national cable has an overall penetration of 90% (MFP). This extensive
reach will help spread brand awareness for Groupon through specialized cable
programming that attracts audiences with a diverse range of interests.

PMN grids suggest that women 25-44 are inclined to watch television during primetime and
late-fringe day parts, particularly for entertainment purposes. The target indexes above
average 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 food
industries for which Groupon offers discounts. In fact, Bravo offered Groupon discounts at
each of the chef’s 12 restaurants this past summer, which allowed audiences to experience
Top Chef meals at a significantly discounted price (Hampp, Advertising Age, 2011). This
social promotion creatively engaged consumers outside of the home and elevated brand
value 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 111

Though media quintiles indicate relatively low use of television amongst the target, its
potential for widespread reach cannot be ignored. Early morning news programming
provides an ideal moment for Groupon to connect with its audience before ad clutter
becomes a concern, and primetime and late fringe cable television will reach an amount of
consumers unattainable by any other medium.

Internet
In 2011, the Internet is expected to enjoy the highest growth of all media (MFP). As Groupon
is an online service, online advertising will provide click-through capability directly to its
homepage and drive new user subscriptions more effectively than other mediums. The
Internet already exists as the go-to medium for couponing. According to a survey of over
1,000 broadband Internet users, 74% of consumers search multiple online coupon sources
each week, and 25% spend up to an hour shopping for the best online discount deals
during this time period (Reuter).

In addition, media quintiles indicate that women 25-44 are more active on the Internet than
any other media type, with an average index of 126 for the top two quintiles. PMN grids
demonstrate heavy use of the Internet among the target during all hours of the day for
both entertainment and information purposes. A Groupon ad might catch the attention of
someone on their lunch break surfing the web for something fun to do that evening, or after
they get home from work and are seeking some inexpensive weekend ideas.


The Internet provides numerous opportunities for Groupon to actively engage with
consumers 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 the
mentioned ad types leading to a purchase either often or very often is significantly above
average:

Figure 28: Internet Ad Type Indices (Simmons, 2009)
Ad Type Index
Banner Ads 196
Keyword Search 192
Full-Motion Video Ads 185

The 12 month campaign will allocate a portion of the media budget towards search in
order to capture the 81% of women using broadband who claim to search multiple sources
for coupons each week (Reuter). Groupon will purchase the following keywords in order to
cover 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 Appendix

Groupon will purchase the following keywords in September, October, January, and February
to 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


The campaign will also include banner and rich media advertisements on targeted sites.
Simmons data indicates that the target indexes significantly above average for online
activities such as using dating services, blogging, watching videos, and listening to Internet
radio.

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 132

According to a Nielsen Wire study, the number of American users frequenting online video
destinations has increased by 339% since 2003, and time spent on video sites has climbed
2,000% during the same period (Nielsen Wire, 2011 ). Media trends indicate that Internet
usage amongst the target will only continue to increase as more channels for online social
connectivity 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 to
social 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, and
Tripadvisor.com in order to engage with the target within its preferred online platforms. Data
from Quantcast provides indices, reach, and % coverage of white women 25-44 with a
minimum 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 radio
during multiple day parts.
**Specific Quantcast data relative to the target is unavailable for Blogher, but the site has extensive reach to 20.5 million
unique users each month. 96% of these individuals are female, and 68% are between the ages of 25 and 41, according to
data compiled by the blog (Blogher, 2011).


The Internet is a crucial media outlet through which to reach consumers because it is the
only platform on which the target is actively seeking product information. Effective and
highly targeted Internet advertising will allow Groupon to remain as the frontrunner within the
social couponing competitive landscape.

Magazines
Full page and half page four color ads will be placed in five women’s magazines to spread
brand awareness throughout the campaign. Magazines rank third for heavy use among
women 25-44, with an average index of 110. According to the PMN grids, the target spends
the most time reading magazines in the late evening or before bed on weekdays, and
between mid morning and mid afternoon hours on the weekends.

The target is particularly inclined to read magazines that fall within the fashion, health
and beauty categories. The content of the listed magazines aptly aligns with many of the
discount services that Groupon offers, and will foster a strong brand connection between
each title and the product.

