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3 Secrets of Multi-Channel MarketingLESSONS FROM GROUPON’S STRATEGY FOR INCREASING REVENUE PER EMAIL

OVER 200 COMPANIES COMPETE IN THE DAILY DEAL SPACE IN THE USA ALONE.

Yet Groupon maintains a leading competitive edge in their core business whilst expanding into other markets. What can other deal sites adopt from Groupon’s marketing approach?

53% of Canadians are familiar with at least one deal site.

42% of these Canadians joined deal sites in order to receive daily offers via email.

1,000,000,000monthly Groupon emails.

53% 42%

September 6, 2012Globe and Mail, Canada loves daily deal sites, even more than U.S.: Survey

June 24, 2011Email Expert, Groupon Email Delivery Speed Increases by 40% with Certification

February 20, 2014Recode, Groupon Crushes

Q4 Estimates, but Mixed Forecast Drags Down Stock

Groupon, Groupon Q4 2013 Public Fact Summary

February 25, 2014Brian Nichols, The Motley

Fool, Could Groupon Be the Next Netflix?

Risks & Operations

“Our business depends on our ability to maintain and

scale the network infrastructure necessary to send our

emails and operate our websites, mobile applications

and transaction processing systems, and any significant

disruption in service on our email infrastructure, websites,

mobile applications or transaction processing systems

could result in a loss of subscribers, customers or

merchants.

If our emails are not delivered and accepted, or are routed

by email providers in a less favorable way than other

emails, our business may be substantially harmed.”

according to groupon’s management discussion and analysis of financial condition and results of operations

THE RISKS TO GROUPON’S BUSINESS

Groupon, Groupon Annual Report 2013

Challenges

Opportunities

Benefit

Invest in multichannel

marketing

Internet trends and changes (ISP

changes like Gmail introducing

tabs in 2013, CASL 2014)

TRENDS AND CHANGES MOBILE COMMERCE MARKETING FATIGUE Mobile commerce will make up

29% of web sales this year and

today nearly half of all email is

opened on a mobile device

Customers eventually begin to

ignore due to excess marketing

ads (i.e. The Law of Shitty

Clickthroughs)

Sales and loyalty improve when customers receive fewer and more relevant offers

Develop email solution in-

house

Optimize deliverability1 2 3

February 20, 2014Recode, Why Groupon’s Gmail Problem May Be A Good Thing

May 13, 2014Internet Retailer, US M-commerce Will Make Up 29% of Web Sales This Year

June 12, 2014Marketing Land, Report: Climbing To 48%, Mobile Email Open Rates Nearly Overtake Desktop in 2013

(1) Develop email solution in-house

License a messaging solution on a per-customer-record pricing model instead

CPM: Cost per thousand messages sent

APPLICATION APPROACH

Custom build a sending system in-house

• Extra security of having entire database in-

house

• Cloud servers like Amazon Virtual Private Cloud

(VPC) provide the same security and integration

options as on-premise plus speed and superior

economics

• Build in feedback loop through surveys and

analytics for better defined segments and

greater personalization

Nearly all large-volume senders pay ESP vendors

on a CPM model, essentially trusting their most

valuable asset — their email list — to a third party

sender. For Groupon, developing Mindstorm helps

broaden the relevance of emails and optimize

revenue per email.

“The decrease in cost of revenue was primarily

driven by reduced email distribution costs,

primarily due to the migration to an internal

email distribution platform.

GROUPON ANNUAL REPORT, 2013

Is optimal send time the same across different segments? Deal sites release limited-time and location-specific

offers, making timing and inbox placement critical to

conversion optimization. Groupon uses Smart Deals email

personalization to customize the deals subscribers receive

every day and includes input subscribers can submit on their

interests and curiosities.

Personalizing content to micro-segments, through a

combination of analytics and feedback, lessens the junk

subscribers have learned to ignore.

CUSTOMER DEMOGRAPHICS

DATA IS KEY TO IMPROVING RELEVANCE 73%

61%

25%

are women, who are key to reaching families where they’re often primary household decision makers

have college education and 20% have a graduate degree

have an annual household income above $100,000

Groupon, Groupon Annual Report 2013

(2) Optimize deliverability

Certification, monitoring solutions and customized

consulting may sound excessive, especially since

email is only one acquisition channel within a

marketing mix — but for volume senders, like

Groupon, even a 6% difference in CTR is extremely

valuable.

Factors Impacting Deliverability:

Managing campaigns across multiple ESPs with

a seed-based deliverability monitor allows you

to test local ESPs in international markets and

optimize send speed.

Experimenting with multiple vendors and SMTP

relays increases email marketing performance

because different ESPs may experience different

soft bounce rates depending on the ISP of the

email recipient.

APPLICATION APPROACH

• ISP throttling (delivery speeds were slowed

down by receiving servers)

• Delivery performance per IP address and per

location in the world

• Send speed times

• Optimizing for inbox placement between 6 and

9am locally across the world

Return Path, Groupon Case Study

Example of an ISP: Gmail, Outlook, Yahoo

(3) Invest in multichannel marketingAPPLICATION APPROACH

Mobile is everywhere. To lead as a mobile-first

company Groupon had to invest in acquisition

methods beyond email. User experience is central

to their m-commerce and merchant apps and

reflects in 5-star user ratings. To date, over 70

million people have downloaded a Groupon mobile

app.

Make customers feel recognized with relevant content and experiences

• Markets categories of deals rather than just

one per email

• Reward loyalty within transactional emails

• Map the buying experience across all channels

• Use customer data to deploy triggered

campaigns across email, mobile push and SMS

• Provide transparent, helpful and authentic

support through all channels

Coordinate communication across channels, devices, and activities

Real-time responsiveness

Mobile customers continue to be more engaged than web-only customers, purchasing more frequently and spending more.

50% of global transactions were completed on a mobile device as of December 2013.

Groupon, Groupon Annual Report 2013

“

ERIC LEFKOFSKY, CHAIRMAN OF GROUPON

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We still send far too many irrelevant emails. That’ll change in 2014.

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