Online+Advertising+Critique

=Online Advertising Critique - Due February 7th, 2012=

1. AppSumo (http://www.appsumo.com)


AppSumo, founded by “Head Sumo” Noah Kagan, targets online entrepreneurs. The business model of this company mirrors other time-restrictive, group-buying websites such as Groupon and Team Buy, but does not focus on location-based deals. Instead, AppSumo focuses on their target niche of entrepreneurial web developers, internet-junkies, and geeks.

Since AppSumo sells online product/services, their marketing model is based strongly on word of mouth (from bloggers) and social media (Facebook/Twitter) "sharing with a friend." Also, AppSumo offers “Free Deals” through contests to capture outside attention and drive customers to their website. I first heard about AppSumo when I saw this on my friend’s Facebook wall.



Using this example, AppSumo managed to gain 4 more contestants, just through offering the CHANCE to win a free MacBook. After clicking on the link, I was prompted to answer a skill-testing question (Who is giving away a free MacBook Pro? AppSumo of course!) and input my e-mail address. Of course, if I wanted to win the free MacBook, I would not question the request because IF I won it, how else would they get back to me? However, this serves as a dual purpose because in less than 15 seconds, AppSumo managed to add me to their subscription list.

I noticed that after I signed up for this contest, I began to receive weekly e-mails from AppSumo promoting their deals. I did not sign up for this feature, but I didn’t unsubscribe right away from the mailing-list because I was afraid that it would kill my chances of winning the MacBook.

The next step to win the "MacBook Air" is not forced, but you almost feel obligated to follow because you want to increase your chances of wining the prize, AppSumo encourages you to “share” this contest with a friend, because if your friend wins, you win too. Also, each time your friend enters using your "lucky url," you get an extra entry into the contest. AppSumo makes it convenient to share your "lucky url" via other social networks such as Twitter and LinkedIn.



Here's another example of their Facebook advertising links.



After doing a bit of research, I found out that AppSumo gained 500,000 customers in 18 months. Jeff Sexton of [|BoostCTR] analyzed the effectiveness of Facebook co-branding and how AppSumo used the “cool factor” from other online products to gain attention from their customers (the MacBook got my attention). This co-branding technique allows AppSumo to gain attention from a pre-existing fan-base and offer these individuals great deals while profiting on each sale.



Regular Facebook advertising isn't enough for AppSumo. Using our human-intuitiveness of pressing buttons, AppSumo also created another way to increase the number of Facebook "Likes" for their featured deals and links.



This alternative method to generating Facebook "Likes," or Twitter "re-tweets" demonstrates that AppSumo relies heavily on social media for advertising. They understand that generating attention from potential customers through social media platforms allows them to gain access to even deeper networks of "techys" and "geeks." Also, tech websites and blogs such as CNET have paired up with AppSumo to create charitable deals. (@http://news.cnet.com/8301-13845_3-20077003-58/get-a-big-indie-game-bundle-for-$33-help-charity/)



Even smaller blogs such as “The Billionaire Girl” feature the products from AppSumo and couple their reviews with banners at the side.



Overall, I think that AppSumo is doing a good job with their marketing strategy of targeting their advertisements to the online web-developer community. Through offering giveaways, they are constantly attracting new people to their website. Each person who signs up and spreads the word of their participation gives AppSumo the chance to tap further into other networks. Not all people will unsubscribe from a mailing list the moment they start realizing they are being spammed, either because they enjoy viewing the daily deals or they don't know how. Also, AppSumo does a good job of attracting attention from people by co-branding and teaming up with companies that already have a steady client base.

An improvement for AppSumo would be to make their online banners more consistent in design. Although AppSumo pushes it's brand (and voice) of a tech-savvy sumo wrestler, it's hard to recognize the banners by colour and layout design. Only physical components of their website have the similar "look and feel."

Sources:
@http://thebillionairegirl.com/review-of-case-study-how-appsumo-grew-to-500000-customers-in-only-18-months @http://buzzfarmers.com/marketing-genius/marketing-genius-app-sumo-facebook-like-button/ @http://www.boostctr.com/blog/ads-in-the-wild/co-branded-facebook-ads/ @http://news.cnet.com/8301-13845_3-20077003-58/get-a-big-indie-game-bundle-for-$33-help-charity/ []

2. Groupon (@http://www.groupon.com)


In 2008, Andrew Mason launched Groupon, the first online, daily group-discount company. Over the past few years, they've grown from just offering deals in the USA to over 45 countries (565 cities) around the world. Since then, other similar web-bargain companies such as LivingSocial, TeamBuy, and AppSumo, have copied their business model and increased sales for small and local businesses, while saving the public a ton of money. This collective-buying, "coupon" effort shows potential buyers how much they've saved (usually at least a 50% discount off original price), how many deals have been sold, and how much time left you have until the deal is gone forever.

Unlike AppSumo, Groupon does not have a specific target audience or product market. Instead, Groupon uses location-based information to target deals for people, bringing attention and business to small, local businesses that are looking to gain more customers. Matching the location of the deal to the location of the buyer helps the advertisement feel less "pushy" and more friendly. Almost like how a travel guide would recommend you good places to eat, Groupon understands the importance of catering deals based on location. I first saw a Groupon advertisement when I posted a Facebook album with the location of "Kitchener, Waterloo." (I couldn't find it, so here's a different example.)



From a banner design aspect, Groupon follows a pretty consistent set of formatting/colour rules in order to keep all their deals linked to the "Groupon" brand. Since products can range from yoga lessons to restaurant discounts to car-detailing packages, Groupon tries to keep everything consistent to ensure that the buyer recognizes that the deal is safe and reliable. From a UK website, I found a sample of the different types of banners used according to the product/service being sold.

Also, Groupon puts lots of money into e-mail and Facebook target advertising.





Within the first 9 months of 2011, Groupon reportedly spent $613million on online marketing in order to bring in new customers and subscribers to the website. Using targeted online ads such as sponsored searches and social media networks, Groupon continues to add fuel to location-based sales by narrowing down gender and age demographics. However, Groupon has encountered some problems with "raising the bar" for certain Google search terms into a rate that doesn't seem as profitable anymore. In 2005, a San Francisco Tour company purchased the top Google Adwords spot for the search terms "San Francisco Tours," "Alcatraz tours," and "Napa Wine tours." Later, in 2010 the cost for these phrases surged and Groupon started taking over the top of the search page, even though they weren't offering specific discounts for the area. Google eventually removed their ads because they were irrelevant.

Overall, I feel that Groupon has done an okay job at advertising, but hasn't done anything extra special to keep up with the newly formed competitors. All of these group-discount websites seem to operate on almost the exact some business model and marketing strategy. The new Google Offers application seems to have the "twist" that Groupon is missing, by integrating the deal directly with their Google Maps application.



The only feature Google Offers is missing is an option to "make money" by sharing the offer with your friends. However, I'm pretty certain that this feature will emerge soon.

Sources:
[] @http://adage.com/article/digital/groupon-marketing-spending-works/230777/ @http://affiliates.groupon.co.uk/targeted-banners/ @http://www.reuters.com/article/2011/10/10/dailydeal-localads-idUSN1E7961JA20111010 @http://techcrunch.com/2011/01/25/sneak-peak-google-offers/