Figure 33: Magazine Selections (Simmons, 2009)
Magazine Index
Lucky 136
Self 134
Vanity Fair 126
Vogue 119
Allure 116

Magazine advertising provides an ideal opportunity for Groupon to penetrate its intended
market while it is especially attentive to marketing messages. Relative to other media types,
magazines command the most attention from consumers. The average reader spends 43
minutes reading an issue, and is much less likely to partake in other activities while reading
content (MPA, 2011).

Magazines also effectively encourage further brand engagement by driving readers to
Internet sites. According to BIGresearch, approximately one-third of magazine readers report
that they have used a computer or mobile device to access a magazine’s website in the
past six months (MPA). Once online, consumers will be more prone to visiting Groupon’s
homepage after recalling its presence within the magazine.


Spot (Seven Markets)

Spot Radio: Morning and Evening Drive
Radio is an important medium to leverage throughout the duration of the campaign
because it is an inexpensive option for increasing reach and frequency. As the target is
composed of women who are employed, morning and evening drive times will be crucial
day parts for reaching the target on its commute to and from work. Radio advertisements
can be particularly effective in the morning at the time that Groupon sends out its daily
deal. A message about a new product each morning will remind the target that Groupon
can 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 117

Radio 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 opportunities
have great potential to reach impulse buyers out of home (MFP). Adult Alternative, Adult
Contemporary, and Classic Rock radio formats indexed particularly high among the target.


Outdoor
Growth 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 effective
in spot markets to create awareness about local brands and businesses. The members of
target will see transit-based outdoor ads on their way to work every morning, a time when
they will be enticed by the prospect of a daily discount.

Because the target consists of employed females who lead active, on-the-go lifestyles, the
campaign 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 average
index 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 116

The ads will be placed in transit locations depending on the forms of public transportation
operating in each spot market. Bus and bus stop advertising will be present in all seven
markets, and billboards will be placed along traffic-heavy freeways by which the target
commutes 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 stations
and on the train cars themselves.


Personal Media Network Grids
Figure 36: PMN Grids based on 12 women in the target

Weekday
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 Bkg

Shortly after waking up/
before breakfast 5 3 2 2 5 2 2 1 1 1 1 1 6 6 1 1

During breakfast 3 1 1 2 1 1 2 2 3 3 2

Mid to late morning 3 1 2 1 1 1 10 10 3 2 1 2

During lunch 2 1 1 7 3 5 2 1 2

Early to mid afternoon 1 1 8 6 3 2 1 2

Late afternoon/before dinner 1 1 1 1 5 1 3 2 2 2 1 7 6 3 1 1

During dinner 6 3 4 2 1 1 1 1 4 3 3
After dinner/
mid to late evening
10 1 9 1 1 1 1 1 1 1 2 1 2 9 5 7 2 2 1

Weekend
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 Bkg

Shortly after waking up/
before breakfast 5 5 3 1 3 2 1 4 4 2 1 1 1 1 1 1

During breakfast 5 3 3 2 6 6 2 2 1 2 1 1 1

Mid to late morning 3 2 1 4 3 3 3 3 1 6 3 6 5 3 4 1 1

During lunch 3 2 1 1 1 1 3 2 3 2 2 2

Early to mid afternoon 2 2 2 1 2 2 2 1 5 4 3 4 2 4

Late afternoon/before dinner 2 1 2 1 2 1 1 1 1 1 4 1 3 1 1 1

During dinner 2 1 1 1 1 1 1 1 1 1 1 1
After dinner/
mid to late evening 8 1 7 4 3 1 2 1 1 2 2 2 2
In bed/
just before going to sleep 6 1 5 2 1 1 1 1 3 3 2 2


Reach & Frequency
Objective
Achieve an 80/3.5 R/F nationally during the campaign kick-off months from June to August
and again from November to December. Then achieve a 75/3 R/F nationally for March
through May. Spot R/F is 85/4 from June to August and November to December. There is no
additional spot heavy-up during the remaining months.

Strategy
The lowest overall R/F is achieved from January to May at the end of the campaign with
75/3. Highest overall will occur from June to August and November to December with 80/3.5
national and 85/4 spot.

Rationale
Social couponing is a pretty new category and while Groupon was the pioneer in the
industry, it is still relatively new and unused by many people. There are many incoming
threats and because people do no know much about the category, there is currently little
brand loyalty.

Because of this lack of establishment and loyalty, Groupon needs higher reach and
frequency 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 because
of the spikes in Groupon usage during the summer month and the holidays. Internet will be
used to supplement low R/F months.

