Groupon "optimizes" marketing costs

It seems that Groupon is not doing as well as this company would like. Representatives of the “discount” service speak less and less about IPOs, and the date of their release on the stock exchange is postponed with enviable consistency. Experts have repeatedly criticized the company for spending too fast the funds received from investors. Most of the money received goes to marketing, which is put on Groupon in a big way.

In the first two quarters of 2011 alone, the company spent about $ 345 million on marketing. This is about 100 million more than last year’s costs (the first half of 2010 - $ 241.5 million). Despite the costs, the effectiveness of service promotion is not as great as the management would like. Now, according to company representatives, marketing costs will be reduced, and management is now looking for new methods to promote discounts to the masses.
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Experts note that sales of the company's services in the first quarter increased by about 63%, and in the second quarter - by 36%. At the same time, the loss of Groupon (meaning a net loss) in the first quarter of 2011 amounted to 102.7 million dollars. This is almost three times higher than the first quarter of last year, when net loss amounted to 36.8 million dollars.

Now on Groupon employs about 4,800 thousand people (in the sense that it employs so much the company's staff). When the service starts to make a profit - no one can say for sure, neither the company's management, nor the experts. Some even doubt the success of the chosen strategy of the company, with almost uncontrolled expenditure of funds for staff expansion and marketing costs. Apparently, the leadership has already doubted this strategy, now announcing a reduction in marketing costs.

Via forbes