September 18, 2013, 1:13 PM

LivingSocial shifts from daily deals toward online marketing

The move mirrors Groupon’s own repositioning.

Zak Stambor

Managing Editor

Lead Photo

Daily-deal operator LivingSocial is shifting away from offering time-sensitive promotions, while, at the same time, introducing tools and services merchants can use to monitor and analyze consumers’ responses to campaigns both on and off LivingSocial.

“We have moved from simply being a daily deal company to a real marketing partner for merchants by adding effective and custom solutions to improve their bottom line,” says Tim O’Shaughnessy, LivingSocial CEO.

LivingSocial has increased the prominence of the search box on its site and app, which is increasingly important because it says that over the past three months it has quadrupled the number of deals it offers. While LivingSocial will continue to send e-mails to subscribers’ inboxes, it wants consumers to use the search box to find deals—some of which will not have a time limit.

That mirrors a similar shift by Groupon Inc. to lessen its reliance on e-mail marketing. Groupon says that in the second quarter, direct clicks from e-mails accounted for less than 40% of North American transactions; no previous comparative data was available.

That repositioning dovetails with a Google Inc. redesign of its Gmail inbox that organizes consumers’ e-mails into tabs, including a “promotions” tab that groups together marketers’ e-mails. Some marketers have said the redesign has slowed consumers’ responses to their time-sensitive e-mails.

LivingSocial has also recently developed a social media manager tool that serves as hub where marketers can monitor their social media campaigns. It has also launched tools to help merchants better monitor their LivingSocial promotions and respond to consumer feedback related to those deals.

The efforts come after the company generated $264 million in revenue in the first half of 2013, up 6.5% from $248 million in the same period a year earlier, according to Amazon.com Inc.’s second quarter filing with the U.S. Securities and Exchange Commission. LivingSocial recorded an $81 million loss in the first half of 2013, Amazon says, compared with a $65 million profit in the first half of 2012. Amazon owns a 31% stake in LivingSocial.

In related news, Groupon today announced it has bought SideTour, a New York-based startup that develops and sells hosted events such as a cocktail-making class led by a well-known bartender. Neither company disclosed the deal’s terms.

“The addition of SideTour’s curated local experiences furthers our vision of Groupon as the go-to place for consumers to find just about anything, anywhere, anytime,” says Greg Rudin, general manager of Groupon’s GrouponLive live events division.

Groupon says that SideTour events, on average, have 12 attendees. SideTour currently operates in Chicago, New York, Philadelphia and Washington, DC, with plans to add several more markets in the next few months.

A Groupon spokesman says Groupon will continue to operate SideTour as a separate entity “for some time.”

 

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