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Groupon's Social Media Push May Be Its Salvation. Or Not

Patricio Robles at eConsultancy wrote an excellent blog post that Groupon may be placing inordinate faith in its email marketing list. The post points to its questionable financials and Groupon's CEO defense of the company’s viability in an internal memo.

Clearly, he is, Robles writes, betting the farm on the company’s email list. "Our marketing - at least the customer acquisition marketing that we remove from ACSOI — is designed to add people to our own long-term marketing channel - our daily email list," Mason wrote. "Once we have a customer’s email, we can continually market to them at no additional cost. Compare this to Johnson and Johnson, McDonald’s, or most other companies."

However, Robles said, there is no mention of Groupon’s cultivation and maintenance of that list. "Subscriber acquisition is just one part of the email marketing equation; keeping subscribers and converting them is just as important," Robles writes.

It may be that Groupon does indeed recognize it should not be so dependent on its email list. The site has developed a number of initiatives in which social media plays a key role.

It recently began adding its deals to rVue’s DOOH offering via rVue's new Content Hub. It has integrated with check-in providers such as Foursquare. It has teamed up with supermarkets via their loyalty cards, according to Ad Age. It recently launched a mobile real-time daily deal offering, Groupon Now.

Email Marketing Versus Social?

However it may be that this is not about which outreach channel is the best for Groupon — email or social - or even if Groupon is not paying attention to email marketing best practices such as list cultivation and conversion. Doubts are growing about long-term sustainability about the daily deal market, in large part, ironically, because of Groupon and its IPO filing and recently reported loss for second quarter.

For the most part, attention has been paid to the problems some merchants have had with daily deals. Little focus has been given to the model itself, based on the assumption that its wild popularity will translate into long-term success. However if Groupon - the granddaddy of the daily deal sites - is finding it difficult to make ends meet, it needs to be considered whether that is because of big picture or tactical (I.e., its email list issues) reasons.

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