Groupon barely paused to reject Google’s $6 billion offer before continuing on its way towards becoming an online local advertising juggernaut. It introduced self-serve Groupon Stores last week and is striking distribution partnerships left and right (with Yahoo, eBay, Ning, and newspaper sites). Groupon’s latest distribution deal, we’ve learned, is with WiFi and mobile ad network JiWire, and is part of a strategy known internally as “Groupon Everywhere.”
With JiWire, Groupon will be able to offer deals at the hyper-local level—not just by city, but by neighborhood. JiWire runs a mobile ad network which runs predominantly on public WiFi networks. Through partnerships with more than 40 public WiFi networks and 60 airports, its ads reach more than 30 million people a month, and JiWire knows if they are sitting in a cafe or in a terminal so it can tailor offers based on their location. Using Groupon's API, JiWire can sift through the deals near any given device on its ad network and serve up targeted offers based on the user's location and time of day. The JiWire Groupon deals will also also work with mobile apps that provide a location back to JiWire. (JiWire recently acquired mobile shopping platform NearbyNow).
As I noted a few days ago, Groupon’s daily deals are really a new form of performance-based local advertising and it is trying to cement its lead in this nascent market by expanding its inventory of such deals as fast as possible. It started along this path in the summer by introducing personalized deals, which allowed it to carry more than one deal per day in any given city. (In San Francisco, for instance, Groupon is currently running 8 deals). The self-serve stores should also expand the number of deals in its inventory, as will these various distribution partnerships.
All of this is just another way to distribute Groupon’s existing and expanding inventory. Expect more distribution deals in the future. These deals cut into Groupon’s healthy 50% margins since it now has to split its portion of the coupon dollars with its new partners, but its deals are seen by more people. The self-serve Groupon Stores will also cut into margins, with Groupon only getting 10% of those deals.
Groupon needs to stay ten steps ahead of its competitors and “Groupon Everywhere” is how it hopes to do that. Where will Groupon go next? Mobile app check-ins seems like an obvious place. Geo-targeted offers are already part of Foursquare and others geo-location apps. If you check in somewhere and that store or one nearby is offering a Groupon, that could be a good time to display a Groupon offer. Competitor BuyWithMe is already testing a similar concept with SVNGR. While no check-in deals are imminent, Groupon is looking into it.