Social Local Media: Groupon’s Hyperlocal Play — A Next Step for Deals?

In December, we discussed the implications of Groupon’s pact with public Wi-Fi network provider JiWire as a potentially significant next step for social commerce — hyperlocal group buying that leverages geotargeting to serve nearby deals to connected customers. The partnership has now gone live across JiWire’s footprint of more than 30,000 locales (cafes, coffee shops, airport lounges) in areas where Groupon is present.

David Staas, JiWire senior VP of marketing, gave BIA/Kelsey a sneak peek into Groupon’s hyperlocal design, and the implications for potential customers who can now access a collection of deals within a certain distance of a given location.

Ad formatting will roll into the JiWire Compass template, which initially appears as a standard display ad, but when clicked on, opens up into a richer, app-like experience with geofencing and mapping capabilities.

JiWire’s network automatically determines a user’s location and then searches for locally relevant deals. Results show how many local deals were found and their distance from that location. The deals are listed as tiles (or “snapshots”) in a left-hand column, and are adjacently mapped across the rest of the ad. Clicking on a tile brings up full information on the deal in the format that Groupon subscribers are accustomed to (savings, number of deals available, time remaining to buy). 

The partnership is still developing, with Stass acknowledging that experimenting and learning are key objectives. Right now, JiWire is only aggregating and optimizing existing Groupon deals, but this could evolve to include deals sold specifically for its network. Furthermore, it is still trying to answer “what is the proximity sensitivity?” In other words, how far is a customer willing to travel within a city for a really good deal?

This is a question that daily deal companies are asking as they probe new ways to effectively target and drive additional inventory. Staas believes that “location can be a targeting attribute.” Groupon’s chief competitor, LivingSocial, has introduced sub-metro deals in cities such as New York and Washington, D.C., where simply getting a deal in that metro may not be enough. Now Groupon is moving location targeting to a more micro, and mobile, level.

Location targeting and verticalization are already emerging as principle differentiators in the noisy group buying space. Both will see continued development in 2011.