Ostrow Model
+.0 +.5 -.2 = +.3 + 3.0 Benchmark = 3.3 estimated frequency

See next page for summary

Objectives, Strategies & Rationales: Reach & Frequency 30

Ostrow Model: Groupon O
Part I: Marketing Factors That Affect Frequency Par
Established brand? (No, not yet because it has only been around for three years) +.1
High market share? (Yes, leader in this new category) -.2
Dominant brand? (Yes, but incoming threats) -.2
High brand loyalty (No, people are just learning about it) +.1
Long purchase cycle (No, daily nature but may not purchase daily) +.1
Product used occasionally? (Yes, used daily but not bought daily) -.1
Need to beat competition? (Yes, incoming threats from competitors) +.1
Advertising to older consumers/children? (No, women 25-44) +.1
.0

Part II: Copy Factors That Affect Frequency
Simple Copy? (No, need to explain product) +.2
Copy more unique than competition? (No, all need complex copy) +.1
Continuing campaign? (No, new campaign) +.2
Product sell copy? (No, more of an image sell for the company) +.1
Single kind of message? (Yes, single kind of message) -.1
To avoid wear out: new messages? (Yes, new strategy) -.1
Larger ad units? (No, medium ads units) +.1
+.5

Part III: Media Factors That Affect Frequency
Lower ad clutter? (Yes, because category barely advertising) -.2
Compatible editorial? (Yes, especially with Internet) -.1
Attentiveness high? (Yes, medium involvement product category) -.1
Continuous advertising? (No, limited budget requires flighting) +.2
Few media used? (No, moderate media mix) +.1
Opportunities 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

Media Budget
Objective
86.5% of the media budget will be spent on national media and 13.5% will be allocated to
spot media in seven markets during the months of June to May.

Strategy
Internet 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 May
Concert 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 $18,985,900

Spot 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

Rationale
The majority of the money is spent on national media because Groupon is used nationally
and this will give Groupon the reach and frequency necessary to increase awareness and
establish them as the leader within the daily deals industry amongst both consumers and
retailers. Reach is important since Groupon has never done a campaign of this breadth
before.

Most of the budget is dedicated to Internet (23.5%) and cable television (41.4%). This is
because Internet is prominent in the target’s lives and television is a source of information
and 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 for
the target and according to the PMN grids, many women read magazines after work and on
the 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% $2,687,800.00

Spot 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 total
U.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 towards
coupons and online shopping. Most of the spot market budget is spent on radio and on the
spot 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 months
with 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 in
Groupon usage.


Geography
Objective
The media buys for Groupon will be national in scope, plus a heavy-up in seven spot
markets across the country with large populations of the target and high indices for doing
more shopping/Internet than before and that coupons draw them to places they do not
shop.

Strategy
Geography is important to the campaign because while Groupon is a mostly national
brand, the deals are entirely local. It is important to focus on certain spot markets to meet
Groupon’s objectives. Spot markets were selected based on the population’s Internet
and shopping behaviors, the percent population of the target and their attitudes towards
coupons. These are also large cities with many retailers who are potential participants for
supplying Groupon deals. This offensive strategy to target cities with favorable attitudes
toward coupons and online shopping will help Groupon increase awareness and establish
itself 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.

Rationale
Figure 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 98 108 103

The media plan is national plus spot heavy-up because Groupon is located in over
150 markets in the U.S., which is on a national scale. The industry is online based, so the
competitors are everywhere as well, therefore Groupon needs to advertise nationally. The
plan hopes to achieve the greatest reach possible by doing national advertising, but place
extra focus on cities where Groupon is used and where there are active users. Targeting
these markets can keep Groupon as the leader in the industry.

Objectives, Strategies & Rationales: Geography 37

Scheduling/Timing
Objective
Nationally and spot, the highest R/F will be achieved in the launch months of June to
August and again in November to December. Network television, cable television, women’s
magazines, and Internet, both search and targeted sites, will be used for all months at
varying buys. Spot radio and outdoor will be used in June, July, August, November and
December.

Strategy
The Groupon campaign will take place from June to May. There will be extra emphasis the
first three months of the campaign to create a strong presence early and then again during
the holiday season when people shop more and buy gifts.

Media spending will go down after the first quarter until November and December for the
holiday season, where both national and spot will run heavily. There will be a lull again for
January and February. Spending will then continue at a higher rate for the last three months
of the campaign on a national level.

