Groupon and Google Scraping the local advertising market

Groupon and Google Scraping the local advertising market

December 6, message, according to foreign media reports, the Groupon refused Google60 billion acquisition offer is a bit crazy, or a few years it will value the number of times the current price? it is clear that these are not known. But if Google and the takeover game to Groupon explain something, it is the local advertising market will promote the huge growth of online advertising — and this and other forms of online advertising is not the same.

Google to acquire Groupon just because of its amazing growth rate — Groupon currently to year growth rate of 20 billion to the local merchants sell coupons, and more importantly Groupon currently used by the payment by results (Pay-For-Performance) mode. This mode only when someone Groupon buy coupons before they make money, like must someone clicks on the advertisement page, Google is making money is the same reason. Groupon already solved for local businesses advertise on the Internet. Now more and more is that these businesses are choosing in Google or spend on the Groupon their advertising budget.

Maybe you think Groupon is not an advertising company, but most businesses significant rational choice so discount transactions (typically a 30% discount to 50% off) mode shows they have this as a marketing expense. This is a proven ability to effectively attract consumers enter their shops, SPA or hotel. Perhaps the first time in consumer patronage is losing money, but it is necessary to attract new customers. The money came from their marketing budgets.

For local merchants, Google and compete for the same Groupon is in the money, they are trying to steal the yellow pages, newspaper, outdoor billboards and money. Billions of dollars of offline advertising makes online advertising relating to the acquisition of shares to shame.Already in the online advertising to local businesses, they can buy search keywords or by offering coupons to Groupon to attract new customers. The new line to offline advertising model is struggling to keep up with, and Google wants all of online advertising. While the local operational on Google, you may be a substantial growth.

However, this business is the key to control the transaction list anyone. Complete the relevant transactions Groupon through local sales force, and other collaborative Web distribution partners, and now you can let merchants set up its own self-service transactions to complete. Control and completes the transaction, the more it will come up with more ways of distributing these transactions.

Of course, Google can introduce their own day-to-day transactions advertising sector and employment for thousands of additional local sales staff to attract trading, or make all self-help — spending is likely to be far less than US $ 6 billion. But this takes time, and not necessarily to do.

At the same time, the Groupon also will continue to expand, the company will be on their businesses on their business models to hundreds of clone, this will be a competition is very fierce, but truly meaningful player does a lot. At present, even if it is the second daily trading site also vary with the Groupon LivingSocial, which is the first of at least two to four times the size.