In the few weeks gone by, collective buying web site Groupon has been under the radar in the United States. And to quantify that, the press has not been very nice either: PaidContent described Groupon as “a magnet for lawsuits” while Los Angeles Times argued with a report of legal papers claiming accusations that the company was infusing “bait and switch” advertising on Google. This comes following the company being sued for “false and misleading business and advertising acts” by San Francisco Comprehensive Tours.
This revived interest in scrutinising Groupon can be attributed to scantily welcomed television ads that were broadcasted during the Superbowl. Furthermore, the company is now in dire straits as they get ready to lose their President whilst also trying to ward of accusations with regards to their revenue dropping down by 30 per cent in February alone; an allegation that has been going around in abundance after the same was published on a prominent technological blog, TechCrunch.
This in some way has had a domino effect that has seemed to rub off in the UK as people are now initiating complaints here too, reasons that suggest spurious endorsing and advertising ethos. A live example was Will Wayne, managing director, Arena Flowers, who not so long ago filed a complaint directly with the Advertising Standards Authority (ASA) asserting that there existed at least two of the offers endorsed by Groupon were fictitious.
“Around Valentine’s Day, I noticed an ad for flowers which actually directed me to a deal on depilation treatment,” Wynne claims. “In fact, there have never been any flower deals on Groupon in the UK.”
The wait is now for ASA’s impending decision but say if ASA were to lean in Wynne’s favour, Groupon may be restricted from airing their ads belonging to the same format in the future. Moreover, ASA may also warn Groupon by suggesting “not to advertise sales promotions if they could not demonstrate they were genuine”.
It was noted though that Groupon was unavailable to respond to this newspaper’s request for comment with regards to its complaints. Nonetheless, it did get in touch with ASA and argued that the banner ads “were created and controlled by the German branch of Groupon” and that the UK office “had not had any involvement in the creation of online banner ad campaigns” up till the point that these cases were brought to their knowledge.
Observant customers of Groupon have although been notified with the introduction of asterisks next to the Groupon’s offers that have hit the market in the last few weeks with words like “Example of upcoming offer” affixed at the bottom of the ad.
There are now a large chunk of blogs that have spawned out of the necessity of speaking about the incidents that have taken place in the last couple of week with Groupon customers alleging accusations on the collective buying website.
Conversely, there are some industry analysts who believe that the escalating public relation desolations are not even Groupon’s biggest worry. Although they have had a fruitful yield of monetary gains which is ascending, Groupon’s model is nevertheless pivotally minor to replicate for the clone businesses which could prove to be a threat to the giant as consumers would be familiarised with the group procuring expression and would in due course, search for more advantageous deals from local providers who have kept away from the negative publicity surrounding Groupon at the moment.
These competitors of Groupon, especially the ones that cater to specific niches and their related collaterals, also having the privilege of being amalgamated with renowned brands, would be vying on the chance to pounce on the advantages they could seek out now with Groupon’s public image drowned in pessimism.
To sum up though, it is just a figment of my imagination that Groupon founders are lying awake in bed at night and disquieting about a tad bit of finger pointing from the British advertising standards body and what with the staggering numbers that Groupon is yet achieving; if in all probability they do fail, it would be an epic fail surely. Time for Groupon to lay its thoughts on reinventing its stratagem so as to not jeopardise any more loses in terms of its customer base which is yet, ever expanding. I would like to think so.