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Google’s Plans to Kill Groupon

Among the many options digital marketers find themselves faced with today, one of the more useful tools that quite a few marketers have taken advantage of are offers, deals and coupons. As far as most people are concerned, the best place to turn with plans of starting an offer or coupon campaign is to Groupon. The company is widely known as the best option in the online deal field, but it seems that they are soon to have a huge amount of competition to deal with. Not only is Google the dominating name in things like search advertising, display advertising, and even mobile advertising, but the company has decided to begin their takeover of the online deal business as well. Sorry Groupon, but you probably should have seen it coming.

After all, after looking back at beginnings, Google was working on offers and deals as marketing tools all the way back to 2010. Groupon, which is a company that began sometime in 2008, did not really bring online coupons to the level of popularity they are at today until 2011. With Google keeping back a bit for the past few years, the company has had time to test, develop and improve their coupon and offer tools to match the consumer wants and needs. However, Google has tools at their disposal that Groupon does not, allowing the company to take their deal offerings for advertisers to a whole new level.

Now that Google has been testing their offers and daily deals for a few years, they are making the tools public and available to the millions of advertisers that use Google’s resources for their marketing campaigns. Evidence that Google was planning to build upon their deals and offers has been seen for a few months now, as they slowly extended their service. Now, the company is tying their deals and coupons into their AdWords tool, making it available for all AdWords advertisers to use.

The actual presentation of these deals and offers to online consumers is actually very simple, but promises to be incredible effective. Advertisers will now have the option, while setting up the usual search ads one would set up in AdWords, to include a deal or offer within the advertisement. Beneath the text and link of the advertisement will appear the description of the offer. Next to this description will appear a yellow-orange button that says View Offer. With this tool, advertisers will be able to take advantage of two ad formats at the same time, all within AdWords and all from Google.

With that stated, it is incredibly simple to see just how heavy of a competition Groupon has on its hands here. Simply stated, there is a good change that Groupon will lose its top spot in the online offers business, as Google has already dominated many of the other marketing methods that the company has delved into. Now that this feature has been released, we can probably expect a growth in the usage of deals and coupons by advertisers, as well as a growth in use of AdWords itself.

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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  1. Pretty soon G will have a specific area of their engine for every product/service industry out there so only they alone can make ad revenue.

  2. I think the founders of Groupon were so full of themselves thinking that they could grow their site and do better than the $1 billion offer from Google.

  3. While the topic of this article is interesting and the author brings up some good points I found it difficult to read. There were numerous spelling and grammatical errors that really took away from the article. I usually look past the odd typo but this is really unacceptable for someone who has “been a writer at one level or another for the past 15+ years”

    Other thsn that, I’m interested to see the marketing strategy Google implements. I have stopped using Groupon because I don’t think they are conducting proper due dilligence on the companies they partner with. I’ve had three issues in less than 6 months.

    1. good points,*

      typo,* but
      (You forgot two commas! Whoa!)


      While the topic of your post is interesting and you bring up some good points, I found it difficult to read.
      Your sentence structure becomes choppy and hard to read towards the end.
      I usually look past the odd typo, but this is really unacceptable for someone who posts annoying comments picking apart articles.

      Actually, it’s all unacceptable.

      1. Haha, I was just about to reply and tell him he should not be doling out advice in the way of grammar.

      2. I was just about to post a couple of typo alerts also. Seems to me that Performance Marketing Insider needs an editor! I’m available 🙂

        “Simply stated, there is a good change [s.b. “chance”] that…. “

  4. “Me Too” is seldom a winning strategy. The spoils usually go to the perceived “specialist” in a given area, which I think Groupon has already established. Amazon has a perceived advantage over Groupon as well based on just overall online clout, but Amazon Local Deals has not knocked off Groupon to date.

    Google+ was supposed to make a major dent in Facebook based on this same line of thinking and it didn’t.

    I think Groupon will continue to own this category, with “Grouponitude”, (being treated poorly by the retailer because you are a Groupon holder), being its major threat to survival over all.

  5. Although it may seem that Google has the advantage because of its size I would actually argue that this is a disadvantage. Although I am in no way a fan of GO (I do not think the model they offer to retailers is a sustainable model for the retailers) they have though demonstrated that Google is open to market penetration on numerous fronts, and this is simply because of the size of Google.

    Whether GO survives and prospers is neither here nor there, it is the fact that like many other companies they have eaten away at the near monopoly Googles has (or perceives to have) on the internet marketing. Whilst GO may fail against Google the deeper analysis is that Google did not come up with nor master the coupon deal marketing, they had to react to it, and this is something that I think talks of a weakness in the Google model. (Like all ’empires’ Google will become unsustainable, simply due to its size, to withstand successfully multiple concurrent attacks either at its periphery or indeed from within.)

