Groupon ad shows that “wait-and-see” can beat “jerk-the-knee”

Posted on February 8, 2011 11:02 am by | Advertising | Social Media

One of the great benefits of the real-time web—instant feedback—is also one of its hazards. People react oh-so-quickly to anything that tweaks them the wrong way. Circumspection and patience are words that may vanish from the lexicon. On the other hand, we now know what hundreds of thousands of knees jerking simultaneously sounds like.

It happens when companies introduce new logos, start blogging or tweeeting, or make acquisitions. With few facts and a gutful of emotion, we rip into what we see, often jumping on a bandwagon already teetering under the weight of the me-too crowd. The Judgment Rush is so fast it makes the Gold Rush look downright glacial by comparison.

The latest example (unless something has happened while I’ve been occupied writing this post) is the Groupon commercial that aired during Sunday’s Super Bowl. To read the savage criticisms, you’d think that Groupon pranked the Dalai Lama rather than point to the challenges facing Tibet as a segue into a pitch for the company’s services, using a Chicago-based Tibetan restaurant as an example.

Groupon Spot

(Groupon actually aired three commercials—the Tibet spot with Timothy Hutton, one on the rainforest with Elizabeth Hurley and a third promoting the save-the-whales effort with Cuba Gooding, Jr. And while all took the same approach, the Tibet spot is the one that generated all the heat.)

To be fair, the commercial does minimize the suffering in Tibet. It’s interesting, though, that while the backlash in the U.S. was severe enough to bring Groupon’s unsubscribe service to its knees, the Chinese saw it differently, reacting harshly to the characterization of Tibet as a country where “the people are in trouble and the very culture is in jeopardy.”

But it’s also worth examining the real fallout from the ad, paid for by a company that has its roots in social causes and continues to be a standout when it comes to corporate social responsibility:

  • The ad resulted in 50,000 new customers joining Groupon, according to MDC Partners Chairman and CEO Miles Nadal, which owns ad creator Crispin Porter. CNBC quotes Nadal saying, “(Groupon has) over 50,000 new customers that have come on board since the ad ran, so its actually drawing the kind of business performance that we expected it to.” If you don’t measure the success of a communication based on the objectives you set for it, how do you measure it?

  • The subsequent coverage of the fallout from the ad has led far more people to learn about Groupon’s socially-conscious roots than would ever have known about it otherwise. Virtually every article covering the kerfuffle recounts the company’s origin as The Point, a service designed to support the success of non-profit campaigns. The company will probably wind up with a better reputation in the long run as a result of the commercial, not a worse one.

  • Can you name one effort that has heighened awareness of the crisis in Tibet more than the commercial that offended so many people? As Huffington Post blogger Disgrasian noted, “...after they aired that Super Bowl ad about Tibetans-being-oppressed-but-who-gives-a-shit-when-we-can-save-money (above), we’re actually talking about Tibet today. And when’s the last time anyone talked about Tibet? At a Bjork concert in 2008? Groupon’s made Tibet hip to talk about again! I mean, sure, talk is cheap, but so are things you buy with Groupons!”

Within hours of the ad airing, the blogosphere was filled to brimming with posts about what Groupon needed to do to correct the situation. Some of the advice was good, even great, but Groupon didn’t need the help, thanks very much. They’ve been promoting the fact that the ad was tied to The Tibet Fund; Groupon is matching donations up to $100,000. The Tibet Fund wasn’t the only NGOs to lend their support to the campaign; others included Greenpeace, buildOn, and the Rainforest Action Network.

The company has also been

blogging actively and engaging in the conversation by throwing out kick-starters like this:

When we think about commercials that offend us, we think of those that glorify antisocial behavior – like the scores of Super Bowl ads that are built around the crass objectification of women. Unlike those ads, no one walks away from our commercials taking the causes we highlighted less seriously. Not a single person watched our ad and concluded that it’s cool to kill whales. In fact—and this is part of the reason we ran them—they have the opposite effect.

I’m not suggesting the ads were not ill-conceived. But the result isn’t as devestating as so many hurried to predict, partly because Groupon’s heart was in the right place, partly because there were unintended consequences (like greater awareness), partly because some people actually liked the ads and partly because, like them or not, they led a boatload of people to become Groupon customers.

Waiting to see how things shake out rather than reacting immediately can be an excellent strategy.

 

Comments

  • 1.Shel, this is one of those rare times I have to at least challenge some of your points. First, I want to see the net additional subscribers, from a credible source, not the fox guarding the proverbial hen house. Given how many of us unsubscribed. I would argue that the airing of alot of dirty laundry about how Groupon had been bad for some businesses, and a waste of time for subscribers, probalby will damage them with the business community.The Nielsen numbers show that it didn't help name recognition. And their contributions appeared to many to be lame compared to the overall cost of the ads -- in excess of $5 million to air and produce.
    So yes, they got buzz, but did it really help?

    KDPaine | June 2011 | Berlin, NH

  • 2.Katie, what fun would it be if we agreed ALL the time? At least nobody's using AVEs to gauge the success of the campaign!

    I'd like to see net additional subscribers, too, but ultimately I'm more interested in long- rather than short-term benefits. If the whole kefuffle winds up, in the long run, positioning Groupon as a socially conscious company that is serious about the causes it supports, then it was probably worth every penny and new customers who care about CSR will far outnumber those who bolted because of a visceral reaction to the ad. And because of all the awareness of their sincere support of causes, I suspect that will be the upshot of the whole mess.

    Shel Holtz | June 2011 | Concord, CA

  • 3.Shel, I have to go with Katie here, and go a step beyond. You ask, "If you don’t measure the success of a communication based on the objectives you set for it, how do you measure it?" Surely the answer must be net effect, not even simply net additional subscribers. I realize that such potential results as lawsuits aren't in play in this case, but there are certainly ways a communication can meet its narrowly defined objectives and still harm a company.

    However, this quibble with one statement doesn't change my overall view of the Groupon case, where I think the long-run result is likely to bear you out.

    Max Christian Hansen | June 2011 | Sacramento County

  • 4.I have to agree with the voices of dissent. We have no idea how many people unsubscribed. I did, and I know many others did, too. Plus there are the long term results of the negative hits in Google.

    AND frankly from a CSR standpoint, Groupon flat out failed. They failed to strengthen their brand, that's a huge loss of money. They failed to paint themselves as compassionate, a massive fail for a company that started as a nonprofit services org. Lastly, they failed to distinguish themselves. Groupon gave its competitor LivingSocial a halo by acting like jerks. This was not a win no matter how much lipstick you put on a the pig.

    Geoff Livingston | June 2011

  • 5.Gee, Geoff, I thought mine was the voice of dissent!

    I think you've joined the crowd that has rushed to judgment in your view of how Groupon "failed." Whether that's true or not has yet to be determined, since the longer-term impact appears to be a LOT of coverage of the company's history of CSR. There was an initial surge of people unsubscribing, but the longer term may well show far more people signing up as they learn of the company's storied socially-conscious history.

    I also find it fascinating that the same people who are always out there arguing that companies need to take risks and that it's okay to fail are the first ones to unsubscribe or otherwise punish the company when they DO take a risk and fail. I DIDN'T unsubscribe because one mistake isn't enough for me to erase the good the company has done and will most likely continue to do. If it were a pattern of behavior or reflective of a culture of cynicism toward social causes, that might be a different story, but that simply isn't the case with this company.

    Shel Holtz | June 2011 | Concord, CA

  • 6.Shel... I'm both a Groupon subscriber and one of those tree-huggers with a "Free Tibet" sticker on my car and I have to say that I totally appreciate your calm, clear argument in favor of waiting to see how things shake out instead of having a knee-jerk reaction. We see how well that's worked for organizations in the past! Thanks! :)

    Pam Vozza | June 2011 | Phoenix, AZ

  • 7.Shel,

    Interesting blog today. I read it because not only was I offended by the Tibet ad, I also had a negative reaction to the whale ad when I saw it last night.

    Your piece gave me a lot more background on Groupon. I had no idea they were supporting Tibet or that they had their origins in socially responsible activity.

    That said, the whale ad left me with negative feelings about Groupon as did the Tibet ad. Because of the premise of the ads, they are
    making light of the causes they supposedly support.

    It is one thing for a shock jock or negative comedian/comedienne to say offensive things - Stern, Rivers, etc built their reputations on
    that kind of thing and they are funny.

    But Groupon did not have that kind of reputation and it is shocking, and not in a good way, to be exposed to it. You mention the positive
    aspects that come from the subsequent social media conversation. The CEO cites 50,000 new members.

    But what about the existing Groupon users like myself who were turned off and are left with lingering doubt? Kenneth Cole will easily
    overcome his mistweet because he has a long standing reputation for social consciousness and it was a bad decision made in haste.

    Groupon on the other hand committed a lot of resources to creating a high profile campaign and then placed it during the Super Bowl. It causes me to doubt the decisions being made by their leadership. On top of the fact that they seemed to have turned down a once in a lifetime buyout
    opportunity a few months ago.

    Given the opportunity I would not invest in Groupon and I am doubtful as to whether I will patronize Groupon in the future.

    My two cents. But again, thanks for giving me more background on the subject.

    John Fredette | June 2011 | Raleigh, NC

  • 8.The ad is offensive - true. It has increased conversation about ongoing struggles in Tibet - true. This will cause medium-term problems in the Groupon brand - the genuiness of their response coupled with their ability to provide value to customers is what will win the day. But it will be a long row to hoe.

