Another great comparison of LivingSocial vs Groupon promotion strategies and core demographic profiles. Merchants in Houston, Texas can learn a great deal from comscore’s report.
Targets, advertising strategies vary
Daily deal sites Groupon and LivingSocial saw their audiences approximately triple in the year to April 2011, with gains of 250% and 182%, respectively, according to comScore’s “State of the US Online Retail Economy in Q1 2011” report. But while both play in the same space, differences have emerged in the geographies and demographics of their users, as well as their deployment of display and paid search advertising.
The comScore analysis found that LivingSocial had an edge among East Coast-based users, while Groupon had more of a foothold among Midwest and West Coast-based consumers. This may not be all that surprising as LivingSocial is headquartered in Washington, D.C., and Groupon is based in Chicago.
Beyond the geographic divergence, each provider appears to attract different types of users. comScore found that internet users under 45 leaned toward Groupon, while those ages 45 and older skewed more in favor of LivingSocial. Those ages 12 to 25 underindexed on usage of daily deal sites in general, but underindexed less strongly on Groupon. Both sites were used by women more than men.
But Nielsen found the opposite age skew when it examined the sites’ demographics in March 2011. That analysis found that 33% of LivingSocial visitors were ages 21 to 34, compared to 25% for Groupon, while 51% of LivingSocial visitors were ages 35 to 64, vs. 57% for Groupon.
However, Nielsen also found that visitors to both sites were similar in that nearly two-thirds were female and that their visitors were more likely to be affluent and better educated than the average internet user. In contrast to comScore’s May analysis, LivingSocial’s visitors trended younger, slightly more affluent and more highly educated than Groupon’s. In addition, Nielsen found visitors to LivingSocial 49% more likely than the average American online to earn $150,000 or more, while Groupon’s visitors were 30% more likely.
Rewinding to February 2011, Morpace found that the plurality of Groupon users, 40.2% , were 18 to 34 and that less than a quarter were 55 or older.
The dynamic nature of users opting in and opting out of Groupon and LivingSocial’s emails may, in part, be responsible for driving changing user demographics from month to month. This is a plausible scenario given consumers’ fickle spending behaviors and the services’ monthly churn rates.
In April, Groupon’s churn rate was 18% while LivingSocial’s was 22%, according to comScore. As of Q1, Groupon had about 83 million subscribers compared to LivingSocial’s 26 million.
The larger site has an edge with consumers in terms of awareness, according to research from Bloomberg and YouGov.
Where advertising is concerned, while neither Groupon nor LivingSocial skimps on spending to attract users, they place a different emphasis on how they promote their deals.
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