Jason Del Rey

Recent Posts by Jason Del Rey

LivingSocial’s Traffic Is Plummeting

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When Amazon reported its third-quarter earnings late last month, it once again shed a bit of light on the troubles at LivingSocial, the deals site in which Amazon holds a 31 percent stake.

After revenue rose a modest six percent at LivingSocial in the first half of the year, the Amazon filing revealed that revenue is now down a little less than one percent at the Washington, D.C.-based deals startup through the first nine months. (It did narrow its losses — to around $26 million in the third quarter — after losing $81 million in the first half of the year.)

A look at LivingSocial’s Web traffic tells a different story.

In September, traffic to LivingSocial on desktop computers dropped 42 percent, to 4.6 million visitors, from 7.9 million in the same quarter last year, according to comScore. Such a collapse wouldn’t be awful if mobile traffic was rising, but it’s not. LivingSocial’s traffic on mobile phones and tablets fell 28 percent year over year in September, to 7.7 million people, from 10.6 million last year, comScore estimates.

In a statement, LivingSocial spokeswoman Sara Parker blamed the drop on a number of factors, including a hack of customer account info in April, and a decrease in some marketing programs.

“Over the past year, LivingSocial has seen a decrease in traffic due to a number of factors including a hack and a scheduled decrease in certain customer acquisition programs while we made substantial changes to the LivingSocial platform,” Parker wrote. “These changes allow for greater flexibility in the way that we work with merchants and increased inventory for our customers. A decrease was expected as we made this transition into being a more comprehensive marketplace at a local and national level for consumers to buy and share the best things to do in their city and on the go.”

“We’re feeling like we’re in good shape moving forward,” she added.

The problem with blaming part of the drop on the move to a marketplace model where deals run longer than just a few days, is that Groupon is going through a similar transition but not seeing such a negative traffic pattern.

During the same period, Groupon’s desktop traffic decreased eight percent, from about 13 million uniques last year to 12 million this year. But its growth on mobile more than made up for that decrease. Groupon’s traffic on mobile phones and tablets is skyrocketing, according to comScore — up 66 percent year over year, to 33 million unique visitors in September.

ComScore’s measurement has plenty of critics, as it often shows lower counts than internal Web analysis tools. But it is often directionally correct, and the direction it shows LivingSocial moving in is not a good one.

Add to that the fact that Groupon’s data is a lot more positive, and it begins to look like LivingSocial is suffering not from a daily-deals problem, but a LivingSocial problem.


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