    Cassandra Stalzer | June 2011 | Anchorage

  • 9.Cassandra, my question then is why would Groupon put themselves in a position where they have to climb out of a hole that they themselves dug? They went to great effort and expense knowing they were taking a big risk. Yes, we are among those Monday morning quarterbacking their decision and we understand their true position. But we are, I suspect, a small minority. Were they hoping to get the BIG media attention that has gone to Christina for flubbing the lyrics?

    John Fredette | June 2011 | Raleigh, NC

  • 10.Great conversation! I have to add in one more thought, here. In my business, one of the things that we measure is the "communal" nature of relationships. In other words, when I have a communal relationships with a company, I want them to succeed because they help make me successful. The oppoosite is an "exchange" relationship -- where it is a purely transactional one.
    My take on all of this is that alot of people's relationships with Groupon switched from communal to exchange, at least that's the case for me. A year ago they were a cool little start up that got me some great deals and I wanted them to do well. After this fiasco, I no longer want Groupon to succeed. I don't like their methods, I don't like how they spent their money, I don't like their tastem and I am no longer interested in helping them be successful.What's that worth in $$. Ultimately, it leaves them more susceptible to law suits, investigations, and makes it more expansive for them to win new customers.

    KDPaine | June 2011 | Berlin, NH

  • 11.I had a brief Facebook conversation on this topic with a friend in advertising. He speculated that Groupon has already likely launched an agency review. Certainly Crispin, Porter + Bogusky bear a certain amount of blame. Timothy Hutton, please. But ultimately Groupon said yes and they will bear the burden of that decision.

    John Fredette | June 2011 | Raleigh, NC

  • 12.Katie, this is a great conversation indeed. Which of us is going to mark his/her calendar for some date in the future and revisit this, to determine who wins? And I don't mean simply so Shel can gloat, or so you can gloat. I mean does Groupon win or lose? I see important meta-questions here, like, in six months will there be enough publicly available data by which other companies can know what lesson they should be learning from this? Or will this have to be forever a matter of opinion and conjecture?

    Max Christian Hansen | June 2011 | Sacramento County

  • 13.John - I think KD makes a good point, the people who make purchasing decisions based (at least in part) on a business's philosophy and/or practices and the feeling of relationship that they engender probably see a deep hole. Those who make decisions based mostly on price-point probably care less (and isn't Groupon all about price point?). It's an insensitive ad....but if they continue to provide value like the two-for-one cupcake, there is a large segment of the population who will happily become customers. Not me, btw.

    Cassandra Stalzer | June 2011 | Anchorage

  • 14.I say lets revisit this a year from now and see if Groupon still exists and if so, in what form.

    KDPaine | June 2011 | Berlin, NH

  • 15.As we await Groupon's fate, it's important to remember that this incident isn't the only thing that could doom the company. Another -- and probably one that is a more imminent threat -- is how easily copied Groupon's business model is. When the company rejected Google's $6 billion bid (an act of unparalleled stupidity, in my humble opinion), Google responded almost immediately by announcing they were creating their own version. And there are several other competitors springing up, some specialized. For instance, have you seen http://www.jewpon.com? Yep, it's the very same concept for kosher, Judaica and other Jewish goods and services. So if Groupon isn't around in a year, it'll be important to understand the actual cause before passing judgment!

    Shel Holtz | June 2011 | Concord, CA

  • 16.Shel, I agree. Groupon's problematic Super Bowl ads are not likely to be the cause of the company's downfall. It is, however, indicative of a bad decision making process at the highest level and that is likely to be a fatal flaw.

    John Fredette | June 2011 | Raleigh, NC

  • 17.I know we have moved on with our lifes but I wanted to share something I just learned about the Groupon ads. They were the work of CHristopher Guest. That explains a lot about the style etc. If they had each been identified as "A Short Film by Christopher Guest" people would have been prepared to see something satirical.

    That no doubt explains why the people on the agency/client side were so blinded to the potential negative impact. Christopher Guest created Spinal Tap, he spoofs dog shows, he is a member of the British aristocracy, he was Tony Curtis' son in law, he is brilliant.

    Unfortunately, it seems that Christopher's brilliance needs more than 30 seconds to be established.

    He should do a film about this whole event and its aftermath. That I would pay to see.

    John Fredette | June 2011 | Raleigh, NC

  • 18.FYI, AdAge is claiming that Groupon has gained customers as a result of the ad, business partners are happy, and the charitable organizations with whom they partnered are standing by the company. Their conclusion seems to be that the advertising kerfuffle won't hurt them in the long run.
    http://adage.com/article?article_id=148860

    Shel Holtz | June 2011 | Las Vegas, NV

  • 19.MMMMMMM. I'm not sure, but if the best you can say after investing three million in a 30 second slot and who knows how much on creative involving a lot of names is that you didn't do any long-term damage - then something went terribly wrong!

    John Fredette | June 2011 | Raleigh, NC

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