Rationale
The campaign tries to advertise heaviest when Groupon traffic and online shopping is at
its highest, which is during the summer and the holiday season. The campaign starts in the
summer to spread brand awareness and recognition before competitors start advertising
more heavily and create clutter.

The Restaurant Week sponsorship highlights the brand name in the spot markets and
connects with consumers in a relevant, but unintrusive environment. It also keeps the brand
going strong throughout the year because the spot markets all have different weeks for
Restaurant Week. The concert promotion also reaches the target in a relevant and engaging
setting in months where traffic is higher.

Objectives, Strategies & Rationales: Scheduling/Timing 38

Sales Promotions
Objective
Two promotions will be used to increase brand awareness, encourage new users to sign up
for Groupon, and establish Groupon as the leader within the daily deals industry amongst
both consumers and potential retailers.

Promotion One: Restaurant Week Sponsorship

Objective
The promotion, which runs in different months in all of the spot markets, will encourage new
users to sign up and retailers to run with Groupon.

Strategy
Groupon will sponsor Restaurant Week in all seven spot markets. The sponsorship will be at
the 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 ads

The sponsorship will also include a top of the page Leaderboard Banner Advertisement on
the website. There is also the opportunity to host the kick-off event for the week and to have
dinner for ten at the restaurant of Groupon’s choice during the week. Groupon will also
have banner ads on the blog and additional opportunities for cross-promotional program
development implementation with participating restaurants. Lastly, Groupon will get a
contact list of participating restaurants, the opportunity to present to restaurants at Kick Off
Event and the opportunity to add questions to the post event survey (Arizona Restaurant
Week, 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

The costs for the promotions are based off of numbers from the Phoenix, Arizona restaurant
week, which is not one of the spot markets, but is what the costs can be based off of. Based
on the size of Phoenix compared to the selected spot markets, the following prices were
determined:

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 approximately
1.7 million. The prices are based on the ratio of the size of the city and the cost. So New
York City has 8.2 million people, divided by 1.7, then multiplied by $25,000, which equals
approximately $120,000 (8.2 million / 1.7 million x $25,000 = $120,000).

Rationale
The reasoning behind sponsoring
Restaurant Week is because
the restaurant category is a
large category on Groupon. This
promotion will reach both retailers
and potential Groupon users in a
relevant setting. It will reach them
through multiple vehicles without
being intrusive. Being able to
experience a restaurant that could
potentially be featured on Groupon
is important for individuals to see
what kind of offers Groupon can
have. Also, Restaurant Week is an
established event in many cities,
so Groupon will be tied in with a
prestigious event.

Restaurant Week also provides
socializing opportunities like going
out to eat with friends. It is also
based around discounts, which is
the perfect context for Groupon.


Promotion Two: Concert Engagement Promotion

Objective
The promotion, which runs in June, July and August in all of the spot markets, will encourage
individuals to engage with Groupon in a social setting in order to increase awareness of
Groupon and establish them as the leader within the daily deals industry.

Strategy
Groupon will be featured on the jumbotron in between sets at a concert in each of the spot
markets. The screen will feature three local retailers and an announcement will be made
to explain what Groupon is, how to sign up, the offers it has, and will then ask the audience
to vote for the retailer up on the screen they would most like to get a deal from. The first 50
people 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 $748,000

Rationale
The target audience likes to enjoy life and music is a part of that. They have attended
concerts 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 a
concert will engage the consumer in their own location. They can choose where they want
the 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 technologically
savvy just like using Groupon.


Works Cited

2010 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.html00000

BlogHer. (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.pdf

Boulton. (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?1008332

Deatsch, 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.html

Griner, 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-126903

Groupon Works. (2011). www.Groupon.com

Hampp, A. (2011, April 10). Bravo’s ‘Buzz Marketing’ Keeps Viewers Tuned In. Retrieved 2011,
from Advertising Age: http://adage.com/print/226898

LivingSocial. (2011). www.livingsocial.com

Magazine Publishers of America. (2010). Magazine Handbook: Engagement to Action. MPA.

Works Cited 42

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/227160

Pogue, 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=1

Rueter, 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-coupons

Siwicki, 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-
facebook

Slutsky, 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/227218

Stone, 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.htm

TNS- 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.com

VALS. (2011). Strategic Business Insights.

Works Cited 43

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