September 21, 2012

GroupOn’s Huge Cut in Ad Spend in Q3-2012

GroupOn‘s huge cuts in ad spend in Q3-2012.

source: MixRank

MixRank tracks online ads by over 600,000 advertisers and have a good insight into the amount of advertising being done.

Per MixRank, GroupOn has cut its online ad spend by over 80% in Q3-2012. The reduced spend started in July 1 2012. 
Our ad performance data shows that Groupon (NASDAQ:GRPN) has cut spending on US-targeted display and contextual ads more than 80% in the past few months- a staggering cut for a company spending $100 million a month on advertising.
This data is just one signal, and it could have several explanations. Maybe Groupon has saturated the daily deals market in the United States and is shifting spending overseas. Or maybe Groupon's revenues for the next quarter are lower than the market's expectations, and executives made the decision to cut marketing spending further to reach profitability.

Or maybe Groupon just isn't that interested in daily deals anymore.

GroupOn ads have been one of the most creative online ads.

LivingSocial, a GroupOn competitor, is also said to be going through tough times.

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