Groupon Relents

Four days after its offensive ad campaign began, Groupon did the right thing and pulled the plug. CEO Andrew Mason posted an apology on the company blog that was a vast improvement over the explanation he had posted two days earlier. The controversy was an expensive lesson for Groupon; in accepting full responsibility for running the campaign, Mason presumably absolved the agency of any blame. On the other hand, it may ultimately work out to be a worthwhile investment.

Some cynics (including on this blog) have suggested that this whole controversy was scripted for the purpose of creating awareness of the Groupon brand, which it certainly did. I personally don’t buy that the public outrage was anticipated or planned. I don’t think Groupon could have enlisted so many celebrities to lend their names to a program that was designed to offend. This was a mistake, and the company ultimately did the right thing in apologizing and walking away. It gets credit for credibility, humility and fallibility, which are all endearing traits. Groupon may actually get more goodwill lift out of this whole controversy than if it had run tasteful ads in the first place.

How Groupon Could REALLY Break the Mold

Groupon remained silent the second day after its offensive ad campaign ran on the Super Bowl. The Wall Street Journal quotes spokeswoman Julie Mossler as saying “we don’t really have anything else to say,” meaning that the defensive statement by founder Andrew Mason on the company blog on Monday would have to stand on its own.

Groupon is donating up to $100,000 to each of four charities whose causes were cited in the company’s ad campaign. That’s $400,000 (tax-deductible) against a Super Bowl Ad budget of at least $9 million, and that’s not counting all the media buys since then. So if Groupon has spent (conservatively) $10 million on media buys since Sunday and given $400,000 in matching donations to the causes it exploited, then its licensing costs amount to 4% of the total spend. Pretty good deal if you ask me. For a company that just raised $950 million in financing, it’s not even a rounding error.

Groupon likes to think of itself as working against the grain, so what if it REALLY broke the mold by challenging the model that has advertisers throwing absurd amounts of money at the TV networks for a football game every February? What if Groupon announced that it wouldn’t buy any Super Bowl advertising but would instead donate the $9 million ad budget as matching funds to those four charities? What if it further challenged the other big Super Bowl sponsors like GM, Coca-Cola and Annheuser-Busch to do the same? Do you think Groupon could get the same impact giving money to rainforests and Tibet as it got by sending the money to Rupert Murdoch?

I’m not sure, but it seems an interesting idea to explore, at least for an outfit that presents itself as a rule-breaker. How about breaking the rules of the world’s largest commercial stunt in the name of the environment and human rights while also challenging others in your community to do the same? Could it possibly have the same impact?

I’d sure like to see someone try it.

Groupon Digs the Hole Deeper

It’s been a little more than 24 hours since Groupon aired the most offensive advertising campaign in history, and the company’s response to the outpouring of negative commentary has been a textbook example of how not to handle a crisis.

The Groupon ads, which were intended to be parodies, used celebrities to stage mock public service announcements that ended in pitches for Groupon’s coupon service. In the day since the ads were aired, we’ve learned that the messages were intended to raise awareness of the causes that were mentioned and to stimulate giving to those charities. Too bad Groupon didn’t mention any of those noble goals in the commercials themselves.

I haven’t conducted a scientific analysis, but in monitoring the mainstream media coverage as well as the chatter on Twitter and Facebook today, it appeared to me that commentary was running about 80% negative on the campaign. As of this writing, there are more than 300 comments on the blog entry CEO Andrew Mason posted just before the ads debuted, the vast majority of them critical.

Mason finally posted a response to the outpouring of commentary today. Rather than admitting that the campaign was a failure, he attempted to defend it. “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.”

Actually, when I think about commercials that offend me, the image of Timothy Hutton using the suffering of the Tibetan people to sell direct marketing services will forever remain etched upon my mind. Andrew, you set a high-water mark for offensiveness. You’ve made the GoDaddy ads look like Dr. Seuss by comparison.

Mason goes on to explain why the ads are clever and innovative. Unfortunately, anyone knows that it’s pointless to explain a joke. If people don’t get the joke in the first place, then attempting to tell people why it’s funny just looks pathetic at best and arrogant at worst.

I don’t know who counsels Groupon about public relations. Its press releases cite Julie Mossler, who appears to be an employee, as the contact. This company clearly needs some help in crisis communications, though. Any experienced counsel would tell Groupon to apologize, make good with its critics and put this problem behind it as quickly as possible.

However, Groupon appears to be committed to moving ahead with this campaign. It’s tweaking the endings of the ads to make the tie-ins to charities clearer, and I suppose that helps a little. But it doesn’t change that fact that this campaign is tasteless, unfunny and now only borderline offensive.  It is vaguely reminiscent of the sock-puppet ads of the late 90s, the difference being that the sock puppet was at least amusing. These ads aren’t, and Groupon would be well advised to run screaming from them as quickly as possible.

Here’s another thigh-slapper from the video series for your amusement. Deforestation is a great tie-in to product discounts.

Groupon’s Advertising Obscenity

In my 53 years on earth, I have never witnessed a more tasteless, vulgar and morally repulsive example of exploitative marketing than this Groupon ad that ran on the Super Bowl tonight. Can you imagine using the suffering of a repressed and brutalized nation to market online coupons? It’s mind-boggling. What’s next, Groupon? Perhaps an ad for discounted cigars made by the survivors of the Haitian earthquake?

Groupon should buy network TV time to apologize for this obscenity. How on earth did the management at the company allow this to happen? If you are as offended by this ad as I am, I encourage you to tweet your opinion to Andrew Mason, founder and CEO of Groupon.

Update: David Kaplan covers the outrage on Twitter in a good post on The ad “was in such poor taste, it makes the outrage directed toward Cole’s insensitive, tone-deaf tweet equating sales and the Cairo uprising against Egyptian President Hosni Mubarak seem mild,” he writes.

Andrew Mason Founder/CEO, GrouponUpdate: In a posting on the Groupon blog, founder Andrew Mason explains that the ad is partly satirical. “What if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as ‘Save the Whales’), but then it’s revealed to actually be a passionate call to action to help yourself (as in ‘Save the Money’)?”

Actually, we think it’s a terrible idea. If the ad is intended to raise money for Tibet, it would have been nice to offer diners the option of sending their savings directly to Tibetan relief. But the ad neglects that detail.

Groupon is saving face by matching donations up to $100,000 to The Tibet Fund. Take them up on that.