News Column

Groupon Moves in On Google, Yahoo with Global Marketing Effort

August 20, 2013

Groupon Inc. has introduced a global affiliate program to distribute its deals more widely, hoping to compete with major ad platforms from the likes of Google and Yahoo.

The Groupon Partner Network, announced Monday, offers website publishers a way to make money by running ads for Groupon deals. By signing up for the network, a Chicago restaurant blogger will get access to ads for Groupon offers featuring local eateries, for example. The ads are appended with a unique tracking link so Groupon can monitor how many consumers click on it and ultimately buy that deal. The blogger then receives a commission for each successful transaction.

This kind of Internet advertising puts Groupon into competition with Google AdWords and Yahoo! Bing Network, long-established and lucrative platforms for those tech companies.

"This is an alternative for publishers to better monetize their site," said Sean Smyth, Groupon's vice president of global partner marketing and business development.

As a promotion to launch the Groupon Partner Network, the company is offering commission rates of 10 to 12 percent for local deals; 6 to 8 percent for Getaways, its travel category; and 5 to 8 percent for Goods, which sells physical products directly to consumers. The promotion runs through September, after which rates will vary between 2 and 10 percent. The commission is based off gross billings, or the total amount that Groupon collects before paying merchants their cut of a deal. Paying affiliates their commissions further divides that pie, but Groupon is betting on higher volume through the wider distribution of its deals, reaching consumers that aren't visiting Groupon's website or responding to the company's daily email blasts.

"Groupon does a lot of marketing," Smyth said. "When it comes to transactional marketing, this has proven to be the best way to pay for media -- where we see the instant return. If a third party publisher is promoting a deal, they only get paid if someone buys something. With other marketing tactics, the return may lag. Maybe you get someone to sign up for the Groupon email list, but they may not buy something."

The partner network is available in 30 countries, part of Groupon's ongoing "One Playbook" strategy to unify technology platforms and processes across its global operations. In addition, the company is shifting from its "push" style of bombarding consumers with offers to a "pull" approach where shoppers browse a repository of ongoing deals. Many of the deals in that marketplace, which Groupon is continuing to build, were not being distributed through the company's current affiliate program, Smyth said.

"Now with our own platform, we can get distribution for all those deals," he said.

Source: Copyright Chicago Tribune 2013. Distributed by MCT Information Services

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