In the end the company sold 1.3 million Amazon gift cards, worth more than $26 million face value:
My screen here shows that it was shared on Facebook more than 45K times. It’s not clear how many new subscribers the company achieved. Certainly it provided huge publicity and visibility for LivingSocial and its brand at the very least.
Trying to get in on the fun was the self-professed “number 3″ deals provider Tippr, which owns the old Mercata patents and will soon (if not already) demanding licensing fees and making trouble for Groupon and LivingSocial among others in the segment. In a kind of sour grapes post that was clearly intended to garner attention and steal some of LivingSocial’s thunder, Tippr CEO Martin Tobias argued that LivingSocial’s limits were being circumvented and people were buying multiple gift cards.
Regardless of whether there’s any truth to the claims in Tobias’ post it was a very calculated effort to gain some coverage and discredit a competitor.
Earlier this month LivingSocial reportedly discontinued affiliate relationships with “deal aggregators,” whose primary business is/was to collect and redistribute daily deals from multiple sources. I haven’t done systematic checking on this but looking at The Dealmap as a marquee deals aggregator . . . LivingSocial is still present:
January 20th, 2011 at 2:21 pm
Greg,
I’d love to know if you have any data on who bore the cost.
On first notice it seemed to me a pretty great marketing move by LivingSocial, but if it cost them even a quarter of the overall value it was about equal to a Super Bowl ad.
Would love to see an update when that info is available. Clearly a 1/2 off Amazon gift card is a great way to buy some of the attention away from Groupon.
Will
January 20th, 2011 at 2:30 pm
I don’t know and have seen nothing on that question. I could ask Tim O’S but he probably wouldn’t tell me.
My guess is that LS took less than its normal 50% because otherwise this would have been a big gift from Amazon. Speculating this might have been discussed as part of the investment or maybe this is a small piece of the investment in an “in-kind” form.
January 20th, 2011 at 3:40 pm
I was having this exact discussion with some friends last night. As you know, I think that even if it was LivingSocial spending $10MM to acquire 1.3MM customers (granted, we have no idea what percentage of those are NEW customers), plus the exposure that they got from this deal yesterday around teh interwebz and even offline, was well worth $10MM. It was a full day of nonstop viral marketing, as opposed to a 30-second spot in the Superbowl that will be forgotten by the time the Clydesdales show up again.
Let’s just speculate and say that half of the customers were new. So that’s 650K customers for $10MM. That’s about $15 a customer. I think Groupon is currently spending $10 in its ‘share-with-a-friend’ promotion. So that seems to be a pretty good price point. I would say for all of the additional exposure LS got from this yesterday an extra $5 a customer seems worth it.
January 20th, 2011 at 4:22 pm
That’s a huge move from Livingsocial to gain ground on Groupon.
10 million is a big amount. I’d rather think they maybe had a fixed price per customer acquired, some form of CPA/affiliate.
January 20th, 2011 at 4:24 pm
@David,
And, it was speculated in one of Greg’s earlier posts that Groupon is routinely spending $20.00 to acquire each new customer (Advertiser I think) so I guess you’re right that it’s not as crazy as I might think.
Will
January 20th, 2011 at 8:11 pm
[...] This post was mentioned on Twitter by Glenn Gabe, Greg Sterling, Will Scott, brad robertson, Jon Burns and others. Jon Burns said: LivingSocials Boffo Day -> http://www.screenwerk.com/2011/01/20/livingsocials-boffo-day/ [...]