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Groupon Diversifies Product Platform as Local Advertising Trends Shift

Groupon is branching out into other areas with the launch of an online scheduling tool that lets small business customers book appointments more easily for the services they have purchased through the site. Businesses can also use it to book appointments that were not sold through Groupon, according to an account in Bloomberg.

Other Directions

Groupon is clearly experimenting with its model, trying to expand it into new areas. It is pushing into the mobile space with its recent acquisitions of Kima Labs and Hyperpublic. It is also testing a concept in a few markets, giving users, in which users pay $29.99 for a premium service. The annual fee gives users access to deals before every one else, and to make easier refunds for deals they don’t use.

Weaker-than-expected Local Advertising

These moves come as BIA/Kelsey reports lower-than-expected local advertising growth, albeit with still strong growth in the digital component. In October it projected the total of the U.S. local media market to be $135.9 billion in 2011, but it now expects it to be only $132.8 billion.

BIA/Kelsey points to a number of macro economic reasons including the U.S. economy, concerns about Europe’s fiscal situation and the still struggling housing market. This slowdown, plus the lack of political advertising in 2011, resulted in a decrease of 2.4% compared with 2010, it said.

In general, it predicts the overall local media market will grow a bit more slowly over the next five years and that growth in total local media advertising will not keep pace with that of the overall economy.

However, growth in online/interactive/digital advertising revenues will remain strong, with a 2011-2016 CAGR of 12.7%, it said, compared with a 2011-2016 CAGR of 0.2% for traditional advertising revenues. By 2016 local online/interactive/digital advertising revenues will be $38.5 billion.


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