Groupon cuts marketing spend in shift to retention

Groupon cut marketing spend by 22% in the final quarter of 2011 as its shifts towards a retention, rather than acquisition based model.

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The voucher company reported an unexpected loss in its first end of year results since going public last year. It raked in revenues of $506.5m (£319.7m) in the three months to 31 December compared to $172.2m (£108.7) in the same period in the previous year, but made an operating loss of $42.3m (£26.7m).

Marketing spend was $156.5m (£98.8m) in the period, down from $200.9m (£126.2m a year earlier, as the business looks to shore up future custom and increase the number of repeat customers using its services regularly.

The company says the loss comes from one off investments as part of the company establishing an international office in Switzerland.
Groupon also claims to have increased active customers by 275% year on year to 33 million.

CEO Andrew Mason says: “We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world.”

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