Facebook (3) | Groupon in Retrospect

Sawickipedia: I’ve heard anecdotally lots of stories about businesses who’ve been burned by the group discount providers like Groupon, et al.  And this certainly tempered my long term enthusiasm for the concept as a marketer. 

Honestly I think we are in the Web1.0 bubble days for group discounts much the way advertisers were in the bubble days paying $100 cpm’s for crap yahoo inventory that today sells for $1 cpm. 

What I mean is that group-discounts with the groupon model have a place in the online/cust acquisition marketing tool-kit of businesses. But like online advertising it works well for certain folks and not for others.  I fully expect after the group-discount bubble bursts - the space will dramatically shrink much like online advertising did from 2000 to 2002.  And then as businesses understand what works and what doesn’t it will build up again.

That being said, businesses please beware the siren song of groupon.

[I think the groupon biz model is genius and innovative so I am not saying as a company or business model groupon won’t be LT hugely successful just that as a tactic for individual businesses it is not a panacea]