Birds Of A Feather Or Not? Groupon And LivingSocial

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eMarketer Digital Intelligence highlighted some interesting information today about the demographics of visitors to two of the biggest deal-of-the-day sites online — Groupon and Living Social — looking at a couple of recently released studies by comScore (“State of the US Online Retail Economy in Q1 2011″) and Nielsen (April 26, 2011 company blog post).  As far as demographics were concerned, Groupon was reported to be more popular among the under-45-year-old crowd, while LivingSocial was more favored among those older than 45 — at least according to comScore. The Nielsen figures, on the other hand, tended to tell a different story. Here, in the 21-34 age group, 25% were Groupon visitors and 33% were LivingSocial visitors, while in the 35-64 age group, 57% were Groupon and 51% LivingSocial. They also suggested that LivingSocial visitors were younger, more educated, and had higher incomes than Groupon visitors.

What items did this different studies agree upon in this complex relationship? A significant one is gender. Women are more commonly users of the daily deal sites than men according to both the reports.

I wanted to use this report to make two points about using statistical studies of Internet behavior as a base for future business decisions. The first thing to keep in mind when assessing this type of research is to consider the environment. Daily deal sites are constantly shifting in user base, as new people sign on hoping for bargains and others sign off, after deciding the typical deals offered aren’t necessarily going to apply to their interests often enough to justify a daily intrusion into their email. Also, LivingSocial is a newer site than Groupon, having been on the radar of bargain-seeking Internet users for a shorter timeframe, with less branding and less exposure in other media, such as TV. As it matures, the sifting of users may settle into patterns that are more reflective of the type of deals offered — if the two continue to differ in the character of deals most often offered (restaurants for Groupon vs. books for LivingSocial, for an example), this could result in some very intriguing fallout of demographics of users.

But one also needs to be wary of statistical relevance placed on some of the studies that are carried out on Internet use. Some providers, like comScore and Nielsen, have huge resources and take much care to adhere to the commonly accepted principles of statistical research, but others may not have as wide access to available data. As much fun as it can be to look at figures and speculate what they reflect of reality, one must keep in mind that not all studies are carried out in such a way as to be statistically relevant. If you want to base business decisions on the results of any survey results, you need to inquire a bit about the methodology, the sample size, and the confidence level. If a study’s methodology and base number of respondents doesn’t meet the generally accepted standards for statistical relevance, then it would be foolhardy to place too much relevance on the findings. They may indeed be interesting and informative, but can’t be relied upon to predict behavior. Look into as many reports as possible before jumping to any conclusions and investing any resources in changes and with social media, in particular, remember that change is quick and is inevitable.

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