Legendary ad man David Ogilvy once said, “I do not regard advertising as entertainment or an art form, but as a medium of information.” In today’s ad-cluttered world, it’s hard to believe anyone remembers his philosophy, but one new marketing venture seems to be on Ogilvy’s wavelength.
The website Groupon features daily deals–called Groupons–on things to do, see and eat in cities across the United States, Canada and Europe by partnering with local businesses and creating quirky write-ups about their services. The site currently boasts about 7 million subscribers in North America, and it serves 80 North American cities, 16 European countries and aims to have a presence in about 300 cities worldwide by the end of 2010.
“Our customers have come to rely on Groupon as a trusted guide to local businesses,” explains Julie Anne Mossler, Groupon’s PR manager. “It’s a way to get off your couch, explore your city–or someone else’s–and try things you haven’t done before.”
Businesses from every market niche appear on the site, including bakeries. Jess Berkwitz at Nashoba Brook Bakery in Concord, Mass., learned about Groupon from a business owner friend and contacted the company for details. She pitched the idea to Nashoba Brook Bakery’s owner, John D. Gates Jr., who expressed enthusiasm.
“Nashoba Brook Bakery has always shied away from direct advertising, so this online marketing endeavor was a very new and unprecedented experience,” Berkwitz says. “To be honest, we had no idea what sort of turnout to expect–we knew we have a great customer base in Boston, but we had no idea how many people would be interested in traveling to our suburban bakery in Concord.”
Almost 5,300 people bought the Nashoba Brook Bakery Groupon, which ran on the Boston edition of the site and offered customers $20 worth of slow-rise baked artisan breads for $5. Purchasers of the deal have a year in which to use it.
“We are first and foremost a bread company, so we designed our deal to feature our full artisan bread line,” Berkwitz explains. “We also wanted customers to have the opportunity to take home a variety of different loaves, so we made sure our Groupon could be redeemed over multiple visits.”
Each deal requires that a specified number of people sign up before the deal becomes official. When that number is reached, people have 24 hours to purchase the Groupon, unless the business has stipulated a deal limit, which caps the amount of Groupons sold. For bakeries worried about being overwhelmed, this may be a good strategy to keep demand manageable. Businesses also can limit how many Groupons a single person can purchase. Businesses don’t pay an upfront fee to Groupon for the service; instead, after the deal ends, the website takes a portion of the deal proceeds–typically half, though the rate can vary–and cuts the business a check for the remaining amount.
On the West Coast, 725 people bought Sweetness Bakery and Café’s “$10 for $20 worth of cupcakes, meals and more” deal.
“Groupon has been more valuable than any print advertising I’ve done–it brings people in the door, and even if people don’t buy your Groupon, they do see you on the site,” says Kay Krueger, the Portland, Ore., bakery’s owner. “I’ve had a few people tell me that they saw our Groupon but didn’t purchase it on time or saw that we had been on there after the fact.”
For more details about Groupon, visit www.grouponworks.com.
