Valpak’s Michael Vivio talks Valpak digital, Groupon, and the future of couponing.
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07
Nov
Valpak and the future of couponing.
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“Alright, you caught us. We’re actually not making any money. In fact, we are really losing a lot of money.”
This is the essence of Groupon’s declaration last week that it will remove the controversial accounting metric called Adjusted Consolidated Segment Operating Income (ACSOI) from its financial statements. ACSOI essentially measures Groupon’s profits before subtracting its subscriber-acquisition costs and stock option-based compensation. The metric was an attempt to put a thin veneer of respectability on what are extremely disconcerting profitability numbers for the company. In the first quarter of 2011, Groupon posted a net loss of $113.9 million. Yet, the company reported ASCOI of positive $80.1 million. In most recent quarter, Groupon’s losses continued to mount as it begrudgingly abandoned the ACSOI metric amidst criticism and incredulity from the SEC.
But what is most interesting about its emphasis on the ACSOI metric is that, deep down, Groupon knows what we all know: good investments are profitable investments. It was simply not enough for the firm to report earnings and explain that it was investing for growth. Rather, Groupon felt the need to include a metric of profitability, no matter how contrived, that was actually positive.
http://blogs.hbr.org/cs/2011/08/groupon_doomed_by_too_much_of.html#.TkuupP4XcRc.email
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Great article found from The Squeaky Blog. Click the blog link for full article.
Chicago-based start-up, Groupon has taken the world by storm with their daily deals, offering consumers deep discounts from featured retailers. But is their business strategy focused less on the merchants who offer these deals and more on their own profits? We’ll begin this post with an example of a Groupon offer hurting a business and follow it up with an example of how it has helped a business in order to try and determine what can be done to create a mutual benefit for consumers, merchants and Groupon.
Click Here to read the full article: The Squeaky Blog.
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This is an excerpt below from a great article on Groupon. Click the link at the bottom to read the full article at TechCrunch.
Editor’s note:This guest post is part of an in-depth series looking at the daily deal industry written by Rocky Agrawal, an entrepreneur who has worked on local products since 1995. Read Part I, Part II, and Part III also. He blogs at reDesign and Tweets @rakeshlobster
Imagine you’re a small business owner. You have to choose between two propositions:
- You can pay $62,500 for marketing. You’ll get a whole lot of customers coming through your door. No guarantees if they will ever come back, but they’ll come once.
- I’ll pay you $21,000. You get $7,000 in about 5 days, another $7,000 in 30 days and the remainder in 60 days. In exchange, you’ll give my customers cheap products for the next year.
I’ve been working on local for a long time and I know it’s hard to get small businesses to spend money on advertising. Really hard. Even getting $200 a month ($2,400 a year) is a high hurdle to meet.
There’s no way a business will sign up for #1. Most merchants would laugh you out of the store if you asked for $60,000.
Except they are. In droves.
Although they sound completely different, #1 and #2 are really the same—it’s the Groupon business model.
READ THE FULL ARTICLE BELOW
Why Groupon Is Poised For Collapse.
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26
May
Coupons for Business | Best Daily Deals | Business News Daily
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With all of the “Deal of the Day” sites like Groupon popping up selling off gift cards at half their face Value, the question of profitability often arises. Here is a good article weighing the options for advertisers.
Click below to read the article at Business News Daily.
Coupons for Business | Best Daily Deals | Business News Daily.
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A third of businesses don’t make money from promotions on socially charged buying site Groupon, says a new study. Consumers who use the deal-of-the-day web site don’t make return visits to the businesses offering discounts, don’t spend much and don’t tip well, says the study from Rice University’s Jesse H. Jones Graduate School of Business.
via Study: One Third of Businesses Don’t Profit from Groupon Deal.
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