  6. I don’t agree with this article. I have seen the turnout for Google Offers vs Groupon Offers in the past and Google Offer’s performance has been quite disappointing. As Groupon investors have seen in the past, their business doesn’t have a strong structure to continue on at a strong pace. The same would apply for Google Offer unless they really low ball the cost of the offer vs Groupon.

    IMHO Groupon has the Edge over Google Offers at this time based on the following and the branding they have as Groupon. The future is yet to be seen but unless Groupon goes bankrupt due to bad business model, they shall be stronger than Google at least for the Online Coupon market is concerned.

  7. It will be interesting to see how google is going to take on GRoupon. Personally I think groupon was hyped and over valued. Livingsocial joined the coupons market as well with that 6 billion $ valuation. Every one can see the end result- groupon stock price is dropping and Livingsocial is now being valued at 1.5 billion

    One should realize that there are already companies offering coupons or group buying , way before groupon or Livingsocial existence. Ex woot which offered products to consumers at discounted prices. Like wise for instance made it easier for restaurants to offer coupons to consumers. But these were not over hyped. Are still running and will continue to run.

    The one challenge google will face by integrating Adwords with coupons or offers is that coupons are more relevant in local markets ex: restaurants, dry cleaning , salons spas etc…. I doubt local merchants are going to use Adwords.

    And with the way the keywords are priced it is highly unlikely that these small businesses can afford to spend enough $$ to see conversion.

    Also if you ever tried adwords you will realize how complex it can get and I doubt a lot of these local merchants are going to use the offers.

    First ask yourself e question- how many times in your lifetime have you clicked the paid ads?from what I think it is to offset the ad revenues google is coming out with offers.

    Well time will tell who is going to lead the market.

  8. It’s like negating a negative. IMHO Google should stay away from this faulty business model. Your presence will only save Groupon. Unless that’s the point in the first place.

  9. There’s a fundamental reason why I personally believe that “Deal of the Day” providers will face an increasingly awkward market situation. That is, that these companies are actually damaging the market they live from. While their (parasitic?) business model in theory may be a great idea to monnetize remaining stock and over capacity, in practical life they seem to be agressively pushing their services (often at small businesses that are in desperate need of cash) regardlessly of whether it helps the client company or not. At the level of its salesforce, this business really mutated into a sort of doorstep brigade, overpromising and trying to win as many deals as possible with certainly not always having the well being of their client company in mind. Well, we live in a free market – so where’s the problem? The problem really arrises out of the many business owners that have been using services offered by “Deal of the Day” providers and… failed! They learned that if they sell their service or product at 30% or 50% less than normal, customers later will jump off board when they return to their normal price level. Instead of building a relationship to the small business owner, the end-customer builds a dependency to “Deal of the Day” company – waiting for the next incredible deal! The conclusion therefore is that for a business owner there’s limited value while there certainly is a not to be underestimated risk of loosing the entire business! “Deal of the Day” companies fuel and accelerate the negative price spiral without really contributing anything to the real economy.

  10. Aha, I have a direct experience with Groupon with some of my relatives in their restaurants. Groupon attracted cheap crowed where only paid on the deal. The idea is to attract new crowed into the restaurant and hoping will buy more. But, it did not work that way. Moreover, the comer of new crowed showed up only once, for the deal only. This has caused us to drop Groupon from our marketing advertizements. I think,the end of Groupon is very soon. They missed their chance to sell it for Goolge back then. Big Mistake!!!

    1. I agree. I had a similiar experience, Groupon promised to generate new customers. But the coupon redeemers are only interested in the deal, 90% never returned.

  11. Same story again… as it was with Ford, Intel or Nokia…
    First top company in the field and market share leader – mostly due to being a pioneer in technology of particular field.
    Then big loser of market myopia and blindness … The times of long-lasting business models are gone!
    It’s time to dump blinders and feel the breath of competitors from not necessarily our business industry!

  12. Funny this comes up they have been competing with groupon for close to a year or maybe longer, Still a great article Pace.

  13. Yeah this is another reason people hate Google. Besides the fact they think their GOD! I will be so happy when bing and facebook shut them down and serve that hot humble pie for ole Matt Cutts to eat. I long for this day.

  14. Hi! I’m at work surfing around your blog from my new iphone 3gs! Just wanted to say I love reading your blog and look forward to all your posts! Carry on the superb work!

  15. Speculative but great viewpoint. If Google can offer on a pay-per-sale basis at a lower and consistent entry cost than the competitor model, smaller merchants may have a great tool to drive sales or actions.

    My concern is in the management of a campaign with the constantly changing and adapting search term query’s of today’s users, and how many ‘Google Offers’ Google can actually deliver in any one local market?

What's your opinion?