Groupon reins in marketing spend as it reports loss of $42.7m

Groupon: daily deals service cuts back on marketing spend
Groupon: daily deals service cuts back on marketing spend

Groupon has cut its marketing spend by nearly $50m in the three months to 31 December 2011 and reports a net loss of $42.7m (£27m) in its first set of financial figures since it floated last year.

Groupon cut marketing spend from $200.9m (£126.3m) to $156.4m (£98.4m) in the quarter, compared to same period in the previous year.

The cut came despite the voucher company launching its first UK TV ad campaign in the period, as it moved to up the ante in the daily deals space.

The marketing spend reduction can be attributed to its decision to focus on encouraging existing customers to make repeat purchases, rather than attracting new customers.

Groupon also today (9 February) revealed it is working on features to make the deals it sends to customers more personalised.

The company's results show that it reported a net loss of $42.7m (£26.9m), compared to a net loss of $378.6m (£238.1m) for the same period the previous year.

Revenue increased 194% to $506.5m (£381.5m) for the quarter, compared to $172.2m (£108.3m) the previous year.

Groupon did not break out revenues by region, but its revenues for its international operations, which include the UK, were $83.8m (£52.7m), up 279.2% from the previous year.

The company attributed the net loss to the costs associated with its new international operations

Last year, Groupon made headlines when it made the largest IPO by an internet business in the US since Google in 2004, which at the time was valued at nearly $13bn (£8.2bn).

According to reports the market was disappointed with the results, with concern mounting over Groupon's growth.

Groupon also reported a 275% year-on-year increase in active customer numbers, taking it to more than 33 million, for the fourth quarter ended 31 December.

Andrew Mason, chief executive of Groupon, said: "We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world."

Mason reportedly announced on a conference call to investors that Groupon would be rolling out more targeted deals in the first half of this year, which will be based on gender and interests, rather than simply location.

He said: "It allows us to say, 'Please stop sending me pole-dancing lessons'. That's been a much-requested feature." 

Mason's comments come in the same week the company announced it had bought data personalisation start-up Adku, for an undisclosed sum.

Follow Sarah Shearman on Twitter @Shearmans


Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer