Shaun Gregory, managing director, O2 Media
Shaun Gregory, managing director, O2 Media
A view from Shaun Gregory

Think BR: The clock is already ticking on deals that don't engage

While Groupon's new location-based offering could push daily deals to the forefront of clients' minds, it is not quite the perfect package, writes Shaun Gregory, managing director, O2 Media.

I recently saw some really interesting research on the growth of daily deals that got me thinking about location-based marketing and its potential for growth - not that it takes a lot to get me thinking about location-based marketing.

It has some really interesting stats about which deals company has the best brand recognition; Groupon 56%, eBay Daily Deals 30% and kgbdeals 19%; who is using it - women are much more likely to have registered on a daily deal site at 72% vs 61% of men; and what they’re buying - entertainment and event tickets (34%) electronics (27%), clothing (26%) and dining (25%).   

All of this is great news for our industry.

I know the stock response of competitors is to say that any competition is good (especially when the reality is that it is going to cannibalise their own business), but this development is going to make consumers and advertisers open their eyes to offers.

However, what makes this research really interesting is the introduction of Groupon Now - the company’s location-based offering that is being tested in a handful of US Cities - and how this will affect consumers’ perceptions of daily deals.

Basically, Groupon Now grabs the whole daily deals business model and turns it on its head by taking a one dimensional offering and making it localised and in real-time. 

Once it becomes more established over here it’s going to make a lot of clients sit up and take notice of real-time, location-based services.

The new premise is a clever development on the old model. Like 02's Priority Moments service, customers receive deals and offers on the basis of their location. 

However, what makes it really interesting is that the individual offers have much smaller time limits in which to be redeemed - sometimes only minutes.

These are displayed as a ticking timer countdown when users open the map links.

This is an almost Jack Bauer-like level of consumer engagement and I can almost see hungry people racing around city streets iPhone in hand, staring at a clock ticking down and looking desperately for that BOGOF burger deal.

However, it isn’t the perfect package.

What it doesn’t have is a strong customer relationship. When the daily deal and location-based markets eventually begin to become engorged and bloated it will be the companies that have this sort of customer knowledge, insight and personal brand affection that will win out.

Just because he’s standing next to a salon, there’s no point sending an offer on Brazilian blow-drys to a 25-year-old man, for example.

Where the operators have the reach and data to be able to target people in the right place, at the right time and in the right mood, the Groupon way of thinking is simply "I’m looking for something".

There is no real engagement in the offering. Groupon is about quick gratification - what consumers ultimately want is long term engagement.

As well as money off a meal or DVD player consumers now want to be offered something better, something more targeted with deeper engagement and greater value to them as people.

Two years ago the talk was about whether location and real-time could work, now it’s been proven the talk is about how you successfully engage the consumer without ruining the relationship the consumer has with the brand.

Shaun Gregory, managing director, O2 Media