Refining the GroupOn “Blunt Instrument”

Local Social SummitNovember 18, 2010

Topics

• The Daily Deal Phenomenon • Small Business Viewpoint• Daily Deals: Fast Forward• Local Media Playbook

Straw Poll

Which best describes your view of Daily Deals?

A. It’s an over-hyped model that is great for desperate times, but it’s not sustainable

B. It’s a foundational shift, that is a BIG part of the future of local shopping

Daily Deal Phenomenon

• Gross Revenue pacing at ~$1B, $2B 2011– GroupOn fastest growth tech company, ever– $600M from a few thousand local SMB’s

• 150-200 daily deal sites, 400+ deals/day– Every local media co entering in some form– Scaling internationally

• 40K+ businesses in deal distribution queue• 15+ startups aggregating deals

The Success Formula

• Struck a chord of pent-up consumer desire– Get out again, without the expense of 2008– Hip to save, remove the embarrassment of coupons– “Group” key to concept/brand, now tangential

• Struck a chord of SMB local lead frustration– Complexity & mediocrity of media and search– Zero risk model

• Perfect storm of timing (economy, social) + brand

SMALL BUSINESS VIEWPOINT

SMB Love Fest?

Lead GenerationSuccess

Pre-paid CustomersZero Risk

Deep Margin Cut

Drive By Customer

Quantity& Timing Control

SMB Viewpoint

We Love This We Hate This

No Customer List

Deal Design: Refinement, Complexity, Noise

DAILY DEALS: FAST FORWARD

SMB Social Marketing & Deals

• Consumers follow businesses for special treatment

• Deals/customer special events as mainstream social participation

• Emerging picture:– Brand/conversationalists (edge)– Lead marketing (scale)– Value-added intermediation

(mainstream)

RazorFish October 2009 Study

Key Shifts in Process

Promotion Types & Use

Cases

Distribution

Self-serve

Deals Morph with Mobile & Social: Live Social Marketing

• Promotion Use Case Expansion– Casual offers: enticements to visit– Events & activity announcements– Social offers: friends/neighbor behavior– Return visit loyalty – Networked appointment bookings

• Real Time, Any Time: Yield Management– Live publishing– Mobile search & personalized discovery

Deal Distribution: Silo > Ubiquity

• Live Search Tags• Live Display Feed/Ads• Daily Deal Campaigns• API: Consumer Apps/Sites

• Feed Distribution to Maps, Search,

Social, LBS Partners• API/Dev Programs

Self-serve Aims for Mainstream

• GroupOn• Facebook Deals• Google Places Offers• Foursquare• Yelp• Twitter?• Closely ;)

Dashboard

Remote Control

The Big Ideas

• Pre-paid purchase model could be foundational

• Live social marketing can evolve to yield management for local.

• Offer content is a new shopping content layer, akin to Reviews.

Local Media Playbook?

Value-added Aggregation of Local Offers. Search Tags. Live Offer Display. Website Widget.

Package to Your Strengths.

1. Zero in on Social Promotion2. Package & Simplify Distribution3. Instigate the SMB Social Graph

Thank You!

Perry EvansClosely, Inc.

perry.evans@closely.comTwitter: @perryevans

Mobile: +303-550-1205