September 24th, 2011 — Marketing, Tech, Words and writing
You, a freelance creative, buy a plane ticket to go and see a client. You rebill the ticket at cost and your client pays you back. So, if you need to state a number when you’re applying for a credit line or some such, should you include the value of that ticket in your revenues?
Of course not. That pass through expense has nothing to do with your business; it’s just money that appears on your balance sheet on its way from one place to another. Or to quote the wonderful though wonky Grumpy Old Accountants website, “SEC Staff Accounting Bulletin 101 on Revenue Recognition, Question 10 specifically, is congruent with EITF 99-19. The SEC stated that firms should report revenues on a net basis if they did not take title to the products, did not have the risk and rewards of ownership, and acted as an agent or broker.”
Groupon did not get the memo. They have been booking the full value of their coupon sales as revenue, not accounting for the fact that a large percentage of what they are collecting is going to go into the pockets of retailers and they are just a conduit. As a result, yesterday Groupon had to restate its revenues and reduce them by 50%, while incidentally announcing their recently hired CEO is on her way back to Google.
So much for that IPO. And perhaps much of that money that Groupon collected on the premise that its copywriters are worth $6 billion will have to be returned, since it was based on the misstated revenues. As I mentioned in that earlier post, retailers like the results that they get with Groupon but resent the charges which are higher than with other social couponing sites. It would be a lot of fun to be a LivingSocial or BlackBoardEats rep calling on your prospects next week, would it not?
I hope Groupon does not go down in flames because I think the quality of its creative expression (along with excellent, rock-solid marketing) has been the decider. You may have noticed that the Groupon “Voice” now extends no further than the opening sentence or two of most offers; after that it is straightforward, though good, marketing copy. But this is offset by the wonderful temporary insanity of the “Groupon Says” feature at the bottom of the offer page.
Google copywriters: if you guys get laid off, give otisregrets a call and let’s talk about some mutual opportunities.
December 22nd, 2010 — Copywriting 101, Marketing, Words and writing
Groupon, which was featured in an earlier post and also in my social media presentation at the DMA in San Francisco, has recently spurned a $6 billion takeover offer from Google. Pretty cheeky…. considering that there’s nothing proprietary or patent-able about its business of delivering a daily coupon to your inbox with a big discount on a local business.
Indeed, Groupon is one of four coupon outfits I now hear from on a regular basis. BlackboardEats is doing something similar for San Francisco (except they don’t collect the money up front which is good for me but a poor profit model for them), Open Table has gotten into the act with discounts as well as reservations, and LocalSavings is giving Groupon a real run for its money here in the upstate NY area.
But Groupon’s emails are the ones I always open, and why? It’s the copywriting! Today, for example, in an offering for a Portuguese restaurant, the copywriter noticed it had small plates and delivered the following riff: “Small plates provide diners with a rare chance to act like a giant and yell “fee-fi-fo-fum!” at the waitstaff. Enjoy a make-believe growth spurt with today’s Groupon: for $20, you get $40 worth of Portuguese cuisine at Atasca in Cambridge.”
That’s the kind of extemporizing that used to get us yelled at by our bosses when we were cub copywriters… but as always it’s followed by solid research-based benefits including a description of menu items, a reference to its listing on a best-of directory, and a verbal capsule of the ambience: “The in-house atmosphere is warm and romantic, bedecked with Portuguese art and fresh flowers, ideal for a smooch-inducing date or a platonic rendezvous with a band of surly Casanovas.” You can’t make this stuff up, at least you can’t day in and day out. I spoke to one restaurateur who was a happy Groupon client and he said yes, someone from Groupon did indeed call and interview him at length.
I have one worry for Groupon though, and that is its inability to attract quality advertisers in the hinterlands. In San Francisco and Boston, the specials are from recognizable establishments where I’d want to eat anyway. But in Dallas and Albany (all part of my quixotic geographical rotation) we tend to get tanning salons, car washes and second-tier pizza joints, the same folks who show up in Val-Pak.
If Groupon is going to grow beyond $6 billion they’re going to have to find a way to sell creative marketing to the late adopters. If Groupon should happen to implode, at least there will be a lot of good copywriters available for hire in the Chicago area (where Groupon is based).
August 10th, 2010 — Everything else, Marketing
I have over the last year become a heavy user of Groupon, the viral couponing site that urges you to recruit your friends to share in the savings. Or, more correctly, a heavy buyer because I currently have more coupons in my bucket that I am able to use on my trips to the Bay Area. And that’s okay (for the merchant) because I’ve paid up front and they have my money whether or not I use the Groupon.
I will devote some time to talking about Groupon at my DMA preso on October 11, because this marketer is a great example of the “in media res” nature of social media. Traditionally there was one entry point for advertising. You hook them with your print ad, TV spot or direct marketing and off you go.
But with social media, there are many possible entry points. Maybe you are on the email list. Maybe you get a Groupon offer forwarded by a friend. Or maybe you hear about it on a local TV news show, which is quite possible because of the “Groupawn” who has mounted a campaign to live successfully for a year with no money, just Groupons, and he wins $100,000 if he does.
Homer had some thoughts about plot construction when he wrote the Iliad and Odyssey some 3000 years ago. Instead of starting at the beginning of the Peloponnesian War, which many of his readers were bored sick about, he starts in the middle. Then the plot has occasional flashbacks but mostly you catch up as you go along.
For social media, what’s key is to have an anchor concept which is always present no matter when you arrive at the conversation. For Groupon, it’s the “live on Groupons” meme which was well articulated in a number of videos from contestants who promised to spend a year without money, using only Groupons (barter ok) to get their daily necessities.
You can “live on Groupons” because they’re so cool and the savings are so great, even if you don’t take it literally. That’s the message that gets across, no matter where you join the conversation.