Groupon spends big on controversial (tasteless!?) Super Bowl spots
Groupon rival LivingSocial played it safe with its pre-game ad, spotlighting all the deals available on its site.
By Laurie Segall, staff reporter
NEW YORK (CNNMoney) -- It's a battle of the daily deal sites -- and this time it played out on the big screen. Right after Groupon secured a Super Bowl ad, rival site LivingSocial snapped up a pre-game spot.
We've seen Internet companies play in this field before, 10 years ago -- and it didn't end well. Before the dot-com bubble popped, a rash of startups spent millions from their piles of venture-capital cash for pricey spots during the year's most-watched television event.
Some live on in legend: Who could forget Pets.com's sock-puppet sensation? The pet supplies retailer dropped $1.2 million on the ad that made its "spokes-sock" famous, which cracked the top 5 on USA Today's Ad Meter ranking of the most popular commercials. Less than two weeks later, Pets.com went public.
It didn't last a year. Like 2000's other big dot-com ad spenders -- Epidemic.com, Lifeminders.com, OurBeginning.com -- Pets.com lived fast and died young. The sole survior from the year's tech advertisers is E-Trade (ETFC), a financial services company whose talking babies have become a Super Bowl mainstay.
So as the tech scene starts looking bubbly again, are Groupon and LivingSocial foolishly burning cash?
Steve McKee, president of ad firm McKee Wallwork Cleveland, doesn't think so. He sees one very key difference between Groupon and the dot-com players from a decade ago: a business plan.
"Pets.com did great, but they had a bad business model," he said. "Their problem was the business model, not the Super Bowl ad."
But startups like Groupon face a unique branding challenge in crafting a message for a mass audience of millions.
"The dot-com startups were acting like well-established brands, and that you can't do," McKee said. "When you're introducing a new concept to the marketplace, you have to focus more on positioning, rather than personality."
Courting controversy: Groupon may have blown its big moment. Its Super Bowl ads drew a fast and furious online reaction for an irreverence that verged on tastelessness.
The company's spots enlisted celebrity spokespeople for touts related to their philanthropic causes. In the most prominent ad, actor Timothy Hutton's message about Tibet quickly veered from charitable to consumerist.
"The people of Tibet are in trouble. Their very culture is in jeopardy," he began. "But they still whip up an amazing fish curry!"
A Cuba Gooding Jr. spot started off with a "save the whales" pitch that segued into a tout for a cut-price whale-watching cruise. And an Elizabeth Hurley segment linked Brazilian deforestation to other kinds of, um, Brazilian "deforestation." (Think waxing.)
"Did #Groupon just make light of the political struggle in Tibet?," Twitter user GlenGilmore wrote in a widely shared reaction. "Who wrote the ad, Kenneth Cole?"
"Groupon seems to have achieved the unique feat of paying $3M to lose customers who previously loved them," advertising blogger Rohit Bhargava, a marketing professor at Georgetown University, tweeted about the ads.
Groupon's ad struck a raw chord for Heath Rudduck, chief creative officer for Campbell Mithun.
"It surprises me that they would go anywhere near anything as sensitive as Tibet," he said.
Of course, controversy sometimes pays off. Domain name registrar GoDaddy's polarizing ads have differentiated it in a crowded space.
"GoDaddy is an example of a company that broke out of a commodity category," Ari Jacoby, president of ad agency Solve Media. "The GoDaddy ads have always featured very attractive, seductive actresses whom the audience can't seem to get enough of."
-CNNMoney staff writer Aaron Smith contributed to this report.
Credit: CNN (www.cnn.com)
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