LivingSocial Buys a Few Million Friends
| Advertising |
Hello. It’s nice to meet you. Wanna be friends? I mean life-long friends who will always need one another.
The most simplistic explanation of advertising is the desire to introduce a brand to a target audience. Brands go about this by creating awareness, enticing trial, building loyalty and, hopefully, enlisting brand ambassadors to help spread the gospel. In advertising we look at people’s wants and turn them into needs. Because when I need something, I buy it.
A great example of a company introducing themselves to potential customers was seen recently with LivingSocial. By now most everyone has heard of Groupon. If not for their group coupon offerings, then for their ability to decline a $6 billion buyout bid from the nice folks at Google.
LivingSocial is living in the world Groupon created and dominates, which leaves them playing a game of eating the big fish. On January 19th they upped the stakes by offering a $20 Amazon.com gift card for only $10. This was a departure for the company who primarily focuses on the local market offerings. But hey, everybody wants an Amazon.com gift card, so why not put it out there. Because when you can buy a $20 card for only $10, well, you absolutely need the card!
The most successful part of this promotion was the viral nature it took on. In other words, those who were already customers shared the offer with others. Meet your brand ambassadors.
So how did the offer end up doing? An astonishing 1.3 million people took advantage of the deal. While the jury is still out as to how much this may have cost LivingSocial (neither LivingSocial nor Amazon are offering financial terms), it can be hard to see this strategy as anything but a success. Many companies would gladly pay upwards of $13 million to garner this much attention and add “loyal” customers. For LivingSocial, they used a national platform to add customers who will now be presented with local offers from local merchants. Thus, LivingSocial has more leverage when selling their coupon offering to customers.
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