Will Groupon's Super Bowl Ad Be a Touchdown or a Fumble?
Groupon is spending an estimated $3 million on a Super Bowl ad this weekend to spread the word beyond its user base of 50 million subscribers.
To be sure, the pressure is on for Groupon to become the household name for daily deals.
Awareness of LivingSocial recently spiked after the company leaned on its investor Amazon to stage a one-day deal that offered a $20 gift card for 10 bucks. Likewise, after Groupon spurned Google’s $6 billion takeover offer, the search giant is likely to build a daily deals competitor of its own.
So, when the Pittsburgh Steelers face off against the Green Bay Packers on Sunday, we know who will be paying really close attention to Groupon’s debut TV appearance.
Not just the viewers, who pay notoriously close attention to the interstitials, but Groupon’s investors, like Andreessen Horowitz, Battery Ventures, and Kleiner Perkins Caufield & Byers, all of which will be curious to see where their nearly $1 billion is going.
The idea of a Super Bowl commercial is smart if the cards are played right.
“The Super Bowl is an incredibly powerful venue for new and emerging companies. It’s a chance to step out on a national stage,” said Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, who blogged about some of the companies trying to make a big splash at this year’s game.
Since the company’s business is being replicated by dozens of clones in every major city, to varying degrees of success, it’s all about creating exposure and name recognition. “Google has all the resources in the world. It’s hard to fight someone like that unless you have something to protect you….All you really have is a strong brand to fall back on,” Calkins said.
But it is not exactly a touchdown. There have been fumbles, and private companies backed by millions of dollars bring up bad memories of the dot-com days, when start-ups and newly minted IPOs failed to deliver on their promises.
Groupon will also have the hard job of creating an effective advertisement that tells its story without being too artsy.
“They’ve got a big creative challenge ahead to explain the product and deliver a benefit in a way that breaks through in the Super Bowl. If they aren’t careful, they will run an ad creative that’s interesting but doesn’t explain the product,” Calkins said.
UPDATE: Groupon posted one of the commercials it rejected today on its blog, which is confessions of a Groupon addict.
Groupon is not providing any of the details–like whether there will be a star or how it will explain what the company is all about–but it has hired CP+B and Publicis Groupe’s Starcom as the lead agencies to do the heavy lifting.
Whatever Groupon does, expect it to have a viral component that extends the momentum after the 30 seconds is up.
Take CP+B’s genius stunt it pulled for Burger King called the “Whopper Sacrifice.”
The campaign gave Facebook users an excuse to dump some of the random childhood buddies or co-workers that had friended you over the years in return for a free Whopper. If users removed 10 friends, they’d get the burger.
Only four days after launch, tens of thousands of people had been sacrificed.
On the flip side, it also runs the risk of selling something so well that it can’t meet the demand.
“If I were Groupon, I would have some pretty big offers coming up over the next week. If the ad is successful at bringing new customers to the site, you then want them to have a good experience,” Calkins said.
Groupon will also have to deal with a surge in traffic, or a spike in first-time orders that could result in a high number of customer service inquires.
When LivingSocial conducted its Amazon gift card offer, it learned this the hard way. The company’s systems were overloaded, leading to delayed confirmation emails, credit-card charges and customer service responses. It also had to weed out people who were trying to game the system by trying to buy more than one gift card. The surge can all be explained by the hundreds of thousands of novices hitting the site all at the same time.
Groupon’s commercial in the Super Bowl almost didn’t happen, managing to nab spare airtime only at the last minute, AdAge reports.
It’s banking on the spot to give it a nice bump. For last week, Groupon.com received about half, or 58.5 percent, of all U.S. visits when looking at a category of “group-buying sites.” LivingSocial received 25 percent, reports Experian Hitwise. Total visits for each of them were 5.45 million and 2.33 million, respectively. The Super Bowl viewership is orders of magnitude more. On Sunday, it’s supposed to beat last year’s record of more than 100 million viewers.
Much of Groupon’s publicity before this came from its high-profile business moves, which the company used to its best abilities to attract a mainstream audience. For example, the drama of Groupon’s rejection of Google resulted in at least two high-profile TV appearances for CEO Andrew Mason–the “Today Show” and “Charlie